Via Financial Times

Boeing has stripped Dennis Muilenburg of his chairmanship of the crisis-hit aircraft manufacturer, keeping him on as chief executive but elevating David Calhoun, its senior independent director, to head the board.

The move came hours after the release of a critical report which found that Boeing had not been clear enough in explaining to regulators an automated system which has been blamed for the fatal crashes of two of its 737 Max jets in the past year.

In May Mr Calhoun told the Financial Times that the board had no intention of splitting Mr Muilenburg’s roles. 

“We only see detriment to a young growing leader that we all have a lot of confidence in. Swiping that title away because someone suggests we should, I don’t know how that helps anything in that process,” Mr Calhoun said at the time. “We don’t have a faction on the board arguing the other way.”

The company presented Friday evening’s announcement as its latest step to strengthen its governance and safety procedures, saying that splitting the chairman and chief executive roles would enable Mr 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”. 

In a statement, Mr Calhoun said: “The board has full confidence in Dennis as CEO and believes this division of labour will enable maximum focus on running the business with the board playing an active oversight role.” Boeing would soon appoint a new director “with deep safety experience and expertise” to the board, he added.

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Mr Muilenburg said he was “fully supportive” of the decision.

Earlier on Friday both Boeing and the US aviation regulator were criticised in a report into the flight control system of the Max.

The report, commissioned by the Federal Aviation Administration, found that Boeing had not properly explained to regulators the aircraft’s anti-stall system, known as the manoeuvring characteristics augmentation system, or MCAS, which has been implicated in both crashes. It also faulted regulators for not doing enough of their own scrutiny. 

The US and international regulators who wrote the report found: “In the B737 Max programme, the FAA had inadequate awareness of the MCAS function which, coupled with limited involvement, resulted in an inability of the FAA to provide an independent assessment of the adequacy of the Boeing proposed certification activities associated with MCAS.”

The publication of the report is one part of the re-certification process for the Max, which has dragged on for several months longer than was originally expected, resulting in airlines having to cancel thousands of flights. American Airlines said this week it did not expect to bring the Max back into service until January. 

Boeing said in response to the report: “Boeing is committed to working with the FAA in reviewing the recommendations and helping to continuously improve the process and approach used to validate and certify airplanes going forward.”

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