Aerospace giant Boeing announced Monday, Dec. 23, that chief executive Dennis Muilenburg is resigning and being replaced by board chairman David Calhoun. Boeing has been upended this year by a massive crisis over crashes of its 737 Max airplane.
"The Board of Directors decided that a change in leadership was necessary to restore confidence in the Company moving forward as it works to repair relationships with regulators, customers, and all other stakeholders," the company said in a statement. "Under the Company's new leadership, Boeing will operate with a renewed commitment to full transparency, including effective and proactive communication with the FAA, other global regulators and its customers."
Muilenburg's resignation was effective immediately. The company's chief financial officer, Greg Smith, will serve as interim chief executive during the transition period. Calhoun will assume his role as CEO and president beginning Jan. 13.
Shares of Boeing jumped more than 3% after the opening bell.
Boeing is still trying to regain its footing after the crashes of two passenger jets that killed 346 people and prompted a global grounding of the 737 Max aircraft. On Friday, a Boeing spacecraft designed to fly NASA astronauts to space did not achieve the correct orbit after a flawless rocket launch when the capsule's engines did not fire as expected. The latest misstep forced the cancellation of the spacecraft's planned mission to the International Space Station.
In a note to Boeing employees Monday morning, Smith thanked Muilenburg for his nearly 35 years at Boeing and wrote that he "gave his all to the company under extraordinarily difficult circumstances."
"This has obviously been a difficult time for our company, and our people have pulled together in extraordinary ways," Smith wrote. "Over the next few weeks as we transition to new leadership, I am committed to ensuring above all that we meet the needs of our stakeholders - especially our regulators, customers and employees - with transparency and humility."
The Federal Aviation Administration issued a statement saying Boeing informed the agency of Muilenburg's departure Monday morning and reiterated that it is following no set schedule for when the Max will be cleared to fly again.
"The FAA continues to follow a thorough process for returning the Boeing 737 MAX to passenger service," the agency' statement said. "We continue to work with other international aviation safety regulators to review the proposed changes to the aircraft. Our first priority is safety, and we have set no timeframe for when the work will be completed."
"We expect that Boeing will support that process by focusing on the quality and timeliness of data submittals for FAA review, as well as being transparent in its relationship with the FAA as safety regulator."
Boeing's Starliner launched successfully early Friday morning on an Atlas V rocket, operated by the United Launch Alliance, from Cape Canaveral on Florida's Space Coast.
But when the spacecraft was released, a problem with the its timing system caused the engines not to fire as expected. That put the spacecraft in the wrong orbit where it was between communications satellites. Because it was in the wrong location, its antennas were pointed in the wrong direction so they could not receive commands controllers on the ground sent to correct the error, according to Jim Chilton, Boeing's senior vice president of space and launch.
As the spacecraft struggled to put itself on the correct flight path, it fired a series of thrusters that burned up fuel, and NASA and Boeing decided that the spacecraft should not attempt to dock with the station.
Despite his attempts to take responsibility for some of the darkest chapters of Boeing's history, Muilenburg was unable to regain trust from the public and regulators as the 737 Max's problems multiplied and the fix that had originally been planned for April remained elusive. In October, he was stripped of his role as chairman of Boeing's board, in a move that the board argued would allow Muilenburg to focus solely on bringing the Max back online.
Muilenburg's appeals to Congress, regulators and the public alike have done little to put the 737 Max back in commission or reassure investors that Boeing can restore its reputation as an American icon. Families of the crash victims have argued that the company only cares about its bottom line.
In a statement, Michael Stumo, whose 24-year-old daughter Samya Rose Stumo, was killed in one of the 737 Max crashes, said that Muilenburg's resignation "is a good first step toward restoring Boeing to a company that focuses on safety and innovation. Now that it's known what he and top Boeing officials knew, yet ignored, prior to the crashes, it has become clear how the company eroded in quality over the years."
Robert Clifford, an attorney representing the families suing the company, said Boeing's board "does not deserve a 'pat on the back' for this decision. In fact, their leadership decisions empowered Muilenburg and the company to create a culture where profits were put ahead of the safety of the global traveling public."
Boeing has also struggled with the financial toll wrought by the downfall of its once-famed commercial jetliner. A week ago, Boeing announced it would temporarily suspend 737 Max production beginning in January. The announcement prompted both Southwest Airlines and United to announce they would pull the 737 Max from their flight schedules going into 2020.
This article was written by Rachel Siegel, a reporter for The Washington Post. The Washington Post's Ian Duncan and Christian Davenport contributed to this report.