787 -- A Crisis In Leadership

servantleader · Thu Jan 31, 2013 4:45 pm

Jim McNerney has been at the helm since late 2005 and has shown the ability to neither avoid the 787 crisis nor lead the way out of it. His leadership style to date has been to offer platitudes to soothe the beast Wall Street and to fire divisional and operational managers—a total of eight over this timeframe—and hope for the best. This can hardly be called leadership at all. Additionally, McNerney holds simultaneous title as CEO and Chairman of the Board, which creates a systemic conflict of interest between execution and oversight.

Therefore, the first two steps in the Boeing 787 turnaround are to fire McNerney and separate the CEO and Chairman of the Board duties.

Stitch · Thu Jan 31, 2013 4:55 pm

Well, buy up 51% of Boeing's outstanding shares and have at it.

By the time McNerney was elected Chairman and CEO, most of the decisions regarding the 787 that have come to haunt the program were already made by people like Alan R. Mulally, Mike Bair and Harry Stonecipher.

Sure, McNerney could have just started from scratch all over again, but if he had done so, he'd have assuredly been voted out at the next Shareholder's Meeting and replaced with someone who would have continued with the decisions already made.

And we shouldn't forget that McNerney was the man who convinced Boeing to sign an exclusive power deal on the 777-200LR | 777-300ER | 777 Freighter, turning a massive financial liability (the GE90) into a cash cow.

[Edited 2013-01-31 09:02:46]

PITingres · Thu Jan 31, 2013 5:19 pm

Quoting ServantLeader (Thread starter):
Jim McNerney has been at the helm since late 2005 and has shown the ability to neither avoid the 787 crisis nor lead the way out of it.

It's unreasonable to expect him to have avoided it (as Stitch points out, the crucial decisions were long before set in stone), and it's arguable that he didn't lead them out of it. When you're in a deep hole it takes time to climb out.

I have no brief for or against McNerney, but this sort of thing smacks to me of witch-hunting.

Quoting ServantLeader (Thread starter):
the first two steps in the Boeing 787 turnaround are to fire McNerney and separate the CEO and Chairman of the Board duties.

This, I will actively disagree with. If the project hadn't been improving I might agree, but you don't sack leadership to punish someone else's bad decisions in the past. If anything, that move could well put Boeing deeper into the hole.

As for fiddling with CEO vs COB duties, I hardly see how that is going to fix the battery problem, or energize anyone to work harder, or smarter.

I've been through a couple CEO turnovers in the large-corporation world, and even when the new is drastically different from the old, it takes time for the effects to work down through the corporate culture. CEO replacement is almost never the fix for an operational problem. It may (or may not!) fix a leadership problem but that is a longer-term effect.

MaverickM11 · Thu Jan 31, 2013 5:27 pm

Quoting ServantLeader (Thread starter):
to offer platitudes to soothe the beast Wall Street

I don't think anyone on Wall Street is 'soothed' at this point? You can only overpromise and underdeliver so many times before people stop believing you, and the trust probably ran out by 2009. I think Wall Street generally believes the 787 will work out long term, regardless of what Boeing leadership is saying.

servantleader · Thu Jan 31, 2013 5:27 pm

He is responsible for maximizing shareholder wealth -- how does $150B in unrealized planned revenue over the past 5 years meet that standard?

Stitch · Thu Jan 31, 2013 5:33 pm

Quoting ServantLeader (Reply 4):
He is responsible for maximizing shareholder wealth -- how does $150B in unrealized planned revenue over the past 5 years meet that standard?

Return on invested capital (excluding goodwill) has averaged 36.5% during the past three years, which is considered excellent.

servantleader · Thu Jan 31, 2013 5:42 pm

The Boeing Company proper is in good financial standing -- the issue being discussed here is the performance of the 787 to date and the looming disaster should it be grounded for an extended period of time due to having to redesign the entire lithium ion battery system.

akelley728 · Thu Jan 31, 2013 5:52 pm

There is an interesting article that came out from Newsweek this week that talks about some of the leadership issues that potentially contributed to the 787 woes.

