ercial Airplanes (BCA) president and CEO Scott Carson has announced he will retire from Boeing at the close of 2009, but will be succeeded as head of Boeing's commercial unit effective tomorrow by current Integrated Defense Systems (IDS) president and CEO Jim Albaugh.Dennis Muilenburg will succeed Albaugh as president and CEO of Boeing Integrated Defense Systems.
The change in leadership comes just days after Boeing firmed up plans to fly its oft-delayed 787 Dreamliner by the close of 2009 after accumulating more than two years worth of delays.
UPDATE 5:45 PM: Flight's story is now up. CEO Jim McNerney says the succession planning let Boeing to consider both internal and external candidates for the BCA CEO role. McNerney cited Albaugh's experience being able to provide "technical oversight at BCA", a reference to his background as an engineer. Carson's background was rooted on the business operations side of Boeing, not its engineering side. McNerney says Albaugh has a "working knowledge" of the 787 program. He also added that Albaugh "is the best person in Boeing at this time" for his new role, an important caveat that does not discount the future leadership potential of executives Pat Shanahan and Ray Conner who were both believed to be front runners for the BCA chief position in the event Carson retired.
Additional updates and full internal statements of both Carson and Albaugh are available below the fold.
Statement of incoming BCA President and CEO Jim Albaugh to the employees of The Boeing Company:
Earlier today, Scott Carson announced his retirement from Boeing after 38 years of service. I've had the pleasure of working with Scott over the past 12 years and know firsthand his dedication and commitment to Boeing and the aerospace industry. He has made many contributions to the company over the past four decades and I am honored to follow in his footsteps as the new leader of Boeing Commercial Airplanes.Growing up in eastern Washington, I remember watching the contrails from 707s and B-52s flying overhead. As I grew older, I recognized the great significance of these aircraft. To this day, I believe Boeing did more to change the 20th century than any other company on Earth. Over the past 90 years, the men and women of this company have changed the way people travel and experience the world, the way we communicate, the way we protect freedom and democracy, and the way we look at our universe.
And much of this was done in Puget Sound. From the 707, which marshaled in the commercial aviation jet age; to the revolutionary 747 with its signature upper deck; to the increased fuel efficiency of the 757 and greater flexibility of the 767; to the 737, the world leader in single-aisle passenger transportation and the all digital airplane, the 777, Boeing has led the way in commercial aviation.
It was also here in Puget Sound where commercial derivative military aircraft were born - a product line reaching back in history and one that will take us far into the future. From the 707 came the KC-135 Stratotanker and Stratolifter; the E-3 AWACS; E-6 Mercury for the U.S. Navy and the E-8 JSTARS. From the Boeing 737 come the T-43, AEW&C, the P-8 Poseidon and the P-I for India. The 747 became today's Air Force One, the E-4B National Airborne Operations Center and the Airborne Laser. The 767 became tankers for Italy and Japan and also the Japanese AWACS.
Boeing is truly an iconic company and I believe we have the opportunity to change the 21st century just as we have changed the last one. The 787 is the starting point.
In its soul, Boeing has always been and remains an engineering company. As an engineer I look forward to learning from and working with you. The heart of this company is the skilled machinists, technicians and mechanics - true craftsmen and wizards - who deliver on their promises everyday. I look forward to understanding what you believe can be done to make the company even better still.
Being part of the world's most capable and largest aerospace company is a privilege. Working with the world's premier commercial airplane company team as we prepare to fly two revolutionary airplanes - the 787 and 747-8 - is an opportunity of a lifetime.
Greatness, though, does not come easily. It is not an entitlement. It must be proven time and time again each and every day. We work on some of the most complex and challenging systems in the world. With challenges oftentimes are issues. And today we are facing significant issues on our two major development programs. It is imperative that we face into these challenges and deliver to our customers. Going forward I believe we have three imperatives: flawless execution, profitable growth and improved efficiency. It will take the personal commitment and leadership of all of us to achieve these goals.
