Monday January 13, Boeing should know the eleventh CEO in its history started in 1916. David Calhoun, current chairman of the board of directors, must settle in the chair of his predecessor, Dennis Muilenburg, sacked abruptly on December 23, 2019. A high-risk succession for this 62-year-old financier, who spent twenty-six years at General Electric (GE), then attended the audience measurement institute Nielsen and the investment fund Blackstone. He joined the Boeing board of directors in 2009.
A choice that questions, as the stakes for Boeing are first industrial, before being financial. Indeed, Mr. Calhoun inherits a company struck by an industrial disaster, after the two air accidents which caused the death of 346 passengers and crew members. Two crashes which led to the immobilization of the medium-haul 737 MAX, since March 2019, the best-selling Boeing ordered more than 5,100 copies, which represents about 80% of the order book of the American group.
The Seattle, Washington automaker has been shutdown for eleven months. However, a year ago, everything seemed to smile at him: 2018 had been the year of all successes. For the first time in its history, Boeing sales had crossed the $ 100 billion ($ 90 billion) threshold to $ 101.12 billion. At the same time, the aircraft manufacturer reported record earnings of $ 10.4 billion, with 806 aircraft delivered.
Restart the 737 MAX
Finally, icing on the cake, the profitability of the commercial aviation industry, the major indicator of Boeing bosses, synonymous with hearty dividends, had jumped, from 9.4% to 13% in one year. With such profits, the American aircraft manufacturer had great ambitions. Its 2019 revenue expectations peaked at $ 110 billion. And its production forecasts followed the same upward curve, with an increase in the monthly rates of the MAX, from 52 to 57 aircraft. It only took three months to turn the dream into a nightmare. Nailed to the ground in March 2019, the MAX piled up in hundreds in the parking lots around the Boeing assembly plants. To stem the bottleneck, the aircraft manufacturer had to stop production since 1st January.
To get Boeing out of the doldrums, Mr. Calhoun may be able to draw his inspiration from his book, co-written with Rick Kash in 2010, aptly titled: How Businesses Earn (HarperCollins). He will need it because the challenges are many for the new boss. The first and most awaited will be to relaunch the 737 MAX. It’s far from won. The update of the MCAS software, involved in the two accidents, has still not been validated by the United States Federal Aviation Agency (FAA) and the European Aviation Safety Agency (EASA).
