The most crucial CEO search in decades just took a pivotal turn: David Gitlin exited the race for the top job at the Boeing Co. From this writer’s reporting, Gitlin—chief of heating and ventilation giant Carrier Global and a Boeing director since mid-2022—was far and away the frontrunner to lead the embattled manufacturer. Gitlin’s long career in aerospace at United Technologies Corp., his status as an outsider, his relative youth (he’s 54) that potentially gave him a long run at the controls, and his success in multiplying Carrier’s share price five-fold since its public debut in 2020, made him an ideal candidate, and the Boeing board’s favorite.
But on the Carrier Q1 earnings call that began at 7:30 AM EST on April 25, Gitlin definitively nixed any possibility he’d head the fabled, over century-old planemaker, declaring that “I’ve notified both our board and the Boeing board that…I’ve given my commitment to Carrier [and] removed my name from consideration as a potential CEO of Boeing.”
That same day, Boeing’s current CEO David Calhoun, expressed strong support for the top internal candidate, Stephanie Pope. In December of last year, the board chose Pope as its new chief operating officer. Four days after she officially ascended on January 1, the notorious 737-9 Max door-plug blowout on Air Alaska flight 1282 over Portland tanked Boeing’s share price, and forced management and the board to acknowledge deep-seated flaws in its manufacturing processes and procedures. On March 25, Boeing unveiled a sweeping shakeup at the top: Calhoun announced his departure at the close of 2024, former Qualcomm CEO Steve Mollenkopf became the new chairman, and Stan Deal, head of the Boeing Commercial Airplanes division (BCA), abruptly retired. The board named Pope to replace her previous mentor Deal as CEO of BCA, adding the job of running its troubled day-to-day operations to her position as COO.
Pope’s appointment as COO late last year appeared to make sense. At the time, Boeing’s aircraft deliveries were rebounding strongly following the collapse triggered by the Lion Air and Ethiopian Airlines crashes, in 2018 and 2019 respectively, the killed 346 passengers and crew. Pope spent most of her Boeing career in top financial jobs, serving as CFO of both its services arm, and BCA. Her skills as a seasoned general manager featuring an excellent record in expense controls appeared a good fit—so long as the Boeing production machine worked smoothly.
But the January 5 disaster totally shifted Boeing’s direction in mid-air. The top priority turned to fixing the kinds of quality gaffes that caused the blowout heard round the world. Pope had never before served in a position directly overseeing manufacturing. It baffled many aerospace insiders and investors that the board would give a star in financial management what would seem a production-specialist’s task: Rallying the wrench-turners and mechanics to rework the flawed practices on the factory floor.
In an singular move, the departing Calhoun endorses Stephanie Pope
Despite calling for a radical change in direction post-January 5, Calhoun grasped Boeing’s Q1 earnings announcement as an opportunity to back Pope as the right choice to pilot Boeing. In an early-morning CNBC interview on April 25, around the time Gitlin officially dropped out, Calhoun stated, “I happen to be a pretty strong believer in Stephanie’s potential to run the company. We invested a lot in Stephanie. She came in here and put both feet on the ground and went out on that floor. It’s a bit of a trial by fire on that front, but I’m confident she will work her way through and perform.” On the earnings call late that afternoon, he added, “I have an internal succession plan broadly that I like…an internal candidate I think of the world of,” a confirmation that he’s still championing Pope, whom he and board had long groomed as heir apparent.
Calhoun suggested that Boeing should mend its manufacturing problems relatively fast, and that the key challenge in the years ahead is making the right choice for a next-gen aircraft. “The mistakes that matter are usually in the development of another airplane, not so much the production issues that we face today,” he stated. “When you get development issues wrong, you pay a price and you pay it for a long time.” The implication: Pope’s the potential CEO most likely to pick a clean-sheet aircraft that proves a big hit.
The new chairman, and the board, likely have a different take from Calhoun’s
Sources familiar with the search process, whom Coins2Day interviewed on background, found it highly unusual that an outgoing CEO should recommend a successor. That’s the board’s job. In fact, according to several people knowledgeable about the situation, the directors no longer view Pope the frontrunner. Heading the search isn’t Calhoun, but the new chairman, Steve Mollenkopf, an engineer by training and a manufacturing expert who crafted testing regimens and quality control systems at Qualcomm, and invented 38 patents. The word is that Mollenkopf and other members are pursuing the same track that led them to Gitlin: Tapping an outsider boasting strong industry experience, and especially, hands-on proficiency in clearing the kind of supply chain bottlenecks and scrambled work flow that now afflict output of the highly-popular 737 Max and 787 Dreamliner.