We have much to accomplish. I know we have the right team in place. Over the next several months, I look forward to meeting you and learning from each of you. Together there is nothing we can't do...JIM
UPDATE 4:43 PM: Statement of BCA President and CEO Scott Carson to the employees of The Boeing Company:
An Incredible Journey4:37 PM: Boeing will be holding a conference call at 5:15 ET with CEO Jim McNerney that will be covered here and on twitter as it happens.. In recent weeks Carson's retirement has been widely rumored and today announcement confirms his decision to leave Boeing after nearly 41 years. Carson began at Boeing in the B-1 program in 1973 as a financial analyst and moved to management in 1976.Today I am announcing my retirement from Boeing, effective at the end of the year. For me this is the end of a journey that began nearly 41 years ago when I joined Boeing for the first time. It has been an incredible journey. I have seen many changes but the constant throughout has been the amazing people of Boeing who believe so deeply in what we do, and are so proud of the products and services we provide our customers.
My decision is tied to many factors, but perhaps the most important reason for me was resetting the schedule on the 787. With this baseline in place the new leader will have a clear path forward. Tomorrow Jim Albaugh will assume the reins here at Commercial Airplanes. I have worked with Jim over the past 12 years and know him to be a strong and focused leader. Between now and the end of the year, I will help Jim as needed in the transition and assist on special projects for the company.
It has been my honor and privilege to work with each and every one of you over the past three years in my present capacity, and before that in the Sales organization. Throughout my career I have treasured the rewarding experience of working with and serving our customers around the world. It has been one of the great highlights of my years with Boeing, and one that I will always remember.
Despite the current challenges facing our global economy and the industry, I remain confident in the future. I also know that you will give Jim the same outstanding support and world-class effort that you have demonstrated to me over the past three years. I wish you every success and thank you from the bottom of my heart for the journey we have taken together.
Sincerely,
Scott Carson
on August 31, 2009 4:20 PM | Reply
This seems like the appropriate time to make some changes at the helm and Scott Carson is ready for retirement as well as replacement.
His successor is a competent individual and is qualified to see the 787 program through to delivery as well as to take control of BCA.
Between the announcement of the revised schedule and this change of the guard, Boeing is coming to grips with its issues and trying to do whatever it can to redirect the Company in a constructive way.
on August 31, 2009 4:35 PM | Reply
So, math and engineering education. That will be a good change.
Somehow Jim A got through the 767 tanker problem that brought down a whole lot of folk.
on August 31, 2009 4:36 PM | Reply
i think this should be seen as a positive development and one that will give Boeing a chance to reassert its strengths and control following a series of mismanaged efforts.
Jim Albaugh has the experience and engineering skills necessary to make the changes necessary to move faltering programs foward.
He will also be extremely competent to handle the Tanker bid and issues with the introduction of a New Tanker submission based on a larger model than the 767.
on August 31, 2009 5:12 PM | Reply
Washington! Engineer! Portends good things for a whole lot of folk.
on August 31, 2009 5:27 PM | Reply
Carson is 63. The mandatory retirement age for Boeing CEOs is 65, so he is leaving two years early. Did he jump or was he shoved? Let the chattering commence.
on August 31, 2009 5:32 PM | Reply
Yes, it is an engineering company - somewhere between primary manufacturer and primary integrator. Interesting development this - nice piece there by Mr Jim Albaugh, get the people behind you.
on August 31, 2009 5:40 PM | Reply
Albaugh's statement reasserts that engineering is the soul of the Company and his presence will bring that dicipline to the front line.He pays respects to the machinists, technicians and mechanics and will be more open to criticism and suggestions coming from the bottom up.
If his words hold true, we have the right man for the job
on August 31, 2009 5:55 PM | Reply
Heads rolling, finally? Trouble is, they need to go higher up. Jeez, where's someone like T Wilson when you need him. Also, I really question the actions of the Board members. How do they think they are qualified to advise Boeing on aircraft design and manufacturing?