"The Dreamliner is grounded. How a scrappy and innovative company lost its way."

http://www.thedailybeast.com/newswee...ing-s-dreamliner-was-grounded.html

packsonflight · Thu Jan 31, 2013 5:58 pm

Here is pretty good article about the change in Boeing leadership.

http://seattletimes.com/html/sundaybuzz/2014125414_sundaybuzz06.html

I recall a comment made by one of the Airbus bosses from 19 jan regarding the new A350 It was something along the lines of not to loos control of the architecture of the aircraft through out sourcing.

In light of the latest developments with the 787 this is possibly what happened at Boeing.
When Boeing launched the 787 program they talked a lot about now being a "system integrator" I guess that is a strategy that failed.

http://www.jpri.org/friends/BoeingFingleton.pdf

Stitch · Thu Jan 31, 2013 6:21 pm

Quoting ServantLeader (Reply 6):
The Boeing Company proper is in good financial standing -- the issue being discussed here is the performance of the 787 to date and the looming disaster should it be grounded for an extended period of time due to having to redesign the entire lithium ion battery system.

The FAA could permanently revoke the TCDS for the 787 tomorrow and Boeing Commercial Airplanes, much less The Boring Company, would survive.

Quoting packsonflight (Reply 8):
Here is pretty good article about the change in Boeing leadership.

I firmly believe that if the 7E7 program had been presented to Boeing's BoD with the intent to develop the plane following the same plan as the 777 was developed, the BoD would have declined to grant Authority to Offer on the grounds that it probably would have ended up being too expensive.

Yes, Boeing spent as much or more in the end by choosing the outsourcing level they did, but at the time the decision was made, Boeing's exposure was estimated at around $5 billion, whereas doing it the 777 way probably carried estimates of between $10 and 15 billion (considering the 777 doubled her planned budget).

There was no way McD Management would allow that level of spending.

[Edited 2013-01-31 10:25:59]

servantleader · Thu Jan 31, 2013 6:33 pm

Nobody is suggesting that Boeing Airplane is in danger of going out of business -- everybody is talking about BA leaving bundles of money on the table and inviting Airbus in for an all-you-can eat smorgasbord. Survival is not the name of the game -- maximization is.

lhcvg · Thu Jan 31, 2013 6:33 pm

Quoting Stitch (Reply 9):
Yes, Boeing spent as much or more in the end by choosing the outsourcing level they did, but at the time the decision was made, Boeing's exposure was estimated at around $5 billion, whereas doing it the 777 way probably carried estimates of between $10 and 15 billion (considering the 777 doubled her planned budget).

There was no way McD Management would allow that level of spending.

I think that's a key point. It very well may not have been considered acceptable with those numbers, so perhaps the outsourcing was the only way the 787 got built in today's environment. We have to be careful about what things are current mgmt issues, and which are "baked in" to the 787 program writ large from the get-go, due to these major structural decisions made a decade (or so) ago.

Stitch · Thu Jan 31, 2013 6:38 pm

Quoting ServantLeader (Reply 10):
(E)verybody is talking about BA leaving bundles of money on the table and inviting Airbus in for an all-you-can eat smorgasbord.

Airbus can't offer A330-200s in any significant quantity in the next 12-18 months. And even if they could, the 787 is the better long-term economic platform. As such, even if the 787 is grounded for 12-18 months, I do not expect major 787 customers canceling their orders.

servantleader · Thu Jan 31, 2013 6:49 pm

The FAA has signaled that they will not allow the 787 back in the air without a major redesign of the lithium ion battery system -- if this crisis lingers into 2014 Boeing will face significant defections to Airbus.

Motorhussy · Thu Jan 31, 2013 6:53 pm

Quoting Stitch (Reply 9):
The Boring Company,

Assuming this was an AutoCorrect issue rather than a slight on Boeing's sltyle of business.

On the leadership front, what difference would/could have Alan Mulally have made? He's very hands on and knows what it takes to make a good aeroplane.

packsonflight · Thu Jan 31, 2013 7:11 pm

Quoting Stitch (Reply 9):
I firmly believe that if the 7E7 program had been presented to Boeing's BoD with the intent to develop the plane following the same plan as the 777 was developed, the BoD would have declined to grant Authority to Offer on the grounds that it probably would have ended up being too expensive.

That is the problem. Wall street is to short sighted and to focused on quarterly earnings. Making airliners is a long term business and the rewards come decade after the first dollar is spent.

