Boeing’s new CEO faces an uphill battle to restore faith in the company and get the troubled 737 Max back in the air

Boeing’s new chief executive officer, David L. Calhoun, began his first day on the new job on Monday.

An industry veteran who has been on Boeing’s board for a decade, Calhoun is known as a “turnaround specialist,” who has helped fix companies that were struggling, or pulled them through industry turmoil.

As he assumes the new role at Boeing’s helm, eyes will be on Calhoun as he faces a set of challenges unlike what he’s dealt with before.

Here’s what you need to know about Calhoun, his background, and the difficult job ahead of him.


Calhoun, 62, is a veteran industrial leader who is no stranger to crisis, so it’s clear why he appealed to Boeing.

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David Calhoun.
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Brendan McDermid/Reuters


Until 2006, Calhoun was a senior executive at General Electric, where he spent 26 years. Starting just before the September 11 attacks, which roiled the airline and airplane industry, he headed up the unit that builds aircraft engines, a unit which posted $47 billion in annual sales by the end of his tenure.

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David Slotnick/Business Insider

In 2006, Calhoun moved to Nielsen, the media ratings firm, where he was credited with helping to rebuild the company after a private equity takeover by KKR, Blackstone, and Carlyle Group.


In 2013, Calhoun joined Blackstone Group as the head of its portfolio operations group, advising owned companies and consulting on new buys. Then, in 2017, he was named chairman of Caterpillar, the construction equipment company that was under government scrutiny over tax and export practices, according to the New York Times.


Calhoun was named to Boeing’s board of directors in 2009, and became chairman in October after the rest of the board decided to strip Dennis Muilenburg of that title and split the chair and CEO roles.

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Dennis Muilenburg.
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Reuters

Over his career, Calhoun became known as a decision-maker with an ability to execute on bold plans and strategies. He was mentored by famous GE CEO Jack Welch, and was courted by a wide range of companies by the end of his time at GE —  the New York Times reported in 2006 that even Boeing had approached him over its chief executive role.

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Jack Welch.
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Lucas Jackson/Reuters

As Calhoun arrives at Boeing for his first day on the job, he there are several objectives he’ll need to start working towards immediately, with other long-term goals that can’t be neglected.

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A Boeing 787-10 Dreamliner taxis past the Final Assembly Building at Boeing’s plant in North Charleston, South Carolina, on March 31, 2017.
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Randall Hill/Reuters

Under Calhoun, Boeing’s top priority will be getting the 737 Max back in the air. The company’s flagship narrow-body jet has been grounded since March, 2019, following the second of two fatal crashes within a five-month period.

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A Boeing 737 MAX airplane is seen parked at a Boeing facility on August 13, 2019 in Renton, Washington.
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David Ryder/Getty Images

Last week, the company temporarily halted production of the Max, causing disruptions to a vast global supply chain. One supplier, Spirit AeroSystems, said last week that it would be forced to lay off 2,800 workers due to the halt.

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Rows of part-built Boeing 737 Max planes at the Wichita, Kansas, facility of Spirit AeroSystems.
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Reuters

The grounding has cost Boeing a substantial amount. The company took a $5 billion charge last year as it planned to compensate airline customers which have been forced to recalculate expansion and route growth.

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Grounded Boeing 737 MAX aircraft are seen parked in an aerial photo at Boeing Field in Seattle, Washington, U.S. July 1, 2019. Picture taken July 1, 2019.
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REUTERS/Lindsey Wasson

A belated decision to recommend pilots undergo simulator training before flying the Max could cost Boeing an additional $5 billion.

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The cockpit of Boeing 737 MAX 8 aircraft in June 2018.
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REUTERS/Abhirup Roy

To get the plane flying again, Calhoun’s Boeing must complete regulators’ requests while shepherding the plane through the FAA’s certification process. The plane-maker may also need to work separately with other nations’ regulators, some of which have indicated they will not reciprocate the FAA’s certification decision.

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FILE PHOTO: Federal Aviation Administration (FAA) Administrator Stephen Dickson testifies before a House Transportation and Infrastructure Committee hearing at the Rayburn House office building in Washington
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Reuters

As Boeing gets the Max airworthy again, Calhoun will need to work to repair the company’s frayed relationships with the FAA and Congress, which have been put out by the Max crisis itself, as well as Boeing’s haphazard handling of it under Muilenburg.


