Boeing’s stock gains after announcement of CEO change

Boeing’s (NYSE: BA) shares were up 2.6% in midday trade after the company announced changes to its management team. Boeing stated that its CEO Dennis Muilenburg resigned from his position effective immediately.

David Calhoun, the current Chairman, has been named President and CEO effective January 13, 2020. Lawrence Kellner will become Chairman of the Board effective immediately. CFO Greg Smith will serve as interim CEO during the transition period.

Boeing stated 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 move comes as the company continues to struggle with the grounding of its 737 Max aircraft following two fatal crashes last year. The grounding of the 737 Max has affected the revenue and growth of several airline customers.

Last week, Boeing announced that it would suspend its 737 Max production in January due to the extension of the certification into 2020 as well as uncertainty related to the return to service. Throughout the 737 Max grounding, the company has continued to build new airplanes and there are now approx. 400 airplanes in storage. Boeing decided to prioritize the delivery of stored aircraft and temporarily suspend the 737 production.

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