To be sure, Pope’s still in the running. And her stock could rise should she prove her mettle on the shop floors at Renton and Everett. But, my sources say, a formidable contender has emerged onto the short list following Gitlin’s departure. He’s Pat Shanahan, who six months ago took on the immense task of repairing Spirit AeroSystems, Boeing’s biggest supplier as producer of fuselages, as well as other key parts, for the 737 and 787.
Shanahan’s resume checks almost all the boxes that the board needs filled since the cataclysm on January 5—a different set than those that counted just four months ago. Shanahan spent three decades at Boeing. He’s an outsider who was gone during the crisis years, but harbors an intimate familiarity with the intricacies of Boeing’s manufacturing platforms. So he’s an uncommon combination, a newcomer who grew up in the Boeing factory.
Shanahan’s a master at quelling crises in the plants. In 1997, after Boeing bungled the production speedup of the wide body 767, Shanahan served as the fixer, hunkering twelve to fifteen hours a day, seven days a week alongside the assembly line crews, according to a story in the Seattle Times. In 2007 and 2008, he performed a second rescue operation as head of the new Dreamliner project, swooping down on the Everett plant to revamp chaotic construction on the revolutionary aircraft built largely from composite materials, and heavily assembled from outsourced systems delivered from suppliers in a huge departure from Boeing’s traditional template. The Seattle Times piece reports that Shanahan’s dismissive of executives who sequester themselves in their offices, and don’t heed, and take direction, from the folks who do the work.
In both the 767 and 787 cases, planes were moving through the factories from one station to the next missing crucial components, just the practice of “traveled work” that management now strives to erase. As one source familiar with the search says, “Shanahan knows how to build airplanes,” and one might add, ensure that the flying machines get assembled in the right sequence. Shanahan also boasts experience on the defense side; he headed Boeing’s missile systems from 2004 to 2007. His Washington, DC connections are another strength. In 2017, Shanahan left Boeing to serve the Trump Administration, first as under-secretary and then acting Secretary of Defense. Boeing must win the confidence of the FAA and other regulators to lift its production from today’s minimal levels. Shanahan’s political skills and experience dealing with the aerospace authorities could speed a Boeing’s comeback.
Another plus: His deep roots in Seattle. Shanahan grew up attending the local Catholic schools, played soccer in the suburban parks, and graduated from the University of Washington. While her son worked on the 787 project, Shanahan noted proudly to reporters that his mom attended Sunday mass at St. Bridget’s church in the Seattle neighborhood of Laurelhurst. Quipped Shanahan at the time, “The ladies at St. Bridget’s pray for the 787 every Sunday.”
According to my sources, the board now leans towards moving headquarters away from its current location in Arlington, Va., and back to the Seattle area where it makes most of its airplanes and generates the bulk of its revenues. That landmark shift would mark a homecoming for both Boeing and Shanahan. “The new CEO needs to get his butt into an office off the factory floor in Seattle,” says one industry insider. “Part of the job is being there. You can’t just phone it in from South Carolina or Florida.”
Of course, we don’t know if Shanahan will take the job if it’s offered to him. And Boeing could well pick another outsider. Calhoun stated in the CNBC interview that Mollenkopf “will canvas the CEO community” for outstanding candidates. Shanahan turns 62 in June, so his tenure might be shorter than that of a CEO in their 50s. “Boeing could bring him in to stabilize things for a period, then run a thorough and thoughtful succession process,” says one person to whom I spoke. It’s also possible that Shanahan could take Pope’s current position as CEO of Boeing Commercial Airplanes, under another chief executive. Boeing recently announced plans to purchase SpiritAerosystems. Shanahan could well come in-house along with the supplier he now runs, either as CEO or at BCA working the kind of assembly line miracles he’s renowned for.
We’re witnessing perhaps the most important and riveting succession drama of the new millennium. No job requires a rarer blend to talents than running Boeing. We don’t know if Pat Shanahan will be Boeing’s next CEO. Only that he’s got an outstanding resume: No one knows the Boeing’s levers and gears, and how to oil and overhaul them, better than this outsider-insider whose hardened in battles for quality, and knows how to win them.