Stitch · Thu Jan 31, 2013 8:37 pm

Quoting ServantLeader (Reply 13):
The FAA has signaled that they will not allow the 787 back in the air without a major redesign of the lithium ion battery system -- if this crisis lingers into 2014 Boeing will face significant defections to Airbus.

Unless the FAA (and EASA) demand Airbus perform a major re-design on the lithium-ion batteries used in the A350XWB, in which case I foresee another banner year for 777 sales...

servantleader · Thu Jan 31, 2013 8:48 pm

The Airbus lithium ion battery system is smaller and less integral to plane functions that of the 787 -- and besides, they can learn from the Boeing incident and adjust accordingly.

cornutt · Thu Jan 31, 2013 8:50 pm

Quoting Stitch (Reply 1):
By the time McNerney was elected Chairman and CEO, most of the decisions regarding the 787 that have come to haunt the program were already made by people like Alan R. Mulally, Mike Bair and Harry Stonecipher.

Mulally being an exception, a lot of the people dismissed were Phil Condit cronies. And some of them had to go anyway because in 2005 the company was still trying to cleanse itself of the Mike Sears scandal. (Fortunately, Debby Hopkins was quick to clean up the accounting side. And then she went to Lucent... poor gal...)

abba · Thu Jan 31, 2013 8:55 pm

Quoting ServantLeader (Thread starter):
Therefore, the first two steps in the Boeing 787 turnaround are to fire and separate the CEO and Chairman of the Board duties.

I have no particular views on Mr.McNerney. However, no matter what - having the CEO and the chairman of the board to be the one and the same person is absolutely ridiculous. It eliminates the checks and balances in a company and significantly reduces the accountability of the CEO. Corporate history is full of examples on how bad things can go with this kind of insane leadership structure. It is no coincidence that this leadership structure is prohibited by law is quite a few countries.

Quoting PITingres (Reply 2):
When you're in a deep hole it takes time to climb out.

Certainly - and it takes even longer if there is no COB to put the CEO under pressure and make him/her honest and focused. Being the same person that is left to the individusl's personal moral and ethical standards. Something I do not put much trust in... (among others knowing myself)

Quoting Stitch (Reply 5):
Return on invested capital (excluding goodwill) has averaged 36.5% during the past three years, which is considered excellent.

I have seen companies go bust with similar ROI. It only takes a CEO-COB strong enough and a board weak enough to cook the books. The problem being that the one creating this result and the one being accountable to the owners that this result is real is one and the same person. Do not trust this number!

[Edited 2013-01-31 13:10:51]

multimark · Thu Jan 31, 2013 9:17 pm

Quoting akelley728 (Reply 7):
There is an interesting article that came out from Newsweek this week that talks about some of the leadership issues that potentially contributed to the 787 woes.

"The Dreamliner is grounded. How a scrappy and innovative company lost its way."

http://www.thedailybeast.com/newswee....html

A great article that reinforces my belief that Condit's move of HQ to Chicago was the end of Boeing's golden era. Breaking up a corporate culture, further seen by move to circumvent Boeing unions with outsourcing and Charleston, have not enhanced the company.

Stitch · Thu Jan 31, 2013 9:21 pm

Quoting ServantLeader (Reply 17):
The Airbus lithium ion battery system is smaller and less integral to plane functions that of the 787...

With the exception of helping to start the APU, I imagine that the main batteries on the A350 perform much the same functions as they do on the 787.

Quoting ServantLeader (Reply 17):
and besides, they can learn from the Boeing incident and adjust accordingly.

They're already starting to assemble airframes.

Quoting Stitch (Reply 5):
Return on invested capital (excluding goodwill) has averaged 36.5% during the past three years, which is considered excellent.

Quoting abba (Reply 19):
I have seen companies go bust with similar ROI. It only takes a CEO-COB strong enough and a board weak enough to cook the books.

Ah, so Boeing is deliberately performing Accounting Fraud, then. You'd think they put that fraud to positive PR use and add a couple hundred phantom units to orders and deliveries each year so they could have remained the largest commercial airplane manufacturer the past few years.

abba · Thu Jan 31, 2013 9:31 pm

Quoting Stitch (Reply 21):
Ah, so Boeing is deliberately performing Accounting Fraud, then. You'd think they put that fraud to positive PR use and add a couple hundred phantom units to orders and deliveries each year so they could have remained the largest commercial airplane manufacturer the past few years

No - that is not what I am saying.

