Benzinga - by Piero Cingari, Benzinga Staff Writer.
Editor’s note: This story has been updated with additional details.
Boeing Co. (NYSE:BA) CEO Dave Calhoun is set to resign by the end of 2024, marking a major leadership transition for the aerospace titan, the company said Monday.
This announcement is part of a comprehensive management overhaul as the company seeks to navigate through the the 737 Max crisis.
Calhoun, reflecting on his tenure, stated, “It has been the greatest privilege of my life to serve Boeing.” He emphasized the company’s commitment to surmounting its recent challenges, focusing on restoring stability, safety, and quality. “The eyes of the world are on us, and I know that we will come through this moment a better company,” Calhoun assured.
Alongside Calhoun’s planned departure, Boeing will see the resignation of its board chairman, Larry Kellner, who will officially leave his role at Boeing’s annual meeting in May. Kellner, who has been with the Boeing Board for 13 years, remarked that, “Serving this company, and our people, has been a true honor.”
Kellner’s successor as chair will be Steve Mollenkopf, a seasoned Boeing director since 2020 and former CEO at Qualcomm Inc. (NASDAQ:QCOM), bringing a fresh perspective to the board’s leadership amid the company’s ongoing challenges.
“I am honored and humbled to step into this new role,” he said, expressing his confidence in Boeing’s direction and commitment to upholding the highest standards of safety and quality.
Boeing also announced the immediate departure of Stan Deal, the president and CEO of Boeing Commercial Airplanes. Stephanie Pope, recently appointed as Boeing’s chief operating officer and a former head of Boeing Global Services, is set to take over Deal’s responsibilities.
This sweeping management shakeup comes as Boeing faces intensified scrutiny from airlines and regulatory bodies demanding substantial changes following several quality and manufacturing issues with Boeing planes.
The spotlight on these concerns grew sharper following an incident on Jan. 5, when a door plug was dislodged from a Boeing 737 Max 9 aircraft shortly after takeoff.
Shares of Boeing rose following the news, with gains reaching over 2% during the premarket trading on Monday.
Goldman Sachs Lowers Boeing Stock Expectations
Goldman Sachs analyst Noah Poponak slightly adjusted Boeing’s 12-month price forecast, reducing it from $268 to $257, citing anticipated low airplane deliveries, while maintaining a Buy rating on the stock.
The company has adopted a strategy of “quality stand-downs,” choosing to temporarily halt production and deliveries, the analyst said. This pause is intended to allow the firm to address and rectify lingering product quality issues and manage the backlog of work that needs to be completed, he said.
However, “low deliveries, with little change to fixed cost given the ramp-up is still coming, along with taking inventory from the supply chain, will mean free cash burn early in the year,” Poponak said.
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