Boeing Ousts CEO Muilenburg, Chairman Calhoun to Take Over Max Crisis

Dennis Muilenburg was ousted as chief executive officer of Boeing Co., a once-unthinkable turning point for a U.S. industrial champion now engulfed in turmoil after two deadly crashes of its top-selling 737 Max jetliner.

David Calhoun, a General Electric Co. veteran who had served as chairman since October, will replace Muilenburg as CEO and president Jan. 13, Boeing said in a statement Monday. The move followed a rare public rebuke earlier this month by the U.S. Federal Aviation Administration. Just last week, Boeing said it would temporarily halt output of the Max, which has been grounded since March.

Boeing’s directors voted unanimously to install Calhoun, 62, as CEO during an emergency session Sunday, said a person close to the board. Chief Financial Officer Greg Smith will serve as interim CEO during the brief transition period, the company said. Director Larry Kellner, who once led Continental Airlines, will replace Calhoun as chairman.

Boeing is trying to regain its footing amid the Max grounding, one of the worst crises of the modern jet era. The planemaker’s reputation and finances have been battered after the Max disasters killed 346 people and prompted the worldwide grounding. Boeing’s design decisions and cozy relationship with the FAA are being scrutinized by Congress while the Justice Department is conducting a criminal probe.

“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’s board said.

Boeing climbed 2.8% to $337.12 at 2:45 p.m. in New York after advancing as much as 3.8% for the biggest intraday gain in six weeks.

Boeing beat the broad market under Muilenburg despite the latest weak stretch.

Calhoun, a senior executive at Blackstone Group Inc., now faces the daunting task of extricating Boeing from one of the bleakest chapters in its 103-year history.

Boeing is turning to a GE veteran to run the company for the third time in less than two decades, as the U.S. planemaker faces scrutiny for its unrelenting focus on shareholder value. The two CEOs who preceded Muilenburg -- Jim McNerney and Harry Stonecipher -- also rose through the ranks at GE while Jack Welch was chief executive.

Calhoun had been in the running to head Boeing almost 15 years ago, when directors instead selected McNerney. Calhoun ran GE’s aircraft engines division from 2000 through 2004 and ascended to the vice chairman role before leaving the company in 2006.

Affable and diplomatic, he’s also very connected. Calhoun serves on the Caterpillar Inc. board with Muilenburg and oversees Blackstone’s private equity portfolio.

He will serve as a “stabilizer” as Boeing works itself out of the Max crisis, said Richard Aboulafia, aerospace analyst with Teal Group.

“There’s no doubt with Congress and regulators this is a lot better, and in the short run that matters a lot,” Aboulafia said.

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