Boeing names new board chairman in setback for CEO

CHICAGO – Boeing CEO Dennis Muilenburg has lost his title as chairman of the troubled aircraft manufacturer, nearly a year after the first of two crashes of its 737 Max 8 that together killed 346 people.

Boeing announced late Friday that company directors decided to separate the two jobs and elected one of their own, David L. Calhoun, to serve as non-executive chairman.

Earlier on Friday, a panel of international aviation regulators issued a report critical of Boeing and the Federal Aviation Administration over how the Max 8 was approved to fly. The group said Boeing failed to adequately inform the FAA about changes to a key flight-control system implicated in the accidents.

Muilenburg said in a statement that he supported splitting the CEO and chairman jobs.

“The board has full confidence in Dennis as CEO and believes this division of labor will enable maximum focus on running the business with the board playing an active oversight role,” Calhoun said in a statement issued by the company.

The board in April opposed a shareholder resolution to split the jobs amid criticism over Boeing’s response to the accidents. The measure was rejected by a 2-to-1 margin.

The Max 8 was Boeing’s best-selling plane until being grounded worldwide in March after the crashes in Indonesia and Ethiopia. The company has set aside billions compensate airlines affected by the grounding.

The Justice Department and Congress are investigating the company, which also faces dozens of lawsuits by families of passengers who died in the Max 8 crashes.

Muilenburg is scheduled to testify Oct. 30 before a House committee looking into the jet’s certification.

Boeing was initially optimistic that the Max 8 could return to flight this spring, but work to fix flight software took longer than expected. In June, FAA test pilots discovered another problem in the plane’s computers, extending the grounding.

Muilenburg said recently that Boeing expected the plane to be back in service by early in the fourth quarter, but the company still hasn’t formally submitted its fixes to regulators. U.S. airlines don’t expect the plane back until at least January, and it could be longer in other countries.

Chicago-based Boeing is one of two companies that dominate the building of large airliners; Europe’s Airbus is the other. Boeing is also a major defense contractor. It has more than 150,000 employees.