What I am saying, however, is that the system that should - to some extent at least - help prevent that this being the case is most unfortunately not in place in the leadership structure at Boeing. The conflict of interest between a CEO and a COB that might help keep the system honest has been eliminated at Boeing. This will be a major reason for me not to invest my few dimes in such a company.

Freshside3 · Thu Jan 31, 2013 9:35 pm

The primary problem with Boeing(and the 787 project in particular)has to do with this "moving headquarters to Chicago" nonsense a few years back. Granted, that in itself, didn't cause the problems......but this obsession has kept the company unfocused on taking care of business. Yes, they did save some tax money in Illinois, instead of Washington......but this lack of focus by Boeing's management has cost them dearly, in the long run.

They have made a lot of mistakes by not paying attention. And this is before the battery debacle. It was not too long ago, that 787 components made in South Carolina, were not exactly compatible with those make in Italy or Japan. Too often, taking the "easy way out" , outsourcing too much of the project, not enough made "in-house" and not enough control.

Management was too busy patting themselves on the back for doing a good job in saving the company taxes, that they forgot about the rest of the operation. Simple as that.

Stitch · Thu Jan 31, 2013 9:39 pm

Quoting FreshSide3 (Reply 23):
The primary problem with Boeing(and the 787 project in particular)has to do with this "moving headquarters to Chicago" nonsense a few years back. Granted, that in itself, didn't cause the problems......but this obsession has kept the company unfocused on taking care of business.

In fact, the move to Chicago was to allow the company - the entire company - to focus on taking care of business. Boeing now had a massive presence in Saint Louis (with McD's defense business) and a much stronger presence in California (via the acquisitions of Rockwell International and Hughes aerospace). It also put them closer to Washington D.C., which was important from a defense lobbying aspect.

If this grounding leads to some large quarterly losses in 2013, that would probably give Boeing's stock price a nice boost when you consider that Apple announces they made more money than any company in the history of human civilization and their stock promptly drops like a rock and when Amazon announces yet another loss, their stock jumps to an all-time high.

[Edited 2013-01-31 13:44:43]

sankaps · Thu Jan 31, 2013 9:44 pm

Quoting akelley728 (Reply 7):
There is an interesting article that came out from Newsweek this week that talks about some of the leadership issues that potentially contributed to the 787 woes.

"The Dreamliner is grounded. How a scrappy and innovative company lost its way."

http://www.thedailybeast.com/newswee....html

An interesting read, but has factual inaccuracies. For instance it perpetuates the myth that the jet age was an American innovation "... a surpassing American technical achievement—the jet age".

The inventor of the jet engine and the first commercial jet airliner were both British -- Sir Frank Whittle and the de Havilland Comet respectively.

servantleader · Thu Jan 31, 2013 9:45 pm

How do you defend 4 years late, billions over budget, and an FAA grounding? Hold a major position in Boeing stock.

Norcal773 · Thu Jan 31, 2013 10:08 pm

I've always said it since Mullary left Boeing for Ford.. bring Alan back and he'll right this Boeing ship. Look at what he has done at Ford!

redflyer · Thu Jan 31, 2013 10:08 pm

As Stitch pointed out, McNerney inherited most of the 787's inherent problems as the majority of the program's fundamental decisions were cast by his predecessors or their subordinates.

I'd say considering who McNerney's predecessors were, I'd rather have him in the driver's seat. Had Condit or Sonecipher stayed around longer than they did we'd be bitchin' about a lot more than a single problem-plagued airplane program.

Quoting Stitch (Reply 24):
In fact, the move to Chicago was to allow the company - the entire company - to focus on taking care of business. Boeing now had a massive presence in Saint Louis (with McD's defense business) and a much stronger presence in California (via the acquisitions of Rockwell International and Hughes aerospace). It also put them closer to Washington D.C., which was important from a defense lobbying aspect.

According to this article, other considerations played a role as well in the decision of picking Chicago as the final destination. And it had nothing to do with airplanes.

http://www.bizjournals.com/dallas/bl...the-real-reason-boeing-dissed.html

Stitch · Thu Jan 31, 2013 10:22 pm

Quoting Norcal773 (Reply 29):
I've always said it since Mullary left Boeing for Ford.. bring Alan back and he'll right this Boeing ship.

