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By Andrew Tangel
Boeing Co.'s board stripped Chief Executive Dennis Muilenburg of his dual role as chairman on Friday in an unexpected shake-up at the highest ranks of the company amid the prolonged crisis of its 737 MAX plane.
Boeing said it took the action to allow Mr. Muilenburg to focus on returning the MAX fleet to service after it was grounded world-wide in March following two fatal crashes within less than five months.
The leadership change came hours after a panel or air-safety experts sharply criticized Boeing and the U.S. Federal Aviation Administration for missteps that led to the crashes that killed all 346 people on flights in Indonesia and Ethiopia.
David Calhoun, a private-equity executive who has been the board's lead director, will become its chairman, the company said. The board has "full confidence in Dennis as CEO and believes this division of labor will enable maximum focus on running the business with the board playing an active oversight role," Mr. Calhoun said in a statement.
Getting control of the crisis proved challenging for Mr. Muilenburg, who is slated to testify before a House committee in Washington, D.C., at the end of the month.
The prolonged grounding of the MAX, the Chicago-based aerospace giant's best-selling jet, has disrupted the plans of airlines and passengers around the world. Boeing is considering further cutting production or temporarily shutting down MAX assembly at the Renton, Wash., factory where the airplane is built.
The manufacturer has faced repeated setbacks in working to get the MAX flying again. An update to the MAX flight-control software to fix problems with the jet had previously been expected to gain FAA approval as early as April. The discovery of another flaw has added to delays.
Boeing hasn't yet submitted the revised software for FAA approval amid scrutiny by aviation regulators, further pushing back the aircraft's return to passenger service.
Three U.S. operators of the MAX -- United Airlines Holdings Inc., American Airlines Group Inc. and Southwest AIrlines Co. -- don't expect to again fly passengers on the aircraft until early next year.
Mr. Muilenburg said he fully supported the board's move and said the team was focused on returning the 737 MAX safely to service. Mr. Muilenburg will remain a director on the board. Boeing said it also plans to name a new director with "deep safety experience and expertise" to serve on the board's newly formed safety committee.
Boeing's shares were little changed in aftermarket trading, but the biggest U.S. exporter has lost around $30 billion in market value since the Ethiopian Airlines crash in March.
Earlier this year, Boeing shareholders rejected a proposal for an independent chairman following criticism of the company's response to the two 737 MAX crashes. The push for an independent chairman was rejected by 66% of shares. The 34% vote in support of the proposal compared with a 25% favorable vote for a similar measure last year.
After an April shareholder meeting, Mr. Muilenburg didn't respond directly to questions about whether he had considered resigning. "I am very focused on safety," he said.
--Robert Wall contributed to this article.
Write to Andrew Tangel at Andrew.Tangel@wsj.com
(END) Dow Jones Newswires
October 11, 2019 19:37 ET (23:37 GMT)
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