Also, wasn't Carson the guy who said that he would just as soon be rid of all unions at Boeing? I hope the IAM doesn't take this as tacit permission to get even more obstinate and nonproductive. They've already pretty much soiled the place they work in.
on August 31, 2009 6:20 PM | Reply
@bruce: What makes you think the Board of Bystanders feel they are qualified to make aircraft decisions? Their job is to make sure the right people are in place to make those decisions. The Boeing Company CEO Jim McNerney works at their discretion.
on August 31, 2009 7:03 PM | Reply
If their job is to make sure the right people are in place to make those decisions, what makes them think they are qualified to pick qualified people to make those decisions? Generally, they seem to know nothing about the aircraft industry and what qualifications are required to ensure a successful program and product, not just beancounting.
on August 31, 2009 7:26 PM | Reply
Amen, an engineer! Congradulations Jim! Now all Boeing has to do is get back to aeronautical engineering first principles! First conceive the design, engineer it, build it, test it, then keep modifying and testing the design till you have all get all the Murphy’s out. It’s only after you have all the Murphy’s worked out that you can put the design into production. You also must always keep USAF flight surgeon John Paul Stapp’s Ironic Paradox in mind as you go through the process. Which is:
"The universal aptitude for ineptitude makes any human accomplishment an incredible miracle."
Good Luck Jim!
on August 31, 2009 8:13 PM | Reply
Finally a good news for Boeing.
Hopefully the next one will be the announcement of sabbatical leave of McNerney.
I hope they find suitable replacement for both soon.
on August 31, 2009 9:20 PM | Reply
It takes an engineer to manage a 'nuts and bolts' outfit, not finance wizards on a hunt for pots of gold at the end of rainbows. If Jim A is able to focus on straight tech talk, internally and externally, it will be the differentiator from the competition.
Excellent product utility, reliability, and service will sell itself. There will always remain a segmented market for Hyundai's (Brand X), and another segmented differentiated market for Lexus' (Boeing).
on August 31, 2009 11:14 PM | Reply
Is no one else a bit skeptical about the timing of these changes? I think more bad news is on the horizon and seeing the same man deliver it would harm Boeing too much.
on August 31, 2009 11:59 PM | Reply
All the comments on the need for an engineer to run Boeing is a bit short sighted in my opinion. An engineer might understand the aircraft from the perspective of construction and flight characteristics and that is all well and good, but what Boeing really needs is a strong Project Manager. A good project manager for an aircraft company doesn't necessarily need to be an engineer. They should be a good communicator and smart enough to surround themselves with knowledgable people. The steps to successfully managing a project are remarkably similar regardless of what the end product of the project actually is.
Whether Jim Albaugh has project management abilities necessary is to be determined, though I'm sure he does coming from the IDS division. The point I am making is that to say the head of a division at an aerospace company must be an engineer can be indicative of a fallacy of logic.
on September 1, 2009 12:55 AM | Reply
A very welcome moment for many of us. Carson has been a disaster for the company and a morale buster for those within.
After squandering vast corporate resources and precious time mismanaging the 787 (all on his watch), He became "Looter in chief" robbing the hard working line managers long earned benefits and destroying the morale of those he expected to do what he and his partner in crime (McNerney) could not..."Execute the plan". It was a pathetic attempt to replenish the bank.
Loyalty and dedication is a two way street. They should trade both Carson and McNerney to Ford for Mullaly. Oh yea, Ford wants to stay in business...
Boeing clearly made the wrong choice 3 years ago and they have made only one half of the correction. It is time to make the other half now. Bye bye Jim....
on September 1, 2009 1:29 AM | Reply
@Sam,
I think that just might be the issue. Perhaps Boeing actually finally feels that they have things under control and that would be the perfect time for a (partial?) changing of the guard. The only thing that does not fit is that, if this theory were true, one would expect Albaugh to be the one to announce the latest revision of the schedule. Unless this latest revision of the schedule is also going to slip?!
Question is, as others have stated, is there another change/are there more changes going to be coming in the next couple of months?
on September 1, 2009 3:32 AM | Reply
Engineer or salesman? You want both. Scott Carson got Boeing selling aircraft again at a point at a point when it struggled to move anything. Things may seem grim now with the 787 delays, but they were much worse a few years ago when Boeing appeared to be at risk of exiting the commercial aircraft business entirely. Now, few people talk in these terms.
