- Boeing stock leaped as much as 3.7% early Monday after the company announced the resignation of CEO Dennis Muilenburg.
- The move comes as Boeing continues to weather the fallout from its 737 Max crisis. The model’s crashes in 2018 and 2019 killed 346 people and have since left the firm in the center of regulatory and public scrutiny.
- Chairman David Calhoun will replace Muilenburg effective January 13, while Chief Financial Officer Greg Smith will serve as CEO in the interim period.
- Watch Boeing trade live here.
The move comes as Boeing continues to endure its 737 Max crisis. The fallout left its best-selling model grounded around the world and soured the firm’s reputation as a stable industrial giant.
Chairman David Calhoun will replace the chief executive effective January 13, while Chief Financial Officer Greg Smith will serve as CEO in the interim period.
“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,” a company press release said.
Boeing has been centered in controversy after two crashes of its 737 Max planes. The crashes, taking place in October 2018 and March 2019, killed 346 people. Muilenburg faced scrutiny from the public, shareholders, and legislators for his handling of the crisis. He has since looked to place the aircraft back into service, but delays in gaining Federal Aviation Administration approval have pushed the timeline for such a return into 2020.
Muilenburg’s departure follows Boeing’s announcement that it would suspend production of the troubled jet in January. The company was still producing the 737 Max and building up inventory for when it could resume deliveries. Boeing already has 400 undelivered planes in storage.
Boeing’s statement didn’t address the 737 Max controversy beyond Calhoun noting that he believes in “the future of Boeing and the 737 Max.”
Boeing serves a major role in the US economy, and its recent crisis is set to have a considerable impact on economic growth heading into the new year. The production halt will cut 0.5 percentage points from GDP growth in the first quarter of 2020, JPMorgan chief US economist Michael Feroli projected in a December 17 note, citing the lack of growing inventory for the hit.
Boeing traded at $338.51 per share at 10:10 a.m. ET Monday, up 5% year-to-date.
The firm has 13 “buy” ratings, 14 “hold” ratings, and two “sell” ratings from analysts, with a consensus price target of $375.58, according to Bloomberg data.
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