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Boeing CEO Vows to “Fix What Isn’t Working,” Will Step Down from Role by Year End
"The eyes of the world are on us," Boeing CEO Dave Calhoun said when he announced his departure plans.
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Boeing (NYSE: BA) CEO Dave Calhoun announced his plans to step down from his position by the end of the year, marking a significant leadership change for the aerospace giant. Boeing’s stock gained in premarket trading, up 4.12% at the time of writing.
Boeing CEO to Step Down by End of 2024
In announcing his departure, Calhoun emphasized the global scrutiny on the company, stating, “The eyes of the world are on us. We are going to fix what isn’t working, and we are going to get our company back on the track towards recovery and stability.”
The company also revealed that Larry Kellner, Boeing’s chairman, will not seek re-election as a board director, and former Qualcomm (NASDAQ: QCOM) CEO Steve Mollenkopf has been elected to succeed him. Additionally, Stan Deal, CEO of Boeing Commercial Airplanes, is retiring, with Stephanie Pope, Boeing’s COO since January, set to replace him effective immediately.
The leadership shakeup comes amidst a tumultuous period for Boeing, which has faced over five years of issues with its airplanes.
The company has been grappling with the fallout from two fatal crashes of the 737 Max in 2018 and 2019, resulting in the loss of 346 lives. More recently, an Alaska Airlines 737 Max experienced an incident where a door plug blew out during flight.
These problems have led to multiple groundings, safety concerns, and staggering financial losses, with Boeing incurring over $31 billion in cumulative losses.
In a letter addressing the Alaska Airlines (NYSE: ALK) incident, CEO Calhoun described it as “a watershed moment for Boeing” and reiterated the company’s commitment to resolving issues and restoring stability, echoing the sentiments expressed in his departure announcement.
Boeing Stock Up in Premarket After Leadership Change Announcement
On March 22, Boeing’s stock closed at $188.85, up $1.15 (+0.61%) from the previous close of $187.70. In pre-market trading on March 23, as of the time of writing, the stock price increased to $197, up $7.79 (+4.12%).
During the March 22 trading session, Boeing’s stock price fluctuated between $188.19 and $192.94, while the 52-week range spans from $176.25 to $267.54. The trading volume on March 22 was 7,826,970 shares, lower than the average of 10,128,668 shares.
Boeing’s current market capitalization is $115.224 billion, and the stock has a 1-year target estimate of $232.93, suggesting a potential upside from current levels.
Do you think the leadership change is good for Boeing’s stock? Let us know in the comments below.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
