Boeing Ousts CEO but General Counsel Installed in May Stays Put
The resignation of CEO Dennis Muilenburg marks the latest leadership shake-up at the troubled aircraft maker, which has reported $2 billion in losses from a crisis over its 737 Max jets.
December 23, 2019 at 03:16 PM
4 minute read
The continuing crisis over Boeing's 737 Max jets, which have been grounded in the wake of two crashes that killed a total of 346 people, led to the ouster of the Chicago-based aerospace firm's CEO on Monday. But the company's new general counsel is staying put, at least for now.
The resignation of CEO Dennis Muilenburg marks the latest leadership shake-up at the troubled aircraft maker, which reassigned its longtime top lawyer earlier this year. The firm reported $2 billion in losses in the third quarter of 2019 connected to issues with the 737 Max, not counting legal costs and settlements. The Wall Street Journal reported that the company estimates the MAX crisis will cost it $10 billion, but said analysts expect that figure to at least double.
In May, Boeing announced that general counsel J. Michael Luttig was stepping aside after 13 years as firm's top lawyer to serve in a new role. Brett Gerry was elevated from his role as the Tokyo-based president of Boeing Japan to serve as Luttig's successor.
At the time, Muilenburg described Gerry as a "proven and talented leader, with the right mix of legal, business and government experience we need to help us succeed."
Gerry continues to serve as Boeing's top lawyer, a spokesman for the company confirmed Monday. Gerry was unavailable for an interview.
After leaving the GC post, Luttig took on a newly created role as counsel and senior adviser to the CEO and the Boeing board of directors. He also continued to oversee legal matters related to the Oct. 29, 2018, Lion Air Flight 610 and the March 10 Ethiopian Airlines 302 crashes involving 737 Max jets. Boeing did not immediately respond to a request for comment regarding whether Luttig would remain in his latest roles following Muilenburg's departure.
Muilenburg's resignation as CEO and board director is effective immediately, according to a statement from Boeing. Boeing chief financial officer Greg Smith will serve as interim CEO while the board's chair, David Calhoun, transitions into the role.
"I strongly believe in the future of Boeing and the 737 Max," Calhoun said in a statement. "I am honored to lead this great company and the 150,000 dedicated employees who are working hard to create the future of aviation."
Calhoun is slated to take over as CEO and president Jan. 13. He will remain on the board of directors, which "decided that 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," Boeing stated in a news release.
"Under the company's new leadership, Boeing will operate with a renewed commitment to full transparency, including effective and proactive communication with the FAA, other global regulators and its customers," the firm added.
Lawrence Kellner, who has stepped up to serve as non-executive chairman of the board after Muilenburg's departure, noted that Calhoun "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," he added.
The executive changes also came within hours after Boeing's first test flight Dec. 20 of an unmanned space capsule failed to reach the correct orbit, and was unable to dock with the international space station. The botched mission dealt a setback to a program intended to provide routine transportation for National Aeronautics and Space Administration crews to and from the space station.
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