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Will Dennis Muilenberg’s Exit Fix Boeing’s Troubles?


Dec. 26 2019, Published 9:04 a.m. ET

Nobody really thought that Dennis Muilenberg would keep his job as Boeing’s (BA) CEO for long. He was asked to resign during Congressional testimony. Also, the company halted 737 MAX 8 production. The path to Muilenberg’s exit started when he lost his board chairmanship. David Calhoun, who took over as the company’s board chairman, will replace Muilenberg as the new CEO effective on January 13. A few days ago, President Trump spoke with Boeing before the company announced the 737 MAX 8 production halt. During the call, President Trump asked if Muilenberg was okay.

Yesterday, Boeing stock rose 2.91% on the news. However, some of the excitement has been waning. The stock fell 1.3% at 12:00 PM ET.

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Why Muilenberg wants to forget 2019

Overall, 2019 might have been the worst year in Muilenberg’s 34-year career at Boeing. He joined Boeing in 1985 after earning his MS in Aeronautics and Astronautics from the University of Washington. Over the years, he handled various key responsibilities at the company. Towards the end of 2018, Lion Air Flight 302 crashed in Indonesia, which raised questions about the 737 MAX 8. In March, Ethiopian Airlines Flight 610 crashed, which led to the worldwide grounding of the 737 MAX 8. With no fix in sight, things only got worse for Muilenberg. The release of a transcript between two test pilots added to the misery. The company’s relationship with the FAA, which traditionally offloaded some of the oversight duties to the company, also went downhill. Last week, the stock got successive downgrades from Moody’s and S&P. Also, the Starliner didn’t reach the international space station as intended.

Will Boeing improve in 2020?

Muilenberg’s exit might not entirely solve Boeing’s troubles. First, the company needs to address trust issues with the FAA, airlines, pilot bodies, and passengers, which won’t be an easy task. Airlines have canceled thousands of flights due to the grounding of the 737 MAX 8. With no clear timeline of a return in sight, airlines are losing patience with the company. The situation might impact Boeing’s other products. Southwest Airlines Pilot Association sued Boeing for loss of income and breach of trust. Passengers are wary about boarding 737 MAX 8 aircraft again.

Boeing also needs to address troubles with 737 NG airliners and get the 777X flying soon. The company’s new management will have to focus on getting the 737 MAX 8 back without ignoring other programs. Overall, Boeing might recover in 2020 or Airbus will have another reason to celebrate.


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