Carson couldn't grasp control of the 787 project. But the damage was already done by the decision at the start to go for an ambitious design implemented on an accelerated schedule by inexperienced people. There was not much he could do about that. But what he could do and did do was sell the plane by the hundred, to allow for an eventual success, in spite of all the problems getting it launched.
on September 1, 2009 4:52 AM | Reply
When you want to extract cash from unsuspecting shareholders you have to:
1. build a good "business case"
2. plan a justification for possible cost overrun
3. prepare a herd of black sheep in advance, preferably those who are close from retirement or unwanted people
http://verovenia.wordpress.com/2009/02/06/yummy-chicken-soup/
on September 1, 2009 5:50 AM | Reply
Good to have an engineer in charge again at this critical time for the B787 programme.
However, I note that in Jim Albaugh's statement he says that "From the 707 came the KC-135 Stratotanker". I had thought that the B707 came after the narrower fuselage KC-135, hence a European line that Boeing was subsidised into the civil aircraft business by large US military orders.
on September 1, 2009 8:09 AM | Reply
The question about the timing of the Schedule announcement followed by th announcement of Scott Carson's retirement does raise some interesting questions as to why they occurred in that order.
Whether Albaugh should have been the one to announce his schedule may be legitimate but also may be incidental. If the wing fix is localized and clearly repairable, there is one path to take and that has already been established. It was not Albaugh's decision but one that preceded his selection.
It is clear that there was alot of antagonism over the way Carson handled issues and it seems as if an engineering sensibility is needed at this point. Pat Shannahan was the engineer on duty here as program head, but maybe he clashed with Carson and , all things considered, a change was necessary.
I hope this is more than a minor shakeup but a realization as to what is necessary and they believe Albaugh can truly deliver. I also think he can play an important role in the decision over the Tanker in that he knows the military and will be able to bridge the two worlds of the BCA and the Tanker bidding process.
Lastly, it may have been that Boeing did not wish to "dismiss" Carson, so this was a kinder and more inclusive way of making the change...allowing him to elect retirement and not appear as if he was pushed out. He did serve Boeing for 38 years, many of which were successful, so it was a easier way to allow him to end his career.
on September 1, 2009 8:39 AM | Reply
Let's hope Jim Albaugh has a better understanding of engineering and programme management than he has of Boeing history
"From the 707 came the KC-135 Stratotanker and Stratolifter"
on September 1, 2009 9:31 AM | Reply
@ Scoreboard
His statement is accurate. The KC-135 and the C-135 both came from the 707, true they are a bit different, but they use many many of the same parts, were built on the same assembly line, by the same people with the same suppliers. No, they aren't 707s exactly, but they did come from the 707 as the starting point. If you were to put a 707 side by side with a KC-135 only an airplane nut would be able to tell the difference.
on September 1, 2009 11:21 AM | Reply
The 707 was an outgrowth of the Boeing Model 367-80. The "Dash 80" took less than two years from project launch in 1952 to rollout on May 14, 1954 and first flight on July 15,1954. This was powered by the Pratt & Whitney JT3C engine, which was the civilian version of the J57 used on many military aircraft of the day, including the F-100 fighter and the B-52 bomber.
The prototype was conceived as a proof of concept aircraft for both military and civilian use: the United States Air Force was the first customer for the design, using it as the KC-135 Stratotanker midair refueling platform. It was far from certain that the passenger 707 would be profitable. At the time, Boeing was making nearly all of its money from military contracts: its last passenger transport, the Boeing 377 Stratocruiser, had netted the company a $15 million loss before it was purchased by the Air Force as the KC-97 Stratotanker.[5]
The 132-inch (3.35 m) fuselage of the Dash 80 was only wide enough to fit two-plus-two seating (in the manner of the Stratocruiser). Answering customers demands and under Douglas competition, Boeing soon realized that this would not provide a viable payload, so decided to widen the fuselage to 144 in (3.66 m), the same as the KC-135 Stratotanker, which would allow six-abreast seating — and the shared use of the KC-135's tooling.[6] However, Douglas had launched its DC-8 with a fuselage width of 147 in (3,730 mm). The airlines liked the extra space, and so Boeing was obliged to increase the 707's cabin width again, this time to 148 in (3.76 m).[7] This meant that little of the tooling that was made for the Dash 80 was usable for the 707. The extra cost meant the 707 did not become profitable until some years after it would have if these modifications had not been necessary.