As President of Boeing Commercial Airplanes, Alan Mulally was directly involved in the decisions to outsource so much of the design and production of the 787 and was also one of the final authorities on which subcontractors were chosen. Subcontractors like Vought Aerospace and Alenia Aeronautica that Boeing had to buy-out either in whole or in part.

If he'd been named Chairman and CEO, I'm pretty sure the 787 program would still have imploded.

Quoting Norcal773 (Reply 29):
Look at what he has done at Ford!

His bet to mortgage Ford's future certainly paid off, and I applaud a number of his decisions at Ford. However, if they had not, Ford would have been in danger of liquidation and would likely have needed significantly deeper government support than GM did to recover.

[Edited 2013-01-31 14:25:26]

BoeingGuy · Thu Jan 31, 2013 10:31 pm

Quoting sankaps (Reply 25):
An interesting read, but has factual inaccuracies. For instance it perpetuates the myth that the jet age was an American innovation "... a surpassing American technical achievement—the jet age".

The inventor of the jet engine and the first commercial jet airliner were both British -- Sir Frank Whittle and the de Havilland Comet respectively.

No, that's true. How successful was the Comet? Zilch. The 707 and DC-8s were the first real successful jet age aircraft. The successful jet age was an American innovation.

Quoting Norcal773 (Reply 29):
I've always said it since Mullary left Boeing for Ford.. bring Alan back and he'll right this Boeing ship. Look at what he has done at Ford!

I don't share the same fondness for Alan. Look at what market share did under his helm. Went from 60% to a perpetual second place behind Airbus.

To be fair, I almost kind of feel bad for McNerney and Ray Conner and Jim Albaugh. Especially the latter two seem like good leaders who value their people and investing in the product, but had the misfortune of inheriting huge problems that weren't their faults.

Norcal773 · Thu Jan 31, 2013 10:35 pm

Quoting Stitch (Reply 32):
As President of Boeing Commercial Airplanes, Alan Mulally was directly involved in the decisions to outsource so much of the design and production of the 787 and was also one of the final authorities on which subcontractors were chosen. Subcontractors like Vought Aerospace and Alenia Aeronautica that Boeing had to buy-out either in whole or in part.

If he'd been named Chairman and CEO, I'm pretty sure the 787 program would still have imploded.

I am a Vendor Manager for probably the biggest outsourcing company out there and I do know for a fact Vendor performance has a lot to do with how they're being managed to do the job they've been tasked to do so it's not to say that if he was involved in managing the vendors, it wouldn't have worked out better but we don't know that and probably never will.

Quoting Stitch (Reply 32):
His bet to mortgage Ford's future certainly paid off, and I applaud a number of his decisions at Ford. However, if they had not, Ford would have been in danger of liquidation and would likely have needed significantly deeper government support than GM did to recover.

I don't know if I'd call it a bet because probabilities come into mind and he calculated that decision wisely I am sure. Bottom line is he managed Ford during very hard times and they came out of it shining. Heck, they didn't even need that bail-out.

[Edited 2013-01-31 14:36:32]

mrocktor · Thu Jan 31, 2013 11:03 pm

Quoting BoeingGuy (Reply 33):
market share

Chasing market share is almost always poor business strategy. Businesses are about making money: margins and return on investment are the measure of success. If you had a plan that would reduce Boeing's market share from 50% to 40% while boosting their ROI by 20%, you'd be a brilliant CEO.

Not saying that's what happened, but don't judge business performance by market share.

Stitch · Thu Jan 31, 2013 11:11 pm

Quoting Norcal773 (Reply 34):
I am a Vendor Manager for probably the biggest outsourcing company out there and I do know for a fact Vendor performance has a lot to do with how they're being managed to do the job they've been tasked to do so it's not to say that if he was involved in managing the vendors, it wouldn't have worked out better but we don't know that and probably never will.

