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OPINION: Boeing set for crisis-free chief executive switch

Jim McNerney’s announced plan to step aside as chief executive affords Boeing a smooth leadership transition at the top of the company for the first time since 1996.

McNerney’s hand-picked successor, Dennis Muilenburg, has been learning the ropes in Chicago since 2013, when he was promoted from head of the defence and space division to chief operating officer and president.

Boeing’s leadership transitions haven’t always proceeded so smoothly. McNerney’s two most recent predecessors – Harry Stonecipher and Phil Condit – were forced to leave the company in the wake of personal and professional scandals. McNerney’s rise from Boeing board member and chief executive of industrial products firm 3M was both rushed and poorly timed, coming mid-stream during the neglectful development of the 787 technology and supply chain.

Muilenburg has his share of challenges to overcome, but there is no immediate fire-fighting required.

The commercial aviation business has reached a tipping point, following several years of amassing a historic backlog of orders for new and existing aircraft. The challenge now is to keep the development programmes on track while not breaking the production system.

The defence business is in a different place. A contract award for the long-range strike bomber is due shortly. That decision is expected to transform the industrial landscape for combat aircraft production in the USA, with either Northrop Grumman or Boeing the odd man out in a duopoly with Lockheed Martin.

Muilenburg has no fewer problems and opportunities than his predecessor, but he has the rare luxury – at Boeing, anyway – of coming into the job with a head-start and with the pace of events not dictated by scandal.

Despite a two-year stint in Chicago, he also reaches the top post with little of McNerney’s baggage from dealings with Boeing’s largest unions.

McNerney likely considers those clashes as a badge of honour. Extracting major concessions probably lifted a little pressure on Boeing’s margins, but left toxic relations with workers. The 787 experience made Boeing realise that outsourcing is not the answer to the company’s labour problems. Now it is going to find out how much work can be spread to non-unionised sites.

Here again, Muilenburg’s timing is impeccable. With the difficult pension issue resolved in early 2014, no such emotionally-charged subjects are likely to be laid on the table when the next round of contract bargaining with its workforce begins.

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