Boeing officially booted its CEO Dennis Muilenburg on Monday following a series of massive setbacks that resulted in billions of dollars in losses for the company. Muilenburg faced some tough challenges after the two fatal crashes of the Boeing's 737 Max jets, which led to a global grounding that placed the aircraft manufacturing giant in a very precarious situation.
According to a press release by the company's board of directors, it was decided that Muilenburg would be replaced by Chairman David Calhoun, effective January 13, 2020. The decision was apparently made in part due to the loss of trust in Muilneburg's decision-making by both the company's customers and global aviation regulators.
Boeing stated that a change in leadership was a necessary move to restore confidence in the company as it continues to work to repair its stained reputation and its relationship with its customers, stakeholders, and regulators.
The two fatal crashes of the company's 737 Max jets, which killed 346 people, resulted in a global grounding of the planes in March 2019. Since that time, global regulators scrutinized the company's operations. Boeing attempted to provide a software fix to address the issue that caused the two planes to crash. However, up to this day, regulators have still yet to give the green light for the planes to return to service.
Boeing continued production of its best-selling commercial jet throughout the global grounding. It then decided in January to suspend production of the troubled model as it was no longer untenable to continue producing the planes. Throughout the year, Boeing was forced to shift its timeline for the expected return to service for its 737 Max jets. This had frustrated Boeing's stakeholders and its customers, which consequently resulted in a massive drop in the company's stock prices and its quarterly revenues.
Lawmakers also started to lose confidence in the company in light of new testimony from former workers who had testified before Congress just a few weeks ago. Boeing was accused of ignoring safety concerns that ultimately led to the fatal crashes. One of the whistleblowers mentioned to Congress that Boeing had cut corners to save costs, resulting in serious production lapses.
Boeing's board of directors likely felt that Muilenberg was partly to blame for having allowed the unsafe and misguided culture to proliferate within the company. Analysts have stated that the last straw was likely how Muilneberg had handled the announcement of the company's decision to halt the production of its 737 Max jets.
