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Boeing selects new CEO to 'restore confidence'

December 23, 2019

Boeing replaced its chief executive in a bid to restore its reputation after two deadly crashes of its 737 MAX. Dennis Muilenburg quit on Monday, after the board "decided that a change in leadership was necessary."

 Dennis Muilenburg
Image: picture alliance/AP Images/J. Young

Boeing's chief executive Dennis Muilenburg stepped down on Monday, making way for the company's chairman David Calhoun to take his place, saying the company needed to "repair relationships with regulators, customers and all other stakeholders" amid the protracted 737 MAX crisis.

Boeing's decision comes after a year of of intense scrutiny and setbacks after two fatal crashes of its best-selling 737 MAX jetliner within five months, which remains grounded as a result.

"The Board of Directors decided that a change in leadership was necessary to restore confidence in the Company moving forward as it works to repair relationships with regulators, customers, and all other stakeholders," the company said.

David Calhoun and Dennis Muilenburg
David Calhoun will replace Dennis Muilenburg, as effective of January 13Image: AFP/T.Yamanaka/O. Douliery

Read moreBoeing's woes unlikely to open gap in market for rivals

Suspension of jetliner

Boeing announced earlier in December that it temporarily shut down 737 MAX production because of the crisis and said it would suspend production from January 2020. The company is the world's largest plane maker in terms of turnover, typically just edging out its European rival Airbus in annual unit sales of commercial jets.

The twin crashes proved to be the biggest setback in Muilenburg's 34-year-long career at Boeing, where he began as an in intern in 1985 and became CEO in 2015. Muilenburg was stripped of his chairman title in October.

Calhoun will take over effective January 13, Boeing said.

Boeing's shares have declined more than 20% since March.

Read moreAs Boeing halts 737 MAX production, can the planemaker recover from the blow?

Faults in design

Hundreds of aircraft were grounded earlier in 2019 after fatal accidents in Indonesia and Ethiopia killed 346 people during 2018 and 2019 as a result of a series of failures.

The US' Federal Aviation Administration made it clear earlier in December that the 737 MAX's clearance to fly over US airspace would not be reinstated until at least 2020. Many other aviation bodies follow the FAA's lead on planes' safety.

Investigators found faults with the plane's design in both of the crashes and grounded the entire 737 Max fleet. Investigations were carried out to determine how an automated system on the planes contributed to the crashes. Evidence from the two crashes indicated that a system designed to help the plane avoid stalls may have malfunctioned, unintentionally pushing planes into a dive that the pilot cannot override.

Boeing has lost $9 billion (€8.1 billion) through repayments and loss in sales since the grounding.

So far Boeing has said it won't fire employees who make the 737 MAX, but that smaller companies in the supply chain may be forced to lay off workers.

mvb/msh (AFP, dpa, Reuters)

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