Boeing Ended A Turbulent Year By Firing Its CEO

Boeing Ended A Turbulent Year By Firing Its CEO

about 4 years ago2 mins

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American aerospace giant Boeing parted ways with its CEO on Monday after he failed to resolve the 737 Max crisis. Investors got an early Christmas present – but with an exit package worth up to $39 million, the boss might just be jolly too… 🙄

What does this mean?

Good King Muilenberg looked out on the feast of John Ogilvie. March 10th was the day Boeing’s 737 Max 8 – the latest incarnation of the world’s most successful jet – was involved in its second deadly crash in five months, prompting airlines worldwide to ground their fleets.

Both campaigners and investors began calling for Boeing's CEO to resign. And those calls only grew louder as carriers canceled contracts, earnings fell short, and thousands of orders remained unfulfilled 🤨

When Boeing finally announced last week that it was indefinitely halting production of all 737 Max models – once responsible for a third of its profit – the writing was really on the wall. Boeing’s CEO fell on his sword – and its stock rose 3%.

Boeing’s share price (blue) has lagged behind the US stock market (green) this year
Boeing’s share price (blue) has lagged behind the US stock market (green) this year

Why should I care?

Boeing needs to get back on course fast. Its woes affect not only its customers' fortunes but its employees' and suppliers' – making Boeing important to the overall US economy (and recipient of hefty government subsidies).

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But what goes around comes around: aerospace companies rely heavily on government contracts (witness Boeing’s Starliner launch for NASA this week), and a weakening economy could lead to Uncle Sam tightening the purse strings ☝️

Europe’s answer to Boeing, Airbus – which also comes in for chunky subsidies – may benefit from its competitor’s continued misfortune in 2020. It soared past Boeing at the influential Paris Air Show this year – and its 737 Max rival the A320 can now cross the Atlantic. Still, with air freight experiencing its steepest decline in a decade, both companies may soon have problems unless global trade picks up…

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