Boeing names independent adviser as shares dive 8% By Reuters

By Joanna Plucinska and Valerie Insinna

WASHINGTON/LONDON (Reuters) -Boeing on Tuesday named a retired U.S. Navy admiral to advise the planemaker’s CEO on improving quality control after 737 MAX 9 planes were grounded following the mid-air cabin panel blowout on an Alaska Airlines jet.

Kirkland H. Donald will serve as a special adviser to Boeing (NYSE:) CEO Dave Calhoun, Boeing said as 171 MAX 9 jets were grounded for an 11th day as Boeing’s shares sank more than 8%.

Boeing’s production processes have been under scrutiny since a panel tore off the Alaska Airlines jet in mid-air this month, leaving a hole on the side of the plane. The incident rekindled worries about Boeing’s jets a few years after a pair of crashes killed nearly 350 people. Investors are also worried about potential delays to aircraft deliveries.

Donald will lead a team of outside experts in evaluating quality practices at Boeing Commercial Airplanes and its supply chain and provide recommendations to Calhoun and Boeing’s board of directors.

Ryanair Chief Executive Michael O’Leary on Tuesday called for a revamp of Boeing’s management, though he said senior leaders should stay at the company.

“We need somebody in Seattle cracking heads, ensuring quality, making sure that aircraft are rolling off the production line on the day they’re supposed to roll off the production line,” he told Reuters.

O’Leary, whose airline is one of Boeing’s largest customers with hundreds of MAX aircraft on order, told a news conference that Boeing CEO Dave Calhoun and its chief financial officer had his “full confidence and support.”

But he later told Reuters that Boeing needed more hands-on management at its production hub in Seattle to improve quality control and oversight through the manufacturing process.

O’Leary said the head of Boeing Commercial Airplanes, Stan Deal, was mostly a “sales guy” and Boeing needed leadership present at its Seattle-area production facility every day.

“When Stan is traveling – and he does a lot of traveling – who is minding the shop in Seattle?” O’Leary said.

Boeing referred to a letter to employees written by Deal on Monday, where he laid out additional steps the company would take to improve quality assurance, including additional 737 inspections at Boeing facilities in the Seattle region and at supplier Spirit AeroSystems (NYSE:) in Wichita, Kansas.

The company will also open its facilities to allow airlines to inspect 737s and review quality procedures.

“Since 2019, we have increased the number of Commercial Airplanes quality inspectors by 20% and we plan to make more investments in the Quality function,” Deal said.

Spirit AeroSystems CEO Patrick Shanahan said in a letter to employees on Tuesday that the company will also put in additional inspections at its 737 fuselage production line that replicate what airlines will do to return the MAX 9 to service.

A spokesman for Spirit AeroSystems said the letter was intended for Spirit’s workforce and declined further comment.

Analysts have said ongoing MAX 9 investigations could ratchet up the pressure for management changes among Boeing’s top executives.

“We would not be surprised to see regulators, investors and customers push for a turnover in the ranks of senior management and the Board of Directors,” Bank of America’s Ron Epstein said in a Tuesday morning note to investors.

But O’Leary said there was no one to replace Calhoun in the short term and current senior management should remain for 12 to 18 months to deliver on safety and quality.

“I’m not calling for anybody’s resignation,” he said.