In the most visible personnel move yet during the 737 MAX crisis, Boeing named long-time executive Stan Deal to take over its Boeing Commercial Airplanes (BCA) unit, removing Kevin McAllister and turning the reins of the company’s largest business over to a seasoned leader with significant supply-chain and customer-support experience.
The move, announced Oct. 22 and effective immediately, puts Deal in charge of a wobbly business that has two of its major programs, the MAX and 777X, in severe turbulence. Deal’s 33-year Boeing career includes senior roles managing Boeing’s commercial supply chain and aftermarket support functions, as well as leading Asia-Pacific sales. He developed Boeing’s Partnership for Success program that seeks to wring costs out of the company’s supply chain, and also was the first president and CEO of Boeing Global Services (BGS), launched three years ago. Ted Colbert, most recently Boeing’s interim chief information officer, assumes Deal’s former role atop BGS, while Vishwa Uddanwadiker steps into Colbert’s former role.
“The Boeing board fully supports these leadership moves,” Boeing chairman David Calhoun said in a statement. “Boeing will emerge stronger than ever from its current challenges and the changes we’re making throughout Boeing will benefit the flying public well into the future.”
The move to replace McAllister comes less than two weeks after Boeing split the chairman and CEO roles. Calhoun, a board member since 2009, was named chairman, while Dennis Muilenburg retained the CEO title. Boeing said in a separate Oct. 22 statement that the split is helping Muilenburg “sharpen his focus full-time on running the company, delivering on our customer commitments, and strengthening our focus on product and services safety.”
McAllister joined Boeing in November 2016 after a successful stint helping to grow GE Aviation Services into commercial aviation’s most lucrative aftermarket provider. A third of his tenure at BCA was spent under the cloud of the 737 MAX crisis, which started with the Oct. 29, 2018, crash of Lion Air Flight 610, a MAX 8. The MAX has been grounded since mid-March, following the Mar. 10 crash of Ethiopian Airlines Flight 302, another MAX 8.
The accidents and grounding have cast significant scrutiny on the MAX’s development and certification, the vast majority of which happened before McAllister joined Boeing. It is not clear how much, if any, influence he had on the company’s response to the accidents and grounding, including the decision to cut 737 production from 52/month to 42/month in April. Muilenburg has been the company’s primary face during the MAX crisis.
“We’re grateful to Kevin for his dedicated and tireless service to Boeing, its customers and its communities during a challenging time, and for his commitment to support this transition,” Muilenburg said.
“Boeing is a great company with a commitment to safety I have seen firsthand working side-by-side with many thousands of tremendously talented and dedicated employees,” McAllister added. “It has been an honor to serve with such a professional team for the past three years.”
McAllister’s appointment as BCA’s chief was seen as a nod towards a broader shift to a services-driven commercial aircraft business. His significant contributions during his Boeing tenure included launching the MAX 10 less than a year after he arrived and championing a new midmarket airplane (NMA) as the company’s replacement of the 757 and 767, and answer to the highly successful A321neo. The MAX 10’s 457 orders account for about 13% of the total MAX orders, Aviation Week Fleet Data Services shows. The NMA’s status is up in the air due to the MAX crisis and Boeing’s inability to build a compelling business case.
McAllister’s status as an outsider was also noted by many, as Boeing has long favored developing senior leaders organically. By replacing McAllister with Deal, the company establishes an even heavier Boeing-legacy influence in top management. McAllister is the only executive-level Boeing employee or director to be removed since the MAX crisis began—a fact that has caused some to question how serious the company is about correcting its course during arguably its largest crisis.
But Deal is also highly respected. “He is a class act, and really good at what he does,” a senior industry executive who knows Deal well said of the new BCA leader.
His broad experience, from customer support to supply-chain issues, will likely prove useful as the company navigates its way out of the MAX crisis, working with angry customers and jittery suppliers. He also will inherit 777X program headaches. The 777-9—the first of a planned two-member 777X family—was slated to begin flight tests around mid-year. But issues with GE GE9X stator vanes have pushed these tests back until early 2020 while GE validates redesigned parts.
Boeing’s record $101.1 billion in 2018 revenues included $60.7 billion from BCA. Deal’s former business, BGS, chipped in $17 billion. Boeing reports its 2019 third-quarter earnings Oct. 23. It has suspended financial guidance due to the MAX situation.
Meanwhile, Boeing confirmed Oct. 22 that it has conducted “a dry-run of a [MAX] certification flight test.” The flight is one of several key steps that must come before the FAA approves the MAX to return to service. FAA Administrator Steve Dickson has said that approval could come as soon as 30 days after the certification flight, which is not yet scheduled. The agency is not working under any specific timeline.