Calhoun will also need to fix Boeing’s relationships with angry airline customers, to convince the flying public that its planes are safe, and to rebuild trust with shareholders, after almost a year in which the company offered timing estimates and updates on the plane’s return that turned out to be arbitrary.

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REUTERS/Mike Blake

While the Max may be the highest profile and most pressing issue, it is not the only project on which Calhoun will have to focus.

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Several Boeing 777X aircraft are seen in various stages of production during a media tour of the Boeing 777X at the Boeing production facility in Everett,
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Lindsey Wasson/Reuters

Boeing’s 777X program, the next generation of wide-body jetliners, has faced numerous delays and setbacks, leading the company to push the plane’s timeline back and risking further delivery delays to customers. To avoid potentially missing out on further orders or losing money to late-delivery penalties, the company must bring the plane across the finish line.

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Boeing

Similarly, Boeing’s much rumored and discussed new midsize aircraft, or NMA, seems to be in a state of limbo as the plane-maker focuses on the Max.

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Thomson Reuters

As airlines across the US and globe look for a longer range narrow-body to replace the aging 757, and to bring flexibility to fleets with planes that can handle short hops with high load factors, or shorter long-haul routes like the US east coast to western Europe, Boeing will need to offer a replacement, or risk losing this sector of business.


It has already seen customers defect from the 757 to Airbus’ solution, the A321XLR from rival plane-maker Airbus.

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Airbus

United announced in December that it had ordered 50 of the Airbus jet to replace its aging 757 fleet.


While the highest profile issues and objectives are in Boeing’s commercial division, Calhoun will also have objectives to meet in the defense arm.

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Aerial photos show Boeing 737 Max airplanes on the tarmac in Seattle
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Boeing

Following years of trouble with the KC-46 tanker, leading to the plane’s effective grounding by the Air Force in 2019, and a failed test flight of its Starliner space capsule in December, there are a number of projects and divisions that need to be addressed.

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An illustration of Boeing’s CST-100 Starliner spaceship orbiting Earth.
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Boeing

Despite a decade on Boeing’s board and three months as chairman, Calhoun faces a new set of challenges as chief executive that are perhaps more dire and existential than what he’s managed at other companies.

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Workers are pictured next to a Boeing 737 Max 9 airplane on the tarmac of the Boeing Renton Factory in Renton, Washington on March 12, 2019.
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JASON REDMOND/AFP/Getty


Calhoun takes over as Boeing confronts an ongoing public relations nightmare stemming from the 737 Max crisis.

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An airplane fuselage bound for Boeing’s 737 Max production facility sits in storage at their top supplier, Spirit AeroSystems Holdings Inc, in Wichita, Kansas, U.S. December 17, 2019.
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Nick Oxford/Reuters

The recent release of messages between Boeing employees mocking regulators and describing the 737 Max as troubled and flawed was just the latest hit.


Calhoun therefore faces an uphill battle as he tries to get the plane approved to fly again, and regain a degree of consumer confidence.


He’ll also have to confront and address a culture at Boeing that has been widely described as “broken,” as demonstrated by the emails.

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Stephen Brashear/Getty

An accounting and finance-first approach at Boeing, which some have argued would be better served by an engineer-led culture, has stymied innovation and creativity and created the atmosphere that allowed the Max to be built with flaws.


A renewed emphasis on engineering, ingenuity, and safety, with leadership corroborating those values and reporting structure that facilitates idea sharing and safety, will be vital to establish.

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Boeing’s new 737 MAX-9 is pictured under construction at their production facility in Renton, Washington
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REUTERS/Jason Redmond

Boeing’s costs are likely to continue to mount as long as the plane remains grounded, with a costly certification process, compensation due to airlines, and further liabilities over the crashes continuing to be assessed. Managing these will be crucial for Calhoun along with the board to help stabilize Boeing’s finances.

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An undelivered TUI Boeing 737 Max plane sits at a Boeing employee car park in Seattle, Washington, in June 2019.
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Stephen Brashear/Getty Images

As the US’ largest exporter, this is an issue of national importance.