This exchange came this morning at Boeing's Third Quarter 2009 earnings conference call:
Jon Ostrower:
Good morning. Questions for you about how we come back to hearing different things about [787 program] schedules, whether it is from on-line news media, or the financial community, and you then get these very confident declarations from you guys about the status of the program. Are you guys willing to stake your leadership on this? I'm trying to get a sense of where the buck stops after six delays here.
Jim McNerney:
Listen, we're all responding, I assume you're talking about the 787 program?
JO:
Yes, I am.
JM:
And the entire leadership of the Company plays a role in -- in getting this program done and out to our customers. It has been a difficult program. It has been technologically innovative, new to the world, in its characteristics, and we all wish that the program had gone more smoothly, and I think we all share responsibility in it not going as smoothly as we want but we're also going to share responsibility in its ultimate success when we get there. So we're a team going after this thing.
JO:
Thank you.






on October 21, 2009 3:08 PM | Reply
JO - you realize with that question that will be the first and last question you get to ask of Boeing in such a forum.
DEL
on October 21, 2009 3:15 PM | Reply
">>>>but we're also going to share responsibility in its ultimate success when we get there."
Many would argue that the actual definition of "success" is "on-time and on-budget". In which case, McNerney et al have already failed and thus, do not deserve to accept ANY credit for such delayed certification and delivery of the product.
on October 21, 2009 3:20 PM | Reply
Well, well, well, You are moving up in the world! Congrats on getting on the radar! Wow, an opportunity to ask the big man a question.
"DEL" has a good point, It will most likely be your last...
Keep up the good work!
on October 21, 2009 3:37 PM | Reply
You got a general answer. I sincerely hope the investment banking giant you tweeted the other day on further shocks to the program(me) is wrong. Unfortunately, that downgrade on expectations came soon after Randy Tinseth, Boeing Marketing VP, had to address further rumours, speculations in a blog titled rumours recently. Anyway, the speculation in itself is quite boring, annoying. My brain is on autopilot till I see one of these new birds on the back page of the business daily - the international section.
on October 21, 2009 3:52 PM | Reply
If I was going to ruffle feathers, I would've asked if he personally believed that it was ethical to mislead or deliberately withold salient information from clients, investors, and 65,000 BCA employees, for the sake of stabilizing the stock price in the short term.
What would you guys have asked?
on October 21, 2009 5:55 PM | Reply
Too bad this wasn't Jon's first question fielded on a Boeing conference call... and it won't be his last.
Jon, it's too bad that they "couldn't hear you" when you first asked, I heard you loud and clear. I thought the way you put it initially was a better question.
on October 21, 2009 6:19 PM | Reply
Jon,
Good question but not the 'right' forum. These guys are doing 'the best they can' and there's lots of uncertainty so 'puting your badge on the line' is both foolhearty and stupid. However, there's a real question that needs a real answer: If most of the predictive models/tools are yielding such bad results in the real world and the execution plans have nearly zero integrity/viability based on demonstrated performance when does the company fess' up to the fact that NO ONE really knows what's going on and that the first flight and first delivery schedule is a set of wild ass guesses until the fix is tested on the Static Bird and it passes Limit and Ultimate load. EOM, EOY, End of the Decade are all the same until that happens. They are all WAGs and likely worthless.
on October 21, 2009 6:31 PM | Reply
Thousands of shareholders want the answer to that question, sir, so thanks for asking. I'd love to be a fly in the boardroom as they mull over whose head is going to roll. A uselessly symbolic gesture to both shareholders and employees because Boeing's problems really have a systemic feel to them.
on October 21, 2009 6:39 PM | Reply
Interesting responses to Jon's question, phrased as it was using the vernacular of the young. Too bad that we couldn't see Jim M's face. Was he beet red and about to explode? You see, those in that game of talk-talk have certain rules; one wouldn't expect that the blogging world would fall into line. Now, that in itself will be something to watch further here.
Jerry's comment is right in several ways. However, where has it been shown that predictive (read, too, parametric - old Pat sure got out of the way quickly) models can overrule human expertise, except in specialized situations? Ah, if only. By the way, Dassault's assault on the intelligence ought to be scrutinized, too; yes, the computer can control the whole witless process ad infinitum. No problem, believe us, they said.
This plane program was driven from the beginning by a 'game' and 'computer' fluent generation whose grasp of reality ought to have been suspect; ah, yes, those who raised any flags were shown the door. Also, it was more fun, and easier, to believe in the illusion, called computer-enhanced process, etc., and the whole wish that things you can't handle could very well be by outsiders.
I don't know that Jim M or the new guy (from defense) really understand how silly this all looks. One suggestion would be for Boeing to get back to the engineering (yes, nerdism - wait, can Jim M play that role? -- pocket liner, etc.) mindset which would be of the instuctional variety that the world sorely needs, including those elsewhere than the US who picked up their engineering training over here (did you thank us? -- well, lets say the US and Northern Europe).
