There have been no further fatal failures on Calhoun’s watch, thankfully, but Boeing’s flight path seems no less choppy. The infamous Alaska Airlines door-plug incident this January—in which a chunk of a 737 Max fuselage popped off mid-air—has triggered a hailstorm of new revelations about safety flaws and construction problems. Federal regulators have ordered a slowdown in plane production; the Department of Justice is investigating. 

And yesterday, Boeing announced that Calhoun will step down as CEO at the end of the year. (The head of Boeing’s commercial aircraft business is stepping down immediately; the 737 production chief got sacked in February.)

Calhoun could probably feel the sands draining out of his Boeing hourglass well before yesterday: The stock is down 24% this year, and airline CEOs—Boeing’s most important private-sector customers—have voiced growing exasperation. But as Fortune’s Shawn Tully has chronicled in his terrific recent reporting on Boeing, the aircraft-maker’s problems arguably run deeper than anything Calhoun could have fixed—and their roots predate his arrival by decades.

Tully’s thesis—articulated in this deep dive, featured in the next issue of Fortune magazine—is that over the years, Boeing has evolved from an engineering-first company to one that emphasized “capital light” manufacturing. That meant a greater reliance on outside suppliers, and a more intense focus on efficiency and cost-cutting—all of which created incentives to speed up or cut corners on crucial quality checks. 

“Managerial decisions, made over a period that spanned more than 20 years and four CEOs, gradually weakened a once vaunted system of quality control and troubleshooting on the factory floor,” Tully writes, “leaving gaps that have allowed sundry defects to slip through.”

The capital-light strategy looked great for a while: From the close of 2010 through 2018, Boeing’s share price vaulted from $70 to $425, outperforming laggards like Microsoft, Apple, and Alphabet. But the October 2018 737 Max crash was the first indication of systemic problems. The cascade of safety and production issues since then has made it hard for investors, customers, or passengers to regain their trust in Boeing.

As for who will lead Boeing next, for now all eyes are on the company’s new chairman: Steven Mollenkopf, CEO of chipmaker Qualcomm from 2014 to 2021, who will lead the search for Calhoun’s replacement. Mollenkopf has a background as an engineer and a product manager. He also comes from a competitive industry where breakdowns in quality and performance lead to instant irrelevance. Will he put an engineer in the corner office? Given recent events, Boeing and its customers should be rooting for just that. 

Matt Heimer
matt.heimer@fortune.com

TOP NEWS

A $1.3 billion pay package

Broadcom CEO Hock Tan stands to earn $1.3 billion in compensation, putting him among the world's highest-paid CEOs. Part of Tan’s compensation includes a $161 million stock grant; those underlying shares are now worth significantly more thanks to a surge in Broadcom’s share price. The Wall Street Journal

China’s EV market consolidates

Robin Zeng, chairman of world-leading battery maker CATL, expects to see “consolidation” in China’s EV sector as Beijing withdraws support. Zeng says China’s EV market is now more “market-driven,” as local carmakers and Tesla engage in a fierce price war. CATL is the largest battery maker in China, and is competing with Korea’s LG Energy Solutions for the No. 1 position globally. Bloomberg

Florida’s social media ban

Florida Gov. Ron DeSantis signed a law banning those under the age of 14 from having social media accounts. Courts have struck down similar bills elsewhere in the U.S. on constitutional grounds; proponents of the Florida bill argue that their legislation, which targets features like push notifications rather than content, is more likely to stand up to scrutiny. The Associated Press

AROUND THE WATERCOOLER

Portuguese workers are increasingly holding down multiple jobs or leaving the country altogether as digital nomad pile-on adds to cost-of-living pressures by Ryan Hogg

United Airlines loses $600 million in market cap on news that FAA is opening a probe after airline’s 10th safety flub in just 2 weeks by Sasha Rogelberg

Beijing reportedly doesn’t want Intel, AMD or Microsoft on its government computers as its drive for tech self-sufficiency picks up by Lionel Lim

Nearly half of all investors expect a ‘no landing’ scenario for the economy where inflation remains but there’s no recession, Deutsche Bank survey shows by Will Daniel

NYC vacancy rates are so low—and affordable housing is so sparse—that a super PAC has formed to elect politicians to build more homes by Sydney Lake

Commentary: ‘If you don’t disclose, you won’t get the support of international capital’: The backlash against the SEC’s new mandate is a mistake as China closes the gap on climate disclosures by Edmund Downie, Erica Downs and Yushan Lou

This edition of CEO Daily was curated by Nicholas Gordon.