David Calhoun, who replaced the embattled CEO Dennis Muilenburg as chair of Boeing’s board of directors on Oct. 11, is known for his skills at steering troubled companies back to a profitable path.

Those talents may get their biggest test as Calhoun takes charge of Boeing’s response to the 737 MAX crisis, a disaster that cost Muilenburg his role as board chair and on Tuesday saw the ouster of Kevin McAllister, Boeing’s head of commercial aviation.

In coming months, analysts say, Calhoun will assume a much larger role at Boeing. He will oversee efforts to assuage distrustful regulators and skeptical customers and prepare for lawsuits by families of the 346 victims from two fatal MAX crashes. He will also have a greater hand in setting future strategy for a company that is falling further behind rival Airbus every day its MAX fleet remains grounded.

But Calhoun’s thorniest task may be in deciding what to do about Muilenburg. The CEO’s effectiveness has been badly undermined by his handling of the MAX crisis and by lingering questions about what he and other Boeing executives knew about problems with MCAS, the automated flight control system implicated in both MAX crashes.

Boeing’s board has steadily rejected demands by some outsiders to fire Muilenburg outright. On the day Boeing announced the role changes, Calhoun insisted that Muilenburg “has our complete and total confidence” in his continued roles as Boeing CEO and president.

But industry observers think Muilenburg is on thin ice, and that Calhoun must manage the strained relationship between the company’s board and its beleaguered CEO.


“It’s absolutely a demotion when you take the chairman’s title away,” said Scott Hamilton, a Seattle-area industry analyst who has called for Muilenburg’s ouster. “The consensus is that Dennis is on his way out [and] that this is just the first step in that.” Boeing declined to make Calhoun available for an interview.

In many ways, Calhoun, 62, is ideally suited to navigate such a corporate minefield.

A “graduate” of General Electric, where other prominent Boeing executives also have started out, Calhoun has been closely involved in the aerospace business since 2000, when he took over GE’s airplane engine division and then shepherded that business through the downturn that followed the 9/11 terrorist attacks.

Calhoun also served as a turnaround specialist at other firms, including as board chair of Caterpillar when the heavy-equipment company faced a federal tax investigation.

As important, in his current role as head of portfolio operations at Blackstone, one of the world’s largest private equity firms, Calhoun closely supervises management teams that are trying to boost performance at firms that Blackstone has acquired.

As Boeing’s new board chair, Calhoun’s “job is to say, ‘You guys in management, bring me some reasonable plans on how we will get out of this mess and how we will move forward,'” said Adam Pilarski, an analyst at Avitas and former chief economist at McDonnell-Douglas.


In particular, analysts expect the newly empowered Calhoun to closely scrutinize Muilenburg’s executive decisions and strategic initiatives. That will mark a significant change at Boeing, where Muilenburg’s twin roles as both CEO and board chair meant he effectively had the power to both propose and approve his own initiatives for the aircraft maker — an arrangement inherited from his predecessor, Jim McNerney.

By splitting the roles — a move reportedly considered as early as last spring, shortly after the second of the two MAX crashes — analysts say that Boeing’s board has usefully separated the CEO’s job of running the company day to day from the chair’s job of setting long-term strategy. “It’s tough to make big strategic decisions when you’re operating in crisis mode,” said Richard Aboulafia, a longtime industry analyst with Teal Group.

That new arrangement will give Calhoun a critical say in matters such as whether Boeing will greenlight future projects, notably the so-called New Midmarket Airplane, or NMA, a next-generation double-aisle aircraft that has been delayed by the MAX crisis.

But Calhoun’s main task will be short-term: getting the 737 MAX back in service globally and resuscitating what Boeing had expected would be its largest source of future earnings.

A Boeing 737 Max 8 sits behind the Boeing 737 Renton factory waiting for engines. The Angle of attack (AOA) instrument of the 737 MAX, is the bottom piece of equipment below just below the cockpit windshield. 

Photographed on March 13, 2019 209611 209611

That will mean deciding material questions such as how quickly to ramp up 737 MAX production. Where Muilenburg reportedly wanted to boost monthly output, currently at 42 planes, to 57 by 2020, analysts say Calhoun is more cautious and favors a lower number initially.

But it’s also likely to mean a much more visible public-relations role for Calhoun as Boeing tries to woo the government regulators who will decide the MAX’s immediate fate.


Many regulators, especially at the Federal Aviation Administration, reportedly are upset at Muilenburg for stonewalling them about problems with MCAS. Calhoun “ought to be in Washington having dinner with [FAA administrator Stephen] Dickson,” said Hamilton, the analyst. “Muilenburg doesn’t have credibility anymore.”

It is such credibility concerns that have prompted calls for Muilenburg’s ouster — and speculation that one of Calhoun’s many new priorities as chairman may be scouting for Muilenburg’s successor.

Indeed, by some accounts, Calhoun himself may be in the running for the CEO job.

Back in 2005, according to The Wall Street Journal, Calhoun was briefly a candidate for the job, which ultimately went to GE alum McNerney. “If the board were to decide that a CEO change was in order, Calhoun would be a strong candidate,” said Cowen analyst Cai von Rumohr.

Yet such a move for Calhoun would bring its own complications.

For all his talents, Calhoun would be unlikely to satisfy critics who think he, like Muilenburg, is too steeped in Boeing’s corporate culture to make necessary changes.


Indeed his background in GE, mirroring that of McNerney and McAllister, represents the Jack Welch school of corporate strategy and the ruthless focus on boosting the stock price that critics blame for destroying Boeing’s older engineering culture that prioritized quality and safety.

Calhoun, who joined the Boeing board 10 years ago, would have played a part in the company’s response to the crash, but also in the 2011 decision to build the MAX, an update of an aircraft design that was already 44 years old, instead of designing a new aircraft from scratch.

Other industry observers say the real significance of Calhoun’s promotion, and Muilenburg’s demotion, is far from settled.

For both executives, the future likely depends heavily on such unknowns as how quickly the MAX can return to service, or whether new damaging allegations emerge — or even how well Muilenburg performs when he appears before Congress Oct. 30.

But at the very least, some industry watchers say, elevating Calhoun to board chair gives the board more options now if the crisis worsens. As one analyst put it, if Muilenburg’s presence continues to hurt the company more than it helps, Calhoun and other board members “now have the flexibility to make another move.”

An earlier version of this story incorrectly identified Cai von Rumohr’s firm, which is Cowen.