Washington: Boeing Chief Executive Dennis Muilenburg has resigned, the company's board said on Monday, as the planemakerbattles scandal following two fatal crashes of its flagship 737 MAX model. The company's stock rallied on the news, moving up some 2.75 per cent in morning trading.
Boeing has been in crisis after two crashes of its 737 MAX in Indonesia and Ethiopia killed 346 people and led authorities around the world to ground the model in March. In a statement, the board said it decided "a change in leadership was necessary to restore confidence in the company moving forward as it works to repair relationships with regulators, customers, and all other stakeholders."
The aeroplane maker said David Calhoun will be the new chief executive and president as of January 13. Lawrence Kellner, currently a board member, will become non-executive chairman of the board effective immediately. There were additional shifts within the company. Trading of Boeing shares on US markets was suspended pending the news of the shake-ups and began an upward trend once normal exchange operations resumed.
This month, Boeing said it was temporarily suspending production of the 737 MAX. The US Federal Aviation Administration (FAA) had already announced that the recertification process for the jets would extend into next year, suggesting there was still a long way to go for production to resume.
The FAA would not comment on the personnel changes at Boeing but said it expects the company to be transparent on all technical issues going ahead. "The FAA continues to follow a thorough process for returning the Boeing 737 MAX to passenger service," said the FAA, which has also faced criticism over its handling of the 737 MAX crisis. "Our first priority is safety, and we have set no timeframe for when the work will be completed," the FAA said.
Muilenburg has been the face of Boeing throughout the crisis, and spent two days on Capitol Hill in October, testifying before law makers. He was confronted by family members of crash victims at the US Congress. Muilenburg, an engineer by training, had spent decades at the company, having starting work there as an intern in the 1980s. He was removed as chairman back in October.
Boeing’s chief engineer John Hamilton also announced his retirement his month. Questions linger over the extent to which the accidents were preventable and a federal criminal probe is ongoing. At the centre of the scrutiny is an auto-pilot function, in particular a feature in the aircraft known as the maneuvering characteristics augmentation system (MCAS).
Boeing suffered another blow this month when its Star liner ship failed to dock with the International Space Station, due to a problem with its autonomous flight system. The unmanned ship landed in NewMexico over the weekend. Boeing, which has been consumed by the two crashes, had not stopped producing the troubled 737 MAX aircraft in the past months, leading to the company having some 400 models in storage.
It will stop production next month. United Airlines recently bought 50 planes from Boeing’s main European rival, Airbus. Boeing is one of the largest exporters in the United States. The 737MAX, produced near Seattle, Washington, is the manufacturer's most important aircraft. --dpa
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