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Boeing’s Embattled CEO Vows to See 737 Max Crisis Through to End

Nov. 6, 2019
Muilenburg says he considered resigning but said it "wasn't in his character" not to "see it through."

Boeing Co.’s embattled boss said he had considered stepping down in the wake of two deadly crashes but vowed to stay on to lead the planemaker through one of the worst crises in its 103-year history.

“It’s fair to say I’ve thought about it,” Chief Executive Officer Dennis Muilenburg said about resigning, speaking Wednesday at a conference. “But to be frank, that’s not what’s in my character.”

The Chicago-based manufacturer has been engulfed in crisis since March, when regulators grounded its best-selling 737 Max after two accidents killed 346 people. The pressure on Muilenburg has mounted as the plane’s anticipated return has slipped from May to the fourth quarter -- or beyond -- while regulators scrutinize redesigned software for the jet’s flight control system.

The accidents “happened on my watch, and I feel obligated, I feel responsible to stay on it, work with the team to fix it, to see it through,” Muilenburg said at the New York Times Dealbook Conference in New York.

Muilenburg said he would still like to be Boeing CEO three years from now, adding that he intended to stay on “as long as the board allows me to serve in this role.”

‘Near Future’

A critical milestone for Boeing and Muilenburg, regulatory clearance for the Max’s return to flight, may finally be in sight, said Doug Parker, CEO of American Airlines Group Inc.

“I feel better about the fact that the aircraft is going to be certified in the near future,” Parker said at a Baird industrial conference in Chicago. The timeline feels more like weeks “versus the great uncertainty we’ve had in this process,” he said.

American has removed the Max from its schedule through mid-January. Adding it back by then would require FAA certification of the plane in early December, which Parker called “a best-case scenario.”

Boeing fell less than 1% to $356.06 at 1:44 p.m. in New York. Through the Tuesday close, the shares had declined 15% since the March 10 crash of an Ethiopian Airlines jetliner. The decline was the largest during that period on the Dow Jones Industrial Average.

Chairman’s Support

Muilenburg’s appearance came a day after Boeing Chairman David Calhoun said on CNBC that the board still has confidence in the CEO. Muilenburg faced repeated calls last week to resign from U.S. lawmakers and family members of crash victims during two days of grueling testimony on Capitol Hill. The CEO was stripped of the chairman’s job last month.

Calhoun’s defense of Muilenburg drew the ire of a group of victims’ relatives, who called on the chairman to step down. Consumer advocate Ralph Nader, whose grandniece died in the March accident, is advocating for Boeing to overhaul its senior management and board.

“The whole system at the top of Boeing is now not good for the future of Boeing because they can’t admit they need to change things fundamentally,” Nader told CNBC on Wednesday.

Muilenburg stumbled during the hearings as lawmakers pressed him on details for his 27% pay hike last year -- to $23 million in total compensation -- and why he hadn’t pledged to donate his bonus in the wake of the 737 Max disasters. In October 2018, less than five months before the crash in Ethiopia, a jet operated by Lion Air slammed into the Java Sea off the coast of Indonesia.

After the Congressional hearings, Muilenburg decided to forgo short-term and long-term bonuses until the Max fleet is back in service, saying doing so would “send a message of responsibility.”

Muilenburg visited with grieving crash relatives between the two sessions in Congress and said he was “heartbroken” by their stories of loss.

“I wish I had gone to visit them earlier,” he said at the Dealbook conference.

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