Spin may be what a helicopter rotor does for lift, yet it does not flatter Boeing to use such to try to flim-flam the world.
on October 21, 2009 6:39 PM | Reply
Good question Jon....he never answered the question....it figures.
on October 21, 2009 7:00 PM | Reply
Companies ought to respect their people who know, that is, the technical folks. Boeing seems to have gone the other way; but, if it were not so, they wouldn't be in the current situation. Oh yes, keeping Wichita would have been a good thing to do, to boot.
So, lets look at Boeing as an example of a very bad type of systemic problem. You have management, Jim M as the epitome. They are the only ones who can speak; anyone else is highly constrained. But, the managers speak spin; the techies need to be controlled since they could spill too many beans.
Then, you have a highly technical situation that is laden with hypotheses, both product and process, that requires teaming of an ultimate sort between the techies and management; what did management do? Farm out the stuff that their own technical people ought to have been handling.
Part of this was pure 'dissing' (yep, think back to Harry the idiot who wrecked MDC, then Condit [sheesh, guy, you from Berkeley - oh, aren't all those people geniuses?] let Harry bring his insidious ways into what was a magnificent company - still can be) of techie people because management hated the unions. We could go on about this for a lot longer (but, lets not now).
So, one would expect that technical folks would be allowed to talk to us. Oh yes, that guy who talked earlier, at UWash, was management. I mean, a real technical guy, like a Technical Fellow.
TF, what is that? It's a program that some feel is a dual ladder. You know, managers go up rungs, until they are past their effective point (test- name the law). Well, where technical stuff has to happen, there needs to be another set of rungs. Then, all along the chain, you would have the manager (spin doctors, by necessity, they can't do anything else) and the tech fellow (who knows the science and the engineering - and, if he/she does not know, be assured that they can learn quickly). In fact, the wise thing would be to have joint decision making, except management cannot allow that (it's about turf, people, and cojones - Jim M, please grow up; you were supposed to enhance ethics - from the outside it don't look to be the case that you've succeeded).
Okay, managers, think of ascension on the techie ladder as being indicative of being able to solve problems, resolve teaming issues (real types of solutions, not those baby-sitting types that managers do -- by the way, people, look at Wall Street and all those on the golden teats - do they look like mature humans that we ought to idolize and copy?), help coordinate the technical interchange between ontological, and operational, views that are necessary for any real-world accomplishment. ETC.
What managers do is threaten and such. I've only seen a few lead by example. Guess what? They are all outside of Boeing now.
Jim M - you ought to bring back some of the oldies to tell you how it was and could have been. That would be a beginning.
on October 21, 2009 7:23 PM | Reply
All the earlier was to set the stage to respond to the Jerry comment about models. Ah, if only they were as good as the 'true believers' wished.
Boeing said that it wanted 'general' engineers which raises the flag for anyone who has gone through engineering training. But, the modern age with its computational prowess, and the gaming-fluent ontology of visualization, can make anyone an engineer. Oh, you don't think that is what managers believe?
The idea is that with the computational support, you enhance sufficiently to cover whatever is the necessity, meaning fill in for, or cover up, for lack of knowledge and expertise.
We can't just blame Boeing, though. The whole culture has veered away from the notion of the expert, except for medicine, perhaps,- yes, there you have many grabbing for riches without any clue, it seems, for the long tradition founded upon the counsel of Hippocrates.
Yes, in this case, someone, or a team, could step up and understand the whole thing. In fact, Boeing, you would probably push back the state of the art if you started to re-awaken that type of thinking. Forget the virtual (and its banal replication, supposedly, of the real) as the focus -- okay, you do need a sole source for design, etc, but that is vastly different from the beliefs about other uses for what is essentially a tool. Yes, these models are only to support, not replace, some human-based brain work.
Man-in-the-loop is one metaphor to use. Think borg, even, to get the young people excited.
By the way, twits, twitter is not essential, in this sense. In fact, that whole bit of escapism (meaning, attention put to some locus other than the space/time locus of your little physical being) spawned by the web and the ubiquity of 'apps' actually degrades from any attempt at building human expertise.
Oh, 'not essential' does not imply,in any way, not of some effective use. Challenge. Show how to use twitter to effect a new proof for a theorem. Oh, wait, the apps for that doesn't exist yet, or does it?
on October 21, 2009 8:55 PM | Reply
His answer to the question basically said"It wont be my fault if it still aint working. Its a team thing"
Even in football they change the captain if things are bad, and they are bad.
on October 21, 2009 9:39 PM | Reply
What is really scaring me right now is the 105% number that Jon heard for the wing delamination problem. I sure hope some one got their numbers wrong because a number like could have management jumping out windows with a little help.
on October 21, 2009 11:20 PM | Reply
Loved your question. Put him right on the spot :-) Boeing senior leadership is paying for this one and as a result, the shareholders, customers, and employees suffer. There is no doubt if Boeing had the authority over the design and engineering of this airplane, it'd be in the air and customers would be enjoying it right now.
