Boeing Company (NYSE: BA) shares rose by 3.2% on Monday morning after the Company announced it has fired Chief Executive Officer Dennis Muilenburg amid continues to struggle and face backlash from its 737 Max aircraft.
The Company announced that its Board of Directors has decided to name Chairman David Calhoun as the Chief Executive Officer and President, effective on January 13, 2020. Calhoun will remain as a member of the Board. Additionally, Board member Lawrence Kellner will become non-executive Chairman of the Board, effective immediately.
Boeing announced that Muilenburg will resign from his positions as Chief Executive Officer and Board director, effectively immediately. Moreover, Chief Financial Officer Greg Smith will serve as interim Chief Executive Officer during the short transitional period.
The Board of Directors believed that changes in Boeing’s management was necessary to restore confidence in the Company moving forward as it works towards repairing relationships with regulators, customers, and all other stakeholders.
“On behalf of the entire Board of Directors, I am pleased that Dave has agreed to lead Boeing at this critical juncture,” Mr. Kellner said. He added, “Dave has deep industry experience and a proven track record of strong leadership, and he recognizes the challenges we must confront. The Board and I look forward to working with him and the rest of the Boeing team to ensure that today marks a new way forward for our company.”
Boeing has been under fire since the two fatal crashes involving its 737 Max aircraft, which killed 346 people in Indonesia and Ethiopia.
The crashes eventually led many countries to ground the plane, citing concerns over the aircrafts liability and integrity of the jet. Last month, Boeing remained hopeful that the 737 would return to production and commercial service this year, however, the Company ultimately decided to delay production until next year.
Mr. Calhoun said, “I strongly believe in the future of Boeing and the 737 MAX. I am honored to lead this great company and the 150,000 dedicated employees who are working hard to create the future of aviation.”