Boeing sticks with Calhoun as potential successor exits

Bloomberg

Boeing Co is sticking with Chief Executive Officer Dave Calhoun to guide the company through a long and uncertain recovery, while parting ways with a potential contender for his job.
The company’s board raised Calhoun’s retirement age to 70, citing the 64-year-old’s “substantial progress” in ending the 737 Max grounding and bringing the planemaker back from the Covid-19 pandemic. In another surprise, Boeing said that Chief Financial Officer Greg Smith will exit on July 9 after guiding the company’s operations through years of turmoil.
The shake-up tightens Calhoun’s grip and eliminates potential distractions over succession as he carries out a multiyear rebuilding effort. The departing CFO had been overseeing the company’s day-to-day turnaround efforts and was a familiar face on Wall Street. Last year, Smith spearheaded a $25 billion bond financing — the biggest in Boeing’s history — to keep the company afloat amid the unprecedented travel collapse caused by the pandemic.
The decision “gives an outline of the leadership path for Boeing in the 2020s, though there is still much to learn about strategy and personnel,” Seth Seifman, an analyst with JPMorgan Chase & Co, said in a note to clients.
Boeing fell 4.1% to $234.06 at the close in New York, the biggest decline on the Dow Jones Industrial Average. That shaved almost $6 billion off the company’s market value amid a rout in airlines and other travel-related stocks stoked by rising concern over the industry’s recovery prospects. While Boeing has rebounded from the worst of last year’s slump, the outlook for further share gains is muddled. Investors want insight from Calhoun into how Boeing plans to shed its $64 billion debt load, return to profitability and prevent Airbus SE from converting its market lead into longer-term dominance.
Speaking at Boeing’s annual meeting, the CEO vowed to return the planemaker to its engineering roots. He also outlined initiatives to shake up the company’s culture and streamline its business as it restructures after burning through $20 billion in cash last year. “We want future generations of Boeing’s stakeholders to conclude that at this moment in our history, we listened, we adapted, we stayed focused, we remained tireless in our pursuit of continuous improvement,” Calhoun said.
The decision to keep Calhoun on board for longer means he will preside over Boeing’s next new airplane program as it seeks to counter Airbus’s hot-selling A321 jet, Seifman said.
Calhoun, a former General Electric Co vice chairman, had served on Boeing’s board for a decade before taking the top job last year after Dennis Muilenburg was ousted for botching the company’s response to the
737 Max disasters. Calhoun indicated that Boeing’s era of shoveling cash to shareholders is long gone.