Boeing CEO loses chairman title as company separates roles after 737 Max crisis
PUBLISHED FRI, OCT 11 20196:25 PM EDTUPDATED FRI, OCT 11 20199:58 PM EDT
Boeing Chief Executive Dennis Muilenburg speaks during a press conference after the annual shareholders meeting at the Field Museum on April 29, 2019 in Chicago, Illinois. Boeing announced earnings fell 21 percent in the first quarter after multiple crashes of the company’s bestselling plane the 737 Max. (Photo by Jim Young-Pool/Getty Images) Jim Young | Getty Images News | Getty Images
Boeing’s board removed CEO Dennis Muilenburg as chairman so he can focus on running the company after the 737 Max crisis, the company said Friday.
Boeing is facing numerous investigations and criticism over its 737 Max planes after two fatal crashes within five months of one another killed of 346 people.
The manufacturer is scrambling to get regulators to allow its 737 Max planes to fly again. They have been grounded worldwide since mid-March, after the second of the two crashes, an Ethiopian Airlines flight with 157 people on board. A Lion Air 737 Max went down in Indonesia shortly after takeoff on Oct. 29, 2018, killing all 189 people on the flight.
Boeing said the separation of the two roles will allow Muilenburg to focus on getting the Max back to service and that lead director David Calhoun will serve as non-executive chairman.
“The board has full confidence in Dennis as CEO and believes this division of labor will enable maximum focus on running the business with the board playing an active oversight role,” Calhoun said in the statement.
Muilenburg said he fully supports the board’s decision.
“Our entire team is laser-focused on returning the 737 MAX safely to service and delivering on the full breadth of our company’s commitments,” he said in the statement.
The Federal Aviation Administration is also under fire for its role in certifying the planes, facing criticism that its relationship with Boeing was too cozy and that it handed over too much of the certification process to the manufacturer.
Crash investigators implicated a piece of flight-control software that misfired, pushing the nose downward repeatedly in both air disasters. Pilots said they didn’t know about the system until after the first crash.
A panel of international air safety regulators and safety experts said in an FAA-commissioned report released Friday that the agency didn’t adequately review that flight control system, known as MCAS, when it certified the 737 Max in 2017. And late last month, the National Transportation Safety Board said in a separate report that Boeing overestimated how well pilots could respond to a flurry of alerts in an emergency and recommended it put greater emphasis on human factors when designing its planes.
Muilenburg is scheduled to testify before a House transportation panel on Oct. 30, his first appearance before Congress since the crashes.
Boeing has developed a software fix for the planes but hasn’t handed it over to regulators yet. Officials have said they have no set timeline for the planes’ approval.
The grounding has dented airline profits after they were forced to cancel thousands of flights since March. This week, American Airlines and United Airlines removed the planes from their schedules until January, joining Southwest, Boeing’s top 737 Max customer in the U.S.
Boeing took a $4.9 billion after-tax charge in the second quarter to set aside funds that would compensate airlines for the plane’s grounding, which is now approaching its eighth month.