Boeing replaces senior executive as 737 MAX crisis grows

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By Eric M. Johnson and David Shepardson

SEATTLE/WASHINGTON (Reuters) – Boeing Co (N:) on Tuesday replaced the top executive of its commercial airplanes division, Kevin McAllister, marking the first high-level departure since the fallout started over two fatal crashes of its 737 MAX.

The company named veteran Boeing executive Stan Deal, who has been at the helm of Boeing’s Global Services division, to succeed McAllister effective immediately as president and chief executive of Boeing Commercial Airplanes.

The world’s largest planemaker faces a growing crisis over the eight-month safety ban of its previously best-selling flagship jetliner prompted by crashes in Indonesia and Ethiopia that killed 346 people.

The company is also the target of harsh criticism for failing to turn over instant messages from a former pilot describing erratic 737 MAX simulator software to the Federal Aviation Administration (FAA) for months, prompting a demand for answers from the agency.

Tuesday’s announcement, a day before the company was due to report quarterly financial results, shocked some Boeing employees, with one insider calling McAllister a “scapegoat” and pointing out that he came to the helm of BCA later in the 737 MAX development.

McAllister had been on the road frequently for months meeting with airline customers, playing a central but behind-the-scenes role as Boeing scrambles to rebuild trust with customers and the flying public.

McAllister, a regular figure at industry conclaves, had formed deep relationships with key airline customers forged during his previous position selling services for General Electric Co (N:).

He could not be reached for comment.

Deal joined Boeing in 1986 and was previously president and CEO of Boeing Global Services, which sells analytics, parts and maintenance services for airline customers. Boeing is still working to win approval to unground the 737 MAX after the crashes.

The management change was announced after Boeing’s board met in San Antonio.

Earlier on Tuesday, FAA Administrator Steve Dickson said Boeing was making progress toward winning approval to resume flights but would need “several weeks” before a key certification test flight can take place.

Next week, Boeing’s chief executive, Dennis Muilenburg – who was stripped of his title as chairman by the board this month – will testify before Congress for two days. “We’re committed to delivering on our commitments and regaining trust with our regulators, customers and other stakeholders,” Muilenburg said.

A deliberate decision was made early in the MAX crisis to make Muilenburg the public face of the company, sources said, although he has faced criticism for what some in the industry have characterized as a wooden and lawyer-driven response to concerns raised from the crashes.

New board Chairman David Calhoun said the board backed the decisions. “Boeing will emerge stronger than ever from its current challenges and the changes we’re making throughout Boeing will benefit the flying public well into the future,” he said in a statement.

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