U.S. Markets close in 1 hr 4 mins

What To Make Of Boeing's New Temporary CEO

Jayson Derrick

Boeing Co (NYSE: BA) named Chairman David Calhoun as its new CEO, but he will merely act as a "seat warmer" as the company searches for a "fresh" CEO.

Temporary Duties

Calhoun will assume the CEO title and oversee the return of the grounded 737 MAX to the skies. FlightGlobal's Greg Waldron said on CNBC Calhoun will likely be replaced with someone more appropriate to lead Boeing, which is at its core an engineering company.

Calhoun will likely serve as a stabilizing force in a transitioning time for Boeing, Waldron said. Boeing was among the most respected companies in the world, especially in the aerospace sector. But the 737 MAX resulted in a "tremendous body blow" to the company's image.

'Wartime CEO'

Outgoing Boeing CEO Dennis Muilenburg lacked the ability to serve as a "wartime CEO" while Calhoun is someone who can make the difficult decisions moving forward, Boyd Group International aviation analyst Mike Boyd said Tuesday on Fox Business. More important, Calhoun has the ability to "tell the board what to do, rather than run with the board."

A change in leadership is needed as Muilenburg was "drop-kicked out of the door," Boyd said. Muilenburg "wasn't good" in front of the U.S. Congress and had no control of the message Boeing was hoping to send to the media. Boeing's board was behind Muilenburg until very recently when it "woke up."

"I think this is going to change this dramatically in terms of getting things back on track," he said.

Boeing's stock traded around $336 per share at time of publication.

Related Links:

Bank Of America Cuts Boeing Price Target, Expects 737 Max To Fly Again No Sooner Than May

Boeing's Management Shuffle: The Early Reaction

Photo by Steve Lynes via Wikimedia.


See more from Benzinga

© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.