Boeing has sacked Chief Executive Dennis Muilenburg after its reputation was damaged following two fatal air crashes that paused production of its best-selling aircraft, Reuters reported.
Boeing dropped Muilenburg after it was clear that he was making no effort to resolve a crisis that has cost it $9 billion, reuters reported. It hurt the economy so much so that it now threatens to cut the rate of U.S. economic growth.
The world’s largest plane maker will have its new CEO—Chairman David Calhoun. Prior, he has been General Electric executive and has been on Boeing board since 2009.
Ousting Muilenburg from power, a Boeing statement said, “The board of directors decided that a change in leadership was necessary to restore confidence.”
The 737 MAX has been halted since March this year after two crashes in Indonesia and Ethiopia killed 346 people within less than six month.
Boeing, which competes with Europe’s Airbus for leadership of the $150 billion jet industry faced a major setback.
The question is whether Mr Muilenburg will accept a severance $39 million. Neither did Boeing confirm the severance amount or on whether Muilenburg would accept it.
Peter DeFazio, chair of the U.S. House of Representatives’ transportation committee supported Muilenberg’s dismissal.
“Under his watch, a long-admired company made a number of devastating decisions that suggest profit took priority over safety,” reported Reuters quoting him. “It’s clear Dennis Muilenburg’s ouster was long overdue,” he said.
Muilenburg, an engineer was an intern at Boeing in 1985. He acknowledged errors in preventing crashes.
“We’ve made mistakes and we got some things wrong. We’re improving and we’re learning,” he told lawmakers in October.
“He should have been gone a long time ago. He is part of the problem,” Paul Argenti, a professor at Dartmouth’s Tuck School of Business told Reuters.
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