Building the most integrated plane in history, with the most fragmented design team in history.
Outsourcing.... great idea Chicago!
on October 22, 2009 1:15 AM | Reply
I was disappointed to here Jim M use the old line "we're all in this together." That is always the refrain from overly paid executives when times are bad.
The reality is he's an executive who is paid top dollar to perform. According to the proxy, he has made about a cool $60 million over the last three years. Something tells me he won't to be too keen to share all that loot with the rank-and-file when the company finally gets to clear blue skies again.
on October 22, 2009 1:31 AM | Reply
It's heartbreaking that an iconic American company with a proud tradition of excellence is ostensibly being led by a ham-handed dissembler who can't bring himself to say "the buck stops with me," when at this stage of the game it was essentially the only appropriate answer to the question. It's hardly surprising Mr. McNerney can't seem to fathom where the "buck stops" when a lifelong political hack like Ken Duberstein is actually pulling the strings behind the scenes.
on October 22, 2009 9:01 AM | Reply
Great question Jon, but he pulled a Gene Kelley on you.
on October 22, 2009 10:31 AM | Reply
"So we're a team going after this thing." Yeah,right. You can be sure that Jimbo isn't working 10 hrs a day 5 days a week plus 8 hrs on Saturday like the 787 mechanics are. And you know he definitely isn't working 12 hr shifts 7 days week like the side-of-body fix crews.
on October 22, 2009 11:08 AM | Reply
A perfect question.
The answer shows that managers nowadays are very similar. They tend to be very unemotional, which, especially in aviation, is very sad to see as most of the employees working on projects have an emotional relationship to what they are doing. Managers know exactly where the problems are and most probably they also know how to solve them. But they are incapable to understand that the legacy of a unique company is build on the results of dedicated people being managed by dedicated and understanding managers. Maybe the problems with the current B787 has also its good side: If there hadn't been any problems it would have shown to all these other state-of-the-art managers out there, that endless outsourcing, endless powerpoint presentations showing the advantage of yet another tool, endless restructuring of departments and endless power to marketing guys does work.
The soul of a product does not come from powerpoint; it comes from the people creating it.
So what could have Jim said instead? Everything would have been better than the worthless answer he gave. But what did he think when Jon asked the question? That would be interesting to know.
on October 22, 2009 12:24 PM | Reply
None of the commentators have ever run a public company or headed a major division, Most of you want answers that don't exist. This is a difficult problematic issue. I don't know where this plane goes, but I do know there is huge uncertainty and most people (investors) understand that. Tomorrow will be different than today as evidenced by the last 3 or 4 years. It is certainly ok to ask any question, but the question asked by this blogger did not / could not move the ball forward. And, if don't like the answers, sell or short the stock, or don't work for the company. Alas, the beauty of capitalism.
on October 22, 2009 4:49 PM | Reply
Yep, Jon... you got Pwned. He played you like a penny whistle.
The truely sad part is that Mcgoofball is not alone in his "it's a team thing" when it's bad, but when it's good "its all me, baby". He's just another huckster playing people for fools. It would be nice if we had someone in charg that understood the rule of being Captain. It's all your fault. If something goes wrong, it's the fault of the Captain. Either he failed to properly supervise his crew, or failed to correct problems when they were small. McN is a failed CEO. He should be gone for wasting so much shareholder equity. He won't be though, he's got enough "pals" on the BoD that he's safe from all his incompetence. It's the shareholders, employees, and customers who pay the price.
on October 22, 2009 5:17 PM | Reply
This is how Jim McNerney “should” have answered Jon’s question.
This is a brand new airplane with brand new technology and we are taking this one day at a time. With any new airplane with new technology unforeseen problems arise because it is not humanely possible to for see every possible problem. To take a quote from American Engineer Henry Petroski of Duke University who specializes in failure analysis:
"Engineers ... are not superhuman. They make mistakes in their assumptions, in their calculations, in their conclusions. That they make mistakes is forgivable; that they catch them is imperative. Thus it is the essence of modern engineering not only to be able to check one's own work but also to have one's work checked and to be able to check the work of others."
So with that being said I am hopefully optimistic that the airplane will fly before the end of the year. But ultimately the airplane will fly only when it has satisfactory competed all its ground tests and checks and has proven it self airworthy. That day will come when it comes. I believe the worst thing we could possibly do now is rush in the 787 into flight test putting the aircraft and flight crews in more risk then necessary. If you look back over the history of aviation to many aircraft and air crew have been lost by a hasty rush to fight tests. I hope that answers your question Jon.
on October 22, 2009 6:41 PM | Reply
I have read your question, and their answer several times. It was a good direct question, which they managed not to answer.