will the crisis cause Boeing's boss to fall?

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With 346 deaths in two accidents, Boeing is in shock. After removing Dennis Muilenburg, CEO, from his role as chairman of the board to his boss, the US group could go further by dismissing the boss in the coming months. Thus, Boeing wants to initiate a change in the internal culture that, so far, has given priority to shareholders at the expense of security, experts say. Dennis Muilenburg, 55, remains the company's Chief Executive Officer and will continue to oversee operations as part of this role.

But the loss of its title of chairman of the board, announced Friday by the aircraft manufacturer, removes the power to decide any new roadmap without prior agreement of this body, which can dismiss at any time. "The council wanted a continuity in the direction by these times of crisis but wished in parallel to signal a change to come, it is a warning to Dennis Muilenburg", deduces Richard Aboulafia.


This expert at Teal Group is convinced that the separation of roles "quietly prepares the ground for the replacement of Mr. Muilenburg if things do not work out in the next two or three months".

Three months? A year? The hypotheses diverge

If Boeing says "trust Dennis" Muilenburg and insists that reviewing governance "will allow him to focus on the management of the company", many believe that the days of the leader are counted. Three months? A year? The assumptions diverge but all agree that Dennis Muilenburg was temporarily left in place to help return to service the 737 MAX, grounded for seven months.

He "must stay to solve the problem of MAX, avoid destabilizing operations and undermine the morale of teams," says Michel Merluzeau at AirInsight Research. Arthur Wheaton at Cornell University believes that Boeing "saves time to put in place new security procedures".

Dennis Muilenburg succeeded Jim McNerney in July 2015, almost four years after the launch of the 737 MAX program but almost two years before certification. He inherited the decisions made by his predecessor, making it difficult to determine his share of responsibility in the current crisis. However, his initial response to the accidents of flights 610 Lion Air and 302 Ethiopian Airlines has earned him many criticism and calls to resign.

Last Chance Hearing

"It is clear that by blaming the driver immediately on Lion Air (…) this has led to a general condemnation," says Scott Hamilton, expert at Leeham, who is betting on a departure from Dennis Muilenburg in 2020. " It was a long time before Boeing apologized for these tragedies, "said Richard Aboulafia.

Dennis Muilenburg, who has spent his entire career with Boeing, will be able to plead his case on October 30 during a long-awaited hearing before US parliamentarians. This is the first time that a Boeing leader will answer the questions of elected officials on this crisis, which has already cost more than $ 8 billion to the aircraft manufacturer.

"Even if this audition goes well, it will not be positive for him," said Charles Elson, a teacher specializing in governance issues at the University of Delaware. "In all the companies where the CEO was removed from the president's hat, he did not stay there long."

$ 78 billion to shareholders in 15 years

Mr. Muilenburg's diminished powers come at a time of internal stresses within the company, notably between Boeing's headquarters in Chicago and Seattle, where the Commercial Aviation Division (BCA) and the manufacturing plants of Renton are located. the MAX, according to sources close to the file. Boeing did not wish to comment. In addition to its governance, the aircraft manufacturer must also send strong signals on a possible change in internal culture marked by the obsession with the stock market, experts agree.

This means spending cash on security and developing new programs before paying shareholders. "It is also necessary to appoint a training engineer on the board of directors", adds Richard Aboulafia. Boeing has paid $ 78 billion to its shareholders in the last 15 years, against 11 billion euros for Airbus, calculated Bank of America Merrill Lynch.



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