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Boeing chief ousted days after announcing 737 MAX production to be grounded

Boeing has ousted its boss six days after the company said it was suspending the production of 737 MAX aircraft following two fatal crashes.

The aerospace giant said Dennis Muilenburg had resigned as chief executive and board director with immediate effect.

Reuters news agency reported that Mr Muilenburg may be eligible for nearly $ 39m in severance. Boeing decline to comment on the figure or whether he would accept it.

Announcing the chief executive’s departure, the company said: “The board of directors decided that a change in leadership was necessary to restore confidence in the company moving forward as it works to repair relationships with regulators, customers, and all other stakeholders.”

It follows a year of intense scrutiny and industrial setbacks triggered by the two crashes, the company said.

Chairman David Calhoun will serve as chief executive and president from 13 January, it added.

Denis Muilenburg resigned as Boeing's chief executive so the company could "restore confidence" in the company after two fatal crashes
Image: Dennis Muilenburg resigned as Boeing’s chief executive so the company could “restore confidence” in the company after two fatal crashes

Last Tuesday, the US aircraft maker announced that it would temporarily halt production of the grounded 737 MAX aircraft in January.

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The decision was widely seen as a humiliating admission that the fleet’s fate lies in the hands of regulators after its own timetable to return the planes to service dragged by months.

The Federal Aviation Administration (FAA) said last week it would not grant clearance for the planes before 2020.

All versions of the 737 MAX were grounded worldwide in March – days after an Ethiopian Airlines plane came down outside Addis Ababa, and five months after a Lion Air flight suffered a similar fate near Indonesia.

A total of 346 people died in the crashes.

Mr Muilenburg has led the company since 2015 but his position has come under increasing pressure following the disasters and in October he was stripped of his role as chairman while remaining as chief executive.

Shares in Boeing rose after the announcement that he was departing.

Part of the wreckage at the scene of the Ethiopian Airlines crash
Image: Part of the wreckage at the scene of the Ethiopian Airlines crash

Boeing has been working with US regulators to ensure the 737 MAX aircraft are safe – with modifications focusing on an anti-stall device called the Manoeuvring Characteristics Augmentation System (MCAS) in the hope of returning the 737 MAX to service.

After announcing the suspension of the aircrafts’ production, the company said it did not expect any job losses “at this time”, leaving the company under pressure to save costs elsewhere as it grapples a growing bill – last put at $ 9bn (£6.8bn).

That sum is expected to rise significantly.

Rescue team members arrange the wreckage, showing part of the logo of Lion Air flight JT610, that crashed into the sea, at Tanjung Priok port in Jakarta, Indonesia, October 29, 2018. REUTERS/Stringer
Image: The Lion Air plane crashed in October 2018 off the coast of Indonesia

Boeing has continued to produce 737 MAX jets at around 42 per month, while also purchasing parts from suppliers at a rate of up to 52 units per month.

Deliveries have been frozen until regulators approve the aircraft to fly commercially again, leaving the company scrambling to find space to store hundreds of planes.

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