Boeing's CEO's resignation is long overdue: Congressman

Valentina Caval

Boeing (BA) said Monday CEO Dennis Muilenburg is leaving the company — an inevitable move as the company faces the most turbulent time in its over 100-year history. Two fatal crashes of the 737 Max jets left 346 people dead in the past two years, sparking backlash from victims, lawmakers and regulators around the country. Chairman David Calhoun will take over as CEO starting January 13, 2020. Until then, Boeing’s CFO Greg Smith, will serve as interim chief executive effective immediately, the company said.

“I called for Mr. Muilenburg's resignation when he testified before the Transportation and Infrastructure Committee in October,” Congressman Jesús “Chuy” Garcia (D-IL) told Yahoo Finance’s On the Move. “There is a culture of negligence, incompetence or corruption, and it started at the top.”

The 737 Max has been grounded worldwide since March, and the company has faced multiple delays trying to get the jet back in the air. Boeing expected the certification that would deem the 737 Max safe by the end of 2019 but the Federal Aviation Administration said it will take all the time it needs to certify the jet.

Just over the weekend, the head of the FAA Stephen Dickson went after Muilenburg for putting pressure on the agency to move faster to approve the return of the 737 Max, according to The New York Times.

FILE - In this Oct. 29, 2019, file photo Boeing Company President and Chief Executive Officer Dennis Muilenburg appears before a Senate Committee on Commerce, Science, and Transportation hearing on 'Aviation Safety and the Future of Boeing's 737 MAX' on Capitol Hill in Washington. Muilenburg is resigning amid ongoing problems at the company over the troubled Max 737 aircraft. The board of directors said Monday, Dec. 23 that Muilenburg is stepping down immediately. The board's current chairman David Calhoun will become president and CEO on Jan. 13, 2020. (AP Photo/Andrew Harnik, File)

“Muilenburg’s relentless focus on the stock price negatively affected the employees performance,” Garcia said. “Boeing employees have lied to the FAA, pilot training assumed old equipment would suffice and that turned out to be deadly.”

Despite the disastrous year for the company, Boeing’s stock has fared better than expected. Boeing shares were up nearly 3% on Monday and up close to 5% year-to-date.

Calhoun will be forced to hit the ground running as the timeline for the return of the 737 Max remains in question. Last week, the company announced it will suspend production of the jet in January. Boeing has 400 undelivered planes just for this year alone, according to the Wall Street Journal. Airlines have lost millions of dollars in revenue because of the grounding.

“I would like to hear from Mr. Calhoun what would he do differently,” Garcia said. “Most importantly the safety of the public must come first.”

Valentina Caval is a Producer at Yahoo Finance.

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