on September 1, 2009 1:15 PM | Reply
@ J.Hancock
It's ironic, but 90% of all proffesional engineers end up doing project managment.
on September 1, 2009 2:43 PM | Reply
@alloycowboy
That is very true, but my point was more toward the seemingly expressed belief that only an engineer could manage the 787 project. As an example, I have a BA in communication (minor in math) and a MA in Rhetoric, but I am a PM for a broadcast media IT company and I feel I could leverage my PM skills to the aircraft industry. So in short all I was trying to say was engineer != great manufacturing project manager.
on September 1, 2009 2:53 PM | Reply
...just not great spellers...
on September 1, 2009 3:32 PM | Reply
@J.Hankock.....
Anything is possible, but I have found over the years that best Aeronautical Engineers can see the entire design of the airplane in their head. They have an intuitive sense of how every system should operate on board the aircraft. Probably the best of all time is Kelly Johnson. You can check out his wiki….
http://en.wikipedia.org/wiki/Clarence_Johnson
on September 1, 2009 3:38 PM | Reply
I am an engineer, so don't get me wrong. I think having an engineer as a leader is a good. thing.
That said, I don't see how Albaugh will make anything better. He leaves a horrible record at IDS. Two (TWO) failed tanker bids, huge cost over-runs. No truely new product in years. He's just not going to change anything for the better.
Carson wasn't great, but things were set for failure before he took over. Carson was just the scapegoat for Mulally's mess. He was the BCA CEO when all the 787 decisions and contract were made. (Mulally was an engineer, just saying.) Mulally created the mess though Carson will get the blame. Albaugh will get the credit for fixing it though Carson did most of the work to get the program back on track.
on September 1, 2009 3:39 PM | Reply
I am amazed at the expected roll of the Board of Directors and the CEO by contributors to this blog. There is an obvious lack of understanding of management concepts and rolls in an organization. These people are not the hands on a project. The hands on people are the engineers in the design/development, the manufacturing experts in production, etc. If you don't delegate, get the right people and trust who you have, you accomplish nothing. As a matter of fact, the Boeing Co. is doing quite well as a corporation. Their free cash flow is extraordinary and their backlog is years in length. Both IDS and BCAG divisions are making good earnings. Is the 787 a problem, yes. Is it a costly problem, yes. Will it make a profit, yes. As John L mentioned above it took years for the 707 to become profitable and a lack of foresight by management could have been sited. Thankfully, brighter minds prevailed and Bill Allen and Clair Egtvedt continued to be storied leaders of Boeing. Big Picture: Boeing is doing fine. Several on this blog need a Valium.
on September 1, 2009 4:03 PM | Reply
John Loenguard has it right: Both the C-135 and the 707 were derived from the Model 367-80.
The military versions of the 707 are the C-137, plus the C-18 ARIA, the E-3 AWACS, the E-6 Mercury, and the E-8 JSTARS
on September 1, 2009 4:26 PM | Reply
@alloycowboy
I am very familiar with the history and accomplishments of Lockheed's Skunk Works and of Boeing as well. Aeronautics is my true passion, IT is just where I ended up.
I don't doubt an aeronautical engineer can see a design in their head, but how many of those engineers have trouble communicating how to achieve those designs? The company I work for now certainly has some phenominal SQL designers, but it comes down to having a good PM to direct the designers to meet the company's and customer's needs.
