Boeing (NYSE:BA) stock is in focus on news that CEO Dave Calhoun, Board Chairman Larry Kellner and Commercial Airplanes CEO Stan Deal will all leave the company. These departures come in the wake of Boeing’s latest quality-control scandal.
BA stock is up about 1% as of this writing. Shares are trading for around $190 apiece on March 25, representing a market capitalization of $116 billion.
Deal retired from his position effective immediately. Meanwhile, Kellner will not run for re-election as Board Chairman and Calhoun will stay on as CEO until the end of 2024.
BA Stock: MAX Problems
Calhoun himself became CEO in 2020 after 737-MAX crashes caused the board (which he was part of) to fire predecessor Dennis Muilenburg.
However, the problems at Boeing have continued, with the aircraft maker accused of prioritizing speedy deliveries over safety. BA stock is down more than 20% so far in 2024 and 42% since Calhoun’s appointment.
The latest worries began in January when a door plug blew out of an Alaska Air (NYSE:ALK) 737-MAX. Experts determined later that necessary cap screws were never installed.
That’s not all, though. Earlier this month, a Boeing 787 flying between Australia and New Zealand plunged mid-flight due to an instrument failure. The incident injured 50 people.
The apparent suicide of Boeing whistleblower John Barnett may have been the last straw. Lawyers for Barnett accused Boeing of a long-running campaign of harassment against their client. Barnett first came public in 2017, but charges against the company were dismissed in late 2020.
Looking forward, more changes may be coming to Boeing. Corporate governance expert Nell Minow recently told Fortune that Boeing has had a “bad board” for some time. A duopoly with Airbus (OTCMKTS:EADSY) has allowed the company to put financial considerations ahead of safety.
What Happens Next?
Boeing should be profitable, as it has a huge backlog of orders that Airbus can’t fill. But replacing Calhoun won’t be easy. One name being floated around is General Electric (NYSE:GE) CEO Larry Culp, who is due to head GE Aerospace — a key Boeing supplier — after GE is broken up.
On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
