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Boeing Embarks on Quest for Revival with Strategic CEO Search

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Michael Chen

May 16, 2024 - 14:52 pm

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Boeing's Pivotal Leadership Search Led by Steve Mollenkopf

As Boeing Co. grapples with its most severe existential crisis in recent memory, its board of directors is ardently pursuing a new Chief Executive Officer capable of shouldering the monumental task of guiding the aerospace titan on a path to revival. In an unexpected move, the company has signaled that extensive aerospace familiarity is not an indispensable criterion for their next CEO, which paves the way for potential candidates from outside the industry.

Leading this crucial search is Boeing Chairman Steve Mollenkopf, whose prior role as CEO of Qualcomm Inc. honed his skills for navigating corporate adversity. Although an engineer by training, Mollenkopf's tenure at Qualcomm was marked by a series of threats to the company's very existence, positioning him as an adept figure to oversee Boeing's recruitment of transformative leadership.

Mollenkopf's Strategic Approach

Under the radar, Mollenkopf has initiated a discreet but thorough investigation to diagnose the full scale of the cleanup operation awaiting Boeing's future CEO. In pursuit of insight, he has reached out to Boeing's suppliers and airline clients, gathering firsthand accounts of their grievances. Sources who preferred to remain anonymous due to the private nature of these initiatives disclosed that executive search firm Russell Reynolds Associates Inc. is contributing to this ongoing process.

The anticipation surrounding the CEO search is set to culminate in Mollenkopf's inaugural appearance as chairman at Boeing's annual general meeting. Typically uneventful, this year's virtual assembly bears a heightened significance, with industry observers eager for any indicators of the company's trajectory. More intriguing still is the potential for controversy in the election of directors, following recommendations from proxy adviser Glass Lewis & Co. that investors cast their votes against current CEO Dave Calhoun, along with directors David Joyce and Akhil Johri, based on “significant concerns” regarding the company's safety culture.

Unveiling Boeing's Profound Challenges

The succeeding CEO will assume command of an enterprise under siege by numerous tribulations, including federal inquiries into manufacturing practices, escalating fiscal pressures, potential legal action, and a mounting tide of dissatisfied customers—events that have collectively precipitated the ousting of prior management and ceded market territory to rival Airbus SE.

In a resonant message to shareholders in April, Mollenkopf underscored the gravity of the period ahead, proclaiming a steadfast commitment to restoring Boeing to a state of vigor, safety, and success.

Reinventing a Safety Culture

Boeing's dramatic decline traces back to fundamental cultural shifts over the last twenty-five years, shifts that prioritized financial gains over production integrity. The incoming leader must reboot this flawed safety ethos, mend frail ties with the aviation industry, and reclaim market share that has gradually eroded in Airbus's favor.

The complexity of Boeing's operation—a fusion of intricate engineering, mass production, and unwavering safety standards—necessitates a leader with a genuine passion for the aerospace sector and a firm resolve to rehabilitate an ailing corporation.

Boeing's Executive Search Considerations

Given the stark challenges ahead, the learning curve afforded to Boeing's next executive must be steep and swift. Richard Aboulafia, a seasoned aviation analyst, contends that any candidate must have a deep-seated love for the industry and a fervent desire to mend a severely compromised firm.

Notably, the selection of an internal board member as CEO seems unlikely. After Calhoun's mixed outcomes as a long-standing director-turned-CEO, there's a palpable skepticism about the prudence of drawing the next CEO from the same ranks. Mollenkopf himself has declined to comment on this matter.

Mollenkopf's Journey Through Corporate Storms

At 55, Boeing's chairman transfers his accumulated wisdom from enduring a diverse array of crises at Qualcomm—an electrical engineer and inventor with a substantial patent portfolio from his university days at the University of Michigan and Virginia Tech University, the latter of which also boasts Calhoun as an alumnus. Mollenkopf's CEO tenure at Qualcomm placed him at the vanguard of confrontations that threatened the cornerstone of Qualcomm's profitability—its technology licensing operations. He emerged victorious from regulatory onslaughts, shareholder activism, and hostile takeover bids—including a failed endeavor by Apple to dismantle Qualcomm's licensing business and a $117 billion acquisition attempt by Broadcom Inc., which was thwarted by the Trump Administration.

Mollenkopf's steadfast approach, characterized by an emphasis on the superiority of technology and an avoidance of overblown expectations, is expected to shine as he helms the quest for Boeing's future CEO.

Possible Candidates for Boeing's CEO Position

The search for Boeing's next CEO remains dynamic, with no clear frontrunner identified. Nonetheless, several potential candidates have emerged, according to analyst reports and insider conversations:

  • Wes Bush (63) – Former CEO of Northrop Grumman Corp., distinguished by his integrity and favorable status within Washington D.C. circles and among regulatory bodies.
  • Larry Culp (61) – The turnaround expert at General Electric Co. Culp's contractual obligations with GE extend until August 2024, aligning with a considerable equity reward in excess of $300 million at present value. However, Boeing's staff may harbor reservations about yet another executive with a background in GE.
  • Dave Gitlin (54) – Despite being a Boeing director and the CEO of Carrier Global Corp., he has publicly declined to be considered for Boeing's top role.
  • Stephanie Pope (51) – Recently named COO and head of Boeing's commercial airplane division. Pope enjoys wide rapport among clients and financial analysts and is seen as a promising candidate, according to Ken Herbert of RBC Capital Markets.
  • Pat Shanahan (61) – A seasoned figure with an intimate understanding of Boeing from multiple perspectives. Shanahan, currently heading Spirit AeroSystems Holdings Inc., which is in negotiations to be reacquired by Boeing, made his mark by putting the 787 Dreamliner program back on course.
  • Greg Smith (57) – Chairman of American Airlines Group Inc., who has previously ascended from Boeing's factory floors to its CFO office. His prudent handling of Boeing's finances during the pandemic earned him widespread respect.

With analysis and assistance from Brooke Sutherland, this comprehensive list of candidates reflects the current operative phase of Boeing's recruitment process, which may evolve as deliberations continue.

Click here for more information about Boeing's leadership transition and the AGM.

©2024 Bloomberg L.P.

Conclusion: Boeing's Future Hinges on a Transformative Leader

Boeing's ambition to reclaim its former glory and instill a renewed commitment to aviation excellence and safety hangs in the balance, resting on the shoulders of the next CEO. With Mollenkopf at the helm of this pivotal search, the company navigates the daunting challenge of finding a leader who can not only turn the page on recent adversities but also steer Boeing toward a sustainable and prosperous horizon.

In the days to come, as Boeing's AGM unfolds and stakeholders weigh their votes, the eyes of the world remain fixed on what strategies and leadership decisions will arise from the aerospace colossus. With the pathways to recovery charted, the only missing piece is the captain to lead the voyage — a role that promises to be as much about inspiring confidence and cultural transformation as it is about technical acumen and market savvy.

Time will reveal whether the culmination of Mollenkopf's deliberations and the board's decision-making will ignite the resurgence of a beleaguered industry icon or if the challenges of the present will necessitate even bolder measures to ensure Boeing's ascent from its current trials.