Boeing CEO David Calhoun has presided over a series of missteps that would have caused almost any chief executive to lose his job. Yet, he remains at the helm of the commercial aircraft and defense equipment manufacturer. Calhoun has held the job since 2020.
In the past two years, Boeing’s shares are down 3%. Over the same period, the S&P 500 is up 41%. The stock plunged much more than that in December 2020. Its workhorse Boeing 737 Max was grounded from March 2019 to December 2020 because of two deadly crashes. Calhoun was appointed in January 2020, primary to solve Boeing’s lax manufacturing process. However, he has been criticized because he has been on the board, which apparently missed some of Boeing’s most troubling issues, since 2009.
Boeing has had other problems during Calhoun’s time in his job. The 737 Max was grounded again. Production problems with the 787 Dreamliner began to drag on commercial sales.
Calhoun cannot be blamed for the extreme trouble Boeing encountered during the COVID-19-driven drop in air travel.
Calhoun does get the blame for sales gains by rival Airbus. As The Wall Street Journal reported in July of last year: “A year and a half into his tenure, new snags keep popping up.” Among the additional damage to Boeing has been its inability to compete with Elon Musk’s SpaceX, which has become by far the dominant means to send people and satellites into space.
More recently, Boeing posted a huge loss for the first quarter of this year that totaled $2.7 billion. The company also announced delays in the production of its 777X. In part, this was due to certification problems. Calhoun commented to analysts “We’ve got to give ourselves the time and freedom to get this right.” He might have mentioned management played a role in the problem.
Boeing has decided to move its headquarters to near the District of Columbia, presumably to be closer to the parts of the government that control the purchase of its products. The move has little value some critics say. One, Domhnal Slattery, the CEO of Avolon, expressed what much of the industry believes: “I think it’s fair to say that Boeing has lost its way. Boeing has a storied history…They build great airplanes. But it’s said that culture eats strategy for breakfast and that is what has happened at Boeing.” He hinted senior management was the primary problem.
Calhoun said earlier this year “I will be the first to admit that they were not events caused by the outside world, but unfortunately, missteps inside.” That should be enough for the board to force his exit.
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