Boeing's board strips CEO of chairman role

Posted October 12, 2019 9:16 a.m. EDT

— Boeing CEO Dennis Muilenburg has been stripped of his role as chairman as the company struggles to get its grounded 737 Max jets cleared to fly again.

The company's board of directors on Friday said the move was an effort to strengthen "safety management," and Muilenburg will continue as CEO, president and a director. The board elected current independent lead director David L. Calhoun to serve as non-executive chairman, the company said in a statement.

"The board said splitting the chairman and CEO roles will enable Muilenburg to focus full time on running the company as it works to return the 737 MAX safely to service, ensure full support to Boeing's customers around the world, and implement changes to sharpen Boeing's focus on product and services safety," the statement said.

Muilenburg said he was "fully supportive of the board's action."

Boeing and Muilenburg have been under intense pressure since the worldwide grounding of its workhorse 737 Max in March following two fatal crashes that killed a total of 346 people. Airlines around the world were forced to cancel or reschedule routes that relied on the plane, and Boeing has to to halt new deliveries of the aircraft.

Over the past seven months, the company has endured a rocky recertification process with the Federal Aviation Administration and safety regulators around the world. It is still unclear when the plane will be cleared to fly again.

The board's move to split the CEO and chairman roles came the same day as a new report from the Joint Authorities Technical Review faulted both the FAA and Boeing for failures in the overall certification of the 737 Max.

Boeing has taken a huge financial hit from its troubles with the Max. In the most recent quarter, the company reported its largest loss ever — a $3.7 billion adjusted loss — as a result of the grounding.

Earlier this week, pilots for Southwest Airlines sued Boeing for $115 million in lost compensation they say was caused by the 737 Max grounding. The complaint alleges Boeing decided to "rush" the 737 MAX to market for the sake of profits and in doing so, "abandoned sound design and engineering practices."

Boeing called the lawsuit "meritless."

Muilenburg last month said Boeing still hopes to get approval for the plane to fly early in the fourth quarter, which began Oct. 1. But he cautioned that aviation authorities around the world may not immediately follow the FAA's lead whenever the US agency decides to allow the Boeing 737 Max to fly again.

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