By Shivansh Tiwary and Nathan Gomes
(Reuters) – Boeing CEO David Calhoun will leave the troubled aircraft maker at the end of the year, leaving a difficult turnaround job to his yet-to-be-named successor.
Calhoun – a veteran crisis manager – was hired in 2020 to steer the planemaker out of a reputation setback after crashes in 2018 and 2019 killed nearly 350 people and caused the grounding of its best-selling 737 MAX jet.
But his tenure might not join the list of his successful earlier stints including at Caterpillar, General Electric and media company Nielsen, leaving when the iconic planemaker is struggling to resolve production issues and safety concerns.
The Jan. 5 mid-air panel blowout was the most recent in a spate of safety issues that have shaken the industry’s confidence in Boeing and hampered its ability to increase production to meet high demand for jets.
COMPETITION
Under Calhoun’s leadership, the company has struggled to keep pace with competitor Airbus.
Boeing stock has lost 43% of its value since Calhoun took the top job on Jan. 13, 2020, underperforming the benchmark S&P 500 index.
Rival Airbus added more than 26% to its market cap during the same period.
While both planemakers have received bumper orders for their jets as airlines try to cater to a post-pandemic travel boom, Boeing’s production and quality issues have frustrated customers.
Airbus, meanwhile, has been steadily growing single-aisle market share with its A320 jet family in the wake of multiple crises involving the MAX.
There have, however, been some bright spots.
The Arlington, Virginia-based planemaker’s revenue has edged past Airbus over the past four years.
Airbus and Boeing reported a negative cash flow in 2020 as the COVID-19 pandemic brought the sector to a halt after restrictions across the world dented demand for air travel and, thus, new airplanes.
Airbus experienced better cash flow performance in 2021 and 2022. Boeing performed better in the last year and 2020.
However, Boeing expects to burn more cash than expected in the current quarter as fewer deliveries, lower production volumes at its commercial division and pressure on working capital affect its free cash flow.
(Reporting by Shivansh Tiwary and Nathan Gomes in Bengaluru; editing by Arpan Varghese and Sriraj Kalluvila)
Comments