Boeing Co. said Kevin McAllister is stepping down as head of its jetliner division amid a crisis engulfing the 737 Max and production snarls with other planes.
Stan Deal, the head of Boeing’s global services business, will replace McAllister, the company said in a statement Tuesday. McAllister is the highest-ranking executive to depart in the wake of two deadly crashes of the Max and a worldwide grounding that began in March.
McAllister’s exit marks the second major management shakeup this month, after Chief Executive Officer Dennis Muilenburg was stripped of the chairman’s job Oct. 11. Delays in getting approval to return the plane to service have cost Boeing more than $8 billion, and the Max isn’t expected to carry any passengers until next year.
The latest personnel announcement came less than 24 hours before Boeing will report third-quarter earnings. Deal will be replaced at Boeing’s services division by Ted Colbert. Vishwa Uddanwadiker was named as Boeing’s interim chief information officer, replacing Colbert.
Boeing climbed 2.2% to $338.42 at 3:35 p.m. in New York.
As the first outsider to run Boeing’s main business, McAllister faced a steep learning curve when he jumped from General Electric Co. in late 2016. The challenge deepened immeasurably when two newly built Max planes crashed within a five-month span between October 2018 and March of this year.
Regulators grounded the jet following the second fatal accident, turning Boeing’s largest source of revenue into a cash drain overnight. Multiple investigations into the design and certification of the jet are underway, and Boeing’s reputation for safety has been battered.
Warm and humble in person, McAllister had a lower public profile than his predecessor, Ray Conner, a former chief salesman known for his white glove treatment of key clients.
While the 737 Max was largely designed and certified on Conner’s watch, McAllister drew criticism for not paying enough attention to some customers following the accidents. He retreated further from the spotlight as Muilenburg became the public face of the company during the crisis.
The commercial-airplane unit had other stumbles under McAllister. While the division notched strong sales, the 737 assembly line struggled with a shortage of engines and other parts last year. The KC-46 tanker and 787 Dreamliner programs were marred by tools and debris left within completed frames.
The jetliner division generates about 60% of Boeing’s sales, with a product lineup that spans the best-selling 737, first designed in the 1960s, to the Dreamliner’s advanced technology.