Air Freight News

Boeing’s new chairman is reaching out directly to US airline CEOs to rebuild trust

Boeing Co.’s new chairman has scrapped formal meetings planned with leaders of the planemaker’s largest US airline customers as he begins to address a crisis of confidence that culminated in a sweeping management shakeup, according to people familiar with the matter.

Chairman Steve Mollenkopf instead is reaching out directly to the chief executive officers of American Airlines Group Inc., Southwest Airlines Co., United Airlines Holdings Inc., and Alaska Airlines, one of the people said.

The effort shows how Mollenkopf, a former Qualcomm Inc. CEO and Boeing director since 2020, is attempting to smooth over strained relations with the customers who set in motion one of the biggest executive overhauls in Boeing’s century-long history. The departures of the planemaker’s CEO, chairman and commercial chief announced last week have left the beleaguered manufacturer’s leadership in flux as it faces another crisis centered on its cash-cow 737 Max jetliner.

Boeing, American and United declined to comment. Representatives for Southwest and Alaska did not immediately respond to a request for comment.

The company has slowed aircraft deliveries to a crawl amid scrutiny from regulators and a criminal investigation after a manufacturing lapse led to a near-catastrophic accident in January. 

Leaders of the four carriers sought to air their rising frustrations with the handling of the crisis directly with Boeing directors — without now-departing CEO Dave Calhoun or other senior executives present, said the people, who asked not to be identified discussing confidential matters. 

That seeming loss of confidence in Calhoun, who has been closely aligned with departing Chairman Larry Kellner, along with public pressure from the heads of the Federal Aviation Administration and National Transportation Safety Board contributed to the executive shakeup. Calhoun plans to leave the planemaker by the end of the year. He is also stepping off the board of Caterpillar Inc.

Kellner, who was replaced by Mollenkopf, had planned to meet with the airline CEOs along with a small, rotating group of directors, the people said. Kellner remains on the board for now but will not stand for election at the company’s next annual shareholder meeting.

New Chairman

Mollenkopf was among the first directors recruited to Boeing’s board as part of a makeover initiated by Calhoun after he took the top job in 2020. As Boeing’s newly installed chairman, he’s heading the search for Calhoun’s replacement.

He started off as an engineer at Qualcomm in the 1990s and worked his way up to the top job at the chipmaker. He played a crucial role in a key technology choice that helped catapult the San Diego-based company to the top ranks of technology providers as mobile phone networks switched to digital. 

He succeeded Paul Jacobs, son of the company’s founder, in 2014 — following reports of his candidacy for role of Microsoft Corp. CEO — and ran Qualcomm through a turbulent period in its history before retiring in 2021. 

Under his tenure Qualcomm faced legal challenges that threatened its business model from some of the world’s largest companies and governments, including from major customer Apple Inc., a hostile takeover bid by rival Broadcom Inc. and activist shareholder maneuvers against its leadership.

Airline Fallout

Delayed deliveries have disrupted airline operating plans, with Southwest reducing expansion, halting most hiring and reviewing spending as a result. The carrier said last month it expects a net loss this quarter and is re-evaluating prior guidance for the full year as it receives just 46 Boeing aircraft, down from an earlier plan for 79.

United has asked pilots to take unpaid time off or work less next month, saying late-arriving aircraft have reduced the number of flight hours it had planned for May. 

The program could be extended into the summer and potentially the fall, the union for United pilots said. The carrier earlier pulled the 737 Max 10 from its 2024 fleet plan because of uncertainty about when it will be certified. It was to have received 80 of the aircraft, part of a 277-plane order.

Boeing hasn’t yet published a proxy detailing changes to its corporate governance, or released the date for its annual general meeting, which is traditionally held at the end of April or in early May.

Bloomberg
Bloomberg

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© Bloomberg
The author’s opinion are not necessarily the opinions of the American Journal of Transportation (AJOT).

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