I hope this move is the best for Boeing, but from my perspective the desire to see only an engineer in these kinds of roles can be difficult to see. Ignoring PM skills and all they bring regardless of educational background can lead to just as many problems as letting an accountant "build" an aircraft.
on September 1, 2009 4:46 PM | Reply
Carson did sort out the sales department. I believe his team where more free on pricing policy - at least that's what was said in the media. They made the argument for that and did okay. Carson's people sold a whole lot of stuff - but it did help to have awesome new products like the 777-300ER and 787. Carson sold 100 747-8's and several 767's. Clearly, these products have potential - okay, the 747 more than the 767 now. At his retirement, more Boeing lines are contributing* to the bottom line than was the case in 2002. (*or will)
on September 2, 2009 5:08 AM | Reply
Jon:
Blog-related issue. That dang "Apture" for the image up there expands, and then it covers up part of the text of your blog entry. Honestly, I don't see much, if any, benefit in the Apture thing you use.
on September 2, 2009 6:24 AM | Reply
from http://en.wikipedia.org/wiki/Clarence_Johnson#Kelly_Johnson.27s_14_Rules_of_Management :
Johnson's famed 'down-to-brass-tacks' management style was summed up by his motto, "Be quick, be quiet, and be on time." He ran Skunk Works by the Kelly's 14 Rules:
1.
The Skunk Works manager must be delegated practically complete control of his program in all aspects. He should report to a division president or higher.
2.
Strong but small project offices must be provided both by the military and industry.
3.
The number of people having any connection with the project must be restricted in an almost vicious manner. Use a small number of good people (10% to 25% compared to the so-called normal systems).
4.
A very simple drawing and drawing release system with great flexibility for making changes must be provided.
5.
There must be a minimum number of reports required, but important work must be recorded thoroughly.
6.
There must be a monthly cost review covering not only what has been spent and committed but also projected costs to the conclusion of the program. Don't have the books 90 days late, and don't surprise the customer with sudden overruns.
7.
The contractor must be delegated and must assume more than normal responsibility to get good vendor bids for subcontract on the project. Commercial bid procedures are very often better than military ones.
8.
The inspection system as currently used by the Skunk Works, which has been approved by both the Air Force and Navy, meets the intent of existing military requirements and should be used on new projects. Push more basic inspection responsibility back to subcontractors and vendors. Don't duplicate so much inspection.
9.
The contractor must be delegated the authority to test his final product in flight. He can and must test it in the initial stages. If he doesn't, he rapidly loses his competency to design other vehicles.
10.
The specifications applying to the hardware must be agreed to well in advance of contracting. The Skunk Works practice of having a specification section stating clearly which important military specification items will not knowingly be complied with and reasons therefore is highly recommended.
11.
Funding a program must be timely so that the contractor doesn't have to keep running to the bank to support government projects.
12.
There must be mutual trust between the military project organization and the contractor with very close cooperation and liaison on a day-to-day basis. This cuts down misunderstanding and correspondence to an absolute minimum.
13.
Access by outsiders to the project and its personnel must be strictly controlled by appropriate security measures.
14.
Because only a few people will be used in engineering and most other areas, ways must be provided to reward good performance by pay not based on the number of personnel supervised.
Note that Kelly had a 15th rule that he passed on by word of mouth. According to the book "Skunk Works" the 15th rule is:
15.
"Starve before doing business with the damned Navy. They don't know what the hell they want and will drive you up a wall before they break either your heart or a more exposed part of your anatomy."
"Manual for Complete Idiot", it's all there ;-)
But it certainly makes a difference if you start a program
under these rules or inherit "something" that has already
been thoroughly run aground.
See the book "The Mythical Man Month"
http://en.wikipedia.org/wiki/The_Mythical_Man-Month
which originated in software developement but these days
applies to "hardware" ( which is to an astonishingly high
percentage software) as well.
uwe
on September 2, 2009 9:46 AM | Reply
I wonder how this will change the 787 program, including development of the 787-10 going forward.....
on September 10, 2009 3:27 PM | Reply
HOW COME NO ONE MENTIONED THE $1 BILLION ALBAUGH LOST ON THE INTERNET PROGRAM . . . "CONNECION"?
PRAGMATIC JIM