Boeing Should Have Fired CEO Muilenburg

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The Boeing Co. (NYSE: BA) board of directors has fired CEO Dennis A. Muilenburg from his job as board chair but will let him stay on as chief executive, at least for now.

Design problems with the 737 Max, which happened on Muilenburg’s watch, were listed as the probable cause for two fatal crashes. Boeing and the FAA were both criticized in a new report about the certification of the plane. Since the 737 Max was pulled out of service, Boeing’s sales have plunged.

The board’s decision on Muilenburg is a punishment, but it fails to acknowledge the extent to which his management has crippled the company and will for years.

The board as much as acknowledged the flaws of Muilenburg’s management. It said when it announced the Boeing management restructuring: “The board said splitting the chairman and CEO roles will enable Muilenburg to focus full time on running the company as it works to return the 737 MAX safely to service, ensure full support to Boeing’s customers around the world, and implement changes to sharpen Boeing’s focus on product and services safety.” As if the time he spent as board chair of Boeing robbed him of substantial time to make sure the 737 Max is airworthy. Probably not.

Boeing only delivered 302 aircraft in the first three quarters of the year, down 47% from the same period a year ago. It delivered 27 plans in September, down from 87 in the same month last year. Neither the company nor outside analysts expect the trend to reverse itself anytime soon.

Boeing’s reputation has been damaged, perhaps for years, in the eyes of the public. There are already airlines that have heard from their customers who don’t want to fly the 737 Max. This means these carriers not only face the attention of customers from their loss of the 737 Max from service for several months, which will stretch into next year. They will have to sell fliers on the safety of the plane when it comes back into service.

Muilenburg always will be associated with the 737 Max debacle. He should be. The board made a mistake when it elected to keep him.


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