You are quite correct, however I expect the lack of vendor management and oversight undertaken by Boeing would have occurred under Alan as that really was part of Mike Bar's portfolio.

a380900 · Thu Jan 31, 2013 11:32 pm

Quoting Stitch (Reply 1):
By the time McNerney was elected Chairman and CEO, most of the decisions regarding the 787 that have come to haunt the program were already made by people like Alan R. Mulally, Mike Bair and Harry Stonecipher.

Whoever was CEO at the time of the "Potemkine rollout" was a liar and a fraud and should have been fired many times over. 'nuff said.

Arrow · Fri Feb 01, 2013 12:05 am

Quoting BoeingGuy (Reply 30):
No, that's true. How successful was the Comet? Zilch. The 707 and DC-8s were the first real successful jet age aircraft. The successful jet age was an American innovation.

Give me a break! the first tranche of US jet engines in the 40s were license-built copies of the Rolls Royce engines. The Comet's design flaws were mostly around poorly-understood metal fatigue issues and once fixed the revised Comet did reasonably well. Yes, Boeing and Douglas launched the first globally successful jet airliners, but that doesn't mean the jet age was an American innovation. Hell, if you factor in Germany, the US wasn't even number 2 in jet engine development. And number two to fly a jet airliner, after the British, was Canada.

There may well be interesting parallels between the Comet and the 787 -- both were massive leaps in technology. I don't think the 787 will suffer the same fate as the Comet, but at this point you can't rule it out.

ltbewr · Fri Feb 01, 2013 1:15 am

Quoting packsonflight (Reply 15):
Quoting Stitch (Reply 9):I firmly believe that if the 7E7 program had been presented to Boeing's BoD with the intent to develop the plane following the same plan as the 777 was developed, the BoD would have declined to grant Authority to Offer on the grounds that it probably would have ended up being too expensive.
That is the problem. Wall street is to short sighted and to focused on quarterly earnings. Making airliners is a long term business and the rewards come decade after the first dollar is spent.

Indeed this is the root problem not just for Boeing, but all other big companies, especially in the USA. Taking risks, as Boeing has did with the 707, 727, 747, 737, 767, 777 and then getting investment risk adverse with the 787 shows a big change in management, getting too narrow-minded and afraid. The substantial decline of military contracts in the next few years with a changing military and massive pressures to reduce substantially reduce current military spending hurts revenues. This has meant greater pressures on the civilian a/c side and on management to always keep up profits. Today's millisecond media means any 'boo-boos' - like with the 787 electrical and many other problems in getting to customers, get amplified and screw your stock values. If you are in management, that stock price is the ultimate measure of your keeping your excessively paying job.

Until more long term thinking as to investment and development is done, Boeing will have a struggle vs. Airbus and be profitable to it's shareholders.

sprout5199 · Fri Feb 01, 2013 1:21 am

Quoting Arrow (Reply 35):
Give me a break! the first tranche of US jet engines in the 40s were license-built copies of the Rolls Royce engines.

And the jet engines in the Mig 15? reverse engineered Rolls-Royce Nene engines. Your point is? But do you see centrifugal compressor engines on the 707? NO, you see a axial-flow engine, thanks to the Germans. Yes everybody knows that the Comet was the first, however being first doesn't mean best. Companies learn from their competitors. Look at Boeing and the 247 vs the DC-3(what killed that was United killing the deal--good deal for United, BAD for Boeing).

Quoting Arrow (Reply 35):
Hell, if you factor in Germany, the US wasn't even number 2 in jet engine development.

And if you factor in Germany, England was second--the RAF saw no value in it at first. Don't go done that road, as with everything, some of the best ideas are failures to the inventor, but successes to the second guy who improves them. I think the Comet was "rushed" and didn't look at all the new technologies that were in the airplane( I.E. pressurization) and that is what doomed it. Will the 787 fall for the same reason? Who knows. Seems like history is repeating itself, great innovation defeated by something simple(Comet--square windows, Dreamliner--batteries). Go figure.

Dan in Jupiter

JAAlbert · Fri Feb 01, 2013 1:41 am

Quoting ServantLeader (Thread starter):
Additionally, McNerney holds simultaneous title as CEO and Chairman of the Board, which creates a systemic conflict of interest between execution and oversight.

Quoting abba (Reply 19):
having the CEO and the chairman of the board to be the one and the same person is absolutely ridiculous.

It is not at all uncommon for one person to hold the Chairman of the Board and CEO positions in large multinational corporations. And most of these corporations operate just fine.

The decision to outsource was a great idea, but it just didn't work out so well.

kanban · Fri Feb 01, 2013 2:11 am

Quoting Norcal773 (Reply 27):
I've always said it since Mullary left Boeing for Ford.. bring Alan back and he'll right this Boeing ship. Look at what he has done at Ford!

He can't, he's too old and would have to retire (he's 67).
the massive outsourcing was partially a Stonecipher legacy from MD.. and they had problems implementing, the other part was Mullaly's enthrallment in the Toyota Production System, yes it made him a hero at Ford, but we had nothing but trouble with sensei's brought in who didn't understand airworthiness... The Commercial Procurement Director who could have made it work was Gissing.. but he retired. Then the company went to MBA's... no application experience, and too much authority.

However, the idea that you shoot the CEO because he wasn't inspecting the batteries or the installation design is absurd. It would have been micromanagement at it's worst. (and we've all worked for that ilk).

personally, I think this is just a trolling thread to see what conflict can be stirred up.

tdscanuck · Fri Feb 01, 2013 2:46 am

Quoting ServantLeader (Thread starter):
Jim McNerney has been at the helm since late 2005 and has shown the ability to neither avoid the 787 crisis nor lead the way out of it.

Jesus Christ himself couldn't have avoided the 787 issues if he'd come in in 2005. The die was cast.

Quoting ServantLeader (Thread starter):
His leadership style to date has been to offer platitudes to soothe the beast Wall Street

That's what CEO's at very large public companies are for...especially in a double-CEO structure like Boeing has, the guy at the tippy top is way too far from the work (in both an organizational and geographical sense) to be doing anything other than very high level stuff.

Quoting ServantLeader (Thread starter):
Additionally, McNerney holds simultaneous title as CEO and Chairman of the Board, which creates a systemic conflict of interest between execution and oversight.

Although I agree that joint CEO/COB is a terrible idea, it's extremely common in the US. Every year a shareholder petition comes up at every company with this situation, every year the company comes out against it, and every year the shareholders vote it down. Boeing is hardly unique in this regard.

Quoting ServantLeader (Thread starter):
Therefore, the first two steps in the Boeing 787 turnaround are to fire McNerney and separate the CEO and Chairman of the Board duties.

Neither one will fix the 787.

Quoting ServantLeader (Reply 4):
He is responsible for maximizing shareholder wealth -- how does $150B in unrealized planned revenue over the past 5 years meet that standard?

Yes, in 20/20 hindsight, Boeing could have made more money than they did. But that's true for *all* companies. From a financial standpoint Boeing has done very well through McNearny's tenure, including through the biggest economic collapse in modern times. At the corporate level, he's doing a great job by all quantitative measures, and he's not the guy you want to go after for the 787.

Quoting Stitch (Reply 9):
I firmly believe that if the 7E7 program had been presented to Boeing's BoD with the intent to develop the plane following the same plan as the 777 was developed, the BoD would have declined to grant Authority to Offer on the grounds that it probably would have ended up being too expensive.

Exactly. The choices were do the 787 as it was done, or don't do it at all.

Quoting ServantLeader (Reply 17):
The Airbus lithium ion battery system is smaller and less integral to plane functions that of the 787

It is larger and serves exactly the same functions on the A350 as it does on the 787. I'm assuming we're talking the A350 here...the A380 system is smaller and less integral.

Quoting abba (Reply 22):
The conflict of interest between a CEO and a COB that might help keep the system honest has been eliminated at Boeing.

And a huge number of other companies. Not that that's good, but the concept works fine in lots of other places.

Quoting Norcal773 (Reply 27):
I've always said it since Mullary left Boeing for Ford.. bring Alan back and he'll right this Boeing ship.

As CEO of Boeing Commercial, Mullaly was largely responsible for most of the 787 decisions.

Quoting Norcal773 (Reply 27):
Look at what he has done at Ford!

I own both Ford and Boeing stock. One is doing just fine, one is not. And the latter one isn't Boeing.

Quoting a380900 (Reply 34):
Whoever was CEO at the time of the "Potemkine rollout" was a liar and a fraud and should have been fired many times over. 'nuff said.

Which CEO? Boeing has a CEO of The Boeing Company and a CEO of Boeing Commercial Airplanes.

Tom.

justloveplanes · Fri Feb 01, 2013 4:55 am

Quoting Stitch (Reply 29):
As President of Boeing Commercial Airplanes, Alan Mulally was directly involved in the decisions to outsource so much of the design and production of the 787 and was also one of the final authorities on which subcontractors were chosen. Subcontractors like Vought Aerospace and Alenia Aeronautica that Boeing had to buy-out either in whole or in part.

That is one possibility and certainly has sound logic to it, but conversely who is to say Mulally would have allowed the 787 fake rollout or the aggressive production ramp up when the supply chain was still screwed up? That was probably a good part of the pain there. And would he have managed the suppliers better? Judging from the highly outsourced auto industry, probably better there too. So not perfect for sure, but probably better.

It would have been hard not to improve on what actually happened. Scott Carson was from the sales side, and was more likely the wrong person at the wrong time to inherit the most ambitious program since the 747.

solarflyer22 · Fri Feb 01, 2013 5:05 am

Amen! Finally someone in America as bitter as me. Boeing needs a Steve Jobs. Someone that combines technical knowledge with artistic design and a focus on execution. Of course, pretty much every company everywhere needs that but the 787 program just seems to be a series of bad calls so far. Here is my count.

1) The Project Management and Control of the program seemed poor from the gitgo. Missed deadlines over and over again. Total inability to predict where they'll be at any given time.
2) The idea of outsourcing both design and manufacturing to all these sub-contractors was a big mistake. Apple Inc. outsources design of exactly 0% of all their products but will outsource manufacturing with constant Apple supervision.
3) The design and concept of these lithium battery systems looks fundamentally flawed. See comments by Elon Musk

Chairman focuses on shareholders but CEO focuses on execution so I agree its two jobs.

F9Animal · Fri Feb 01, 2013 5:15 am

McNerney is one of the most hated CEOs Boeing has ever had. The workforce and unions despise him. He fired Commericial CEO Scott Carson, or should I say, forced him to retire. A week later, McNerney hired Scott Carson as a contractor. Double the pay, and a sweet job. McNerney is also facing another strike during his tenure.

McNerney is nasty, and very cut throat. He is rude and greedy. I spit on my hand when I shook his hand. He is another exec snake.

gegtim · Fri Feb 01, 2013 5:52 am

Despite all of the politics being argued here, the 787 has yet to kill a passenger. Passengers died because of design flaws on the 707. It went on to fly a long life. Passengers died because of design flaws on the Comet. It went on to a fairly sucessful life. In my mind, only Lockheeds L-188 suffered from deaths due to design flaws. And even those that continued after the overhaul of the wing did well. So lets just let Boeing fix the lithium battery issue and get on with it.

Norcal773 · Fri Feb 01, 2013 5:56 am

Quoting tdscanuck (Reply 40):
I own both Ford and Boeing stock. One is doing just fine, one is not. And the latter one isn't Boeing.

So you should know a company's stock isn't a very good indication of how well they're doing.

sxf24 · Fri Feb 01, 2013 6:00 am

Quoting F9animal (Reply 43):
McNerney is one of the most hated CEOs Boeing has ever had. The workforce and unions despise him. He fired Commericial CEO Scott Carson, or should I say, forced him to retire. A week later, McNerney hired Scott Carson as a contractor. Double the pay, and a sweet job. McNerney is also facing another strike during his tenure.

McNerney is nasty, and very cut throat. He is rude and greedy. I spit on my hand when I shook his hand. He is another exec snake.

I think you're portraying many of your opinions as absolute fact. It is sad you could have such personal hatred for one person. No wonder the employee-management relationship is broken.

sankaps · Fri Feb 01, 2013 7:25 am

Quoting BoeingGuy (Reply 30):
No, that's true. How successful was the Comet? Zilch. The 707 and DC-8s were the first real successful jet age aircraft. The successful jet age was an American innovation.

The article was not referring to commercial success, it said "a surpassing American **technical** achievement—the jet age". The technical achievement certainly belongs to the inventor of the jet engine Sir Frank Whittle, and the first commercial airliner, the Comet. Both British. Trust us Americans to think the world centers around us!

Quoting sprout5199 (Reