Boeing CEO Dave Calhoun to step down at end of year amid plane-maker's woes

Boeing CEO Dave Calhoun will step down from theembattled plane-maker at the end of the year as part ofa broader management shuffle, capping a tumultuous five-plus years that haveshaken faith in one of the U.S.'s most-storied manufacturers.

In a letter to employees announcing his departure, Calhoun wrote that the company is focusedon returning Boeing "to stability after the extraordinary challenges of the past five years, with safety and quality at the forefront of everything that we do."

Stan Deal, president and CEO of Boeing'scommercial airplanes unit, will retire from the companyimmediately withStephanie Pope, the company's chief operating officer, now leadingthe division.Board chair Larry Kellner has also told the company he doesn't plan to stand for re-electionin May.

Boeing has come under intense pressure since early January, when a panel blew off a brand-new Alaska Airlines 737 Max.Investigators say bolts that help keep the panel in place were missing after repair work at the Boeing factory.

The Federal Aviation Administration has stepped up its scrutiny of the company, including putting a limit on production of 737s, its marquee aircraft. The agencyrecently ordered an audit of assembly lines at a Boeing factory near Seattle, where the company builds planes such asthe Alaska Airlines 737 Max.

Fallout from the Jan. 5 blowout has raisedscrutiny of Boeing to its highest levelsince a pair of737 Max jets crashed, killing hundreds of people in Indonesia and Ethiopia in2018 and 2019, respectively.

Investors unsure shakeup will fixsafety issues

Some investors expressed concern that the management shake-up would not be enough to address long-standing safety issues that were the reason for Calhoun's ascendance to CEO in the first place in 2020.

"We've long thought that the issues at Boeing have been seated in cultural challenges," said Cameron Dawson, chief investment officer at Newedge Wealth.

Meanwhile, other analysts viewed theshakeup as a positive for shareholders in anticipation of a new CEO from outside the company's existing management.

LISTEN | How Boeing's reputation as crown jewel of the aviation industrycrumbled:

Front Burner23:39What went wrong with Boeings planes?

Boeing Airlines' "culture of quality and manufacturing has been called into question over recent issues, and a
new, outside perspective on operationscould be encouraging for investors," wrote Stephen Strackhouse ofRBC Capital Markets.

When reached for comment, a spokesperson for Boeing directed CBC News to Calhoun's letter and a company news release.

Boeing under intense pressure

The management shuffle was inevitable given the harm done to Boeing's reputation as a jewel in the crown of the U.S. and its economy, said Ian Lee, an associate professorat Carleton University's Sprott School of Business.

"The CEO's job of any company is to create value, not destroy value. And in allowing these problems to fester and get worse, they were destroying value," Lee told CBC News.

"The share price of Boeing is down very dramatically. Customers are unbelievably angry. And that's why the situation was completely unsustainable and it was inevitable."

WATCH | Is Boeing any safer 5 years after the 737 Max crashes?:

5 years after 737 Max crashes, is Boeing any safer?

7 months ago

Duration 13:46

Five years after a pair of deadly crashes involving Boeing 737 Max-8s and the mass grounding of the jets, the door blew off a Boeing jet mid-flight. CBCs Susan Ormiston breaks down the aviation giants struggle to salvage its reputation after the Max-8 crashes and ongoing questions about the safety of some of its jets.

Boeing has beenunder intense pressure from the CEOs of various airlines, who have been outspoken in their frustration with Boeing's manufacturing problems, which have slowed deliveries of planes that the carriers were counting on.

The company's main rival, Airbus, clinched orders for 65 jets from two of Boeing's key Asian customers recently, in what some saw as a sign of executives' concerns about Boeing.

Southwest Airlines recently said it was re-evaluating its financial expectations for this year because of related delays in the delivery of planes.

"When you have the buyersthe biggest and most important buyers, including Southwestgoing to the board and saying, you have a problem, and you're not solving it, and you've got to fix it right now, then, Houston, we have a problem," Lee said.

Discussions to bring former supplier back in-house

Calhoun acknowledged that Alaska Airlines Flight 1282 was a "watershed" moment for Boeing.

"We must continue to respond to this accident with humility and complete transparency. We also must inculcate a total commitment to safety and quality at every level of our company," he said.

The company'smost significant effort to improve quality has been the opening of discussions about bringing Spirit AeroSystems, which builds fuselages for the Max and parts for that and other Boeing planes, back into the company.

Mistakes made at Spirit, which Boeing spun off nearly 20 years ago, have compounded the company's problems. Bringing thiskey supplierback in-house would, in theory, give Boeing more control over the quality of manufacturing key airplane components.

Calhoun indicated that the decision to leave the company was his.

The board has elected Steve Mollenkopf to succeed Kellner as independent board chair. In this role, Mollenkopf will lead the board's process of choosing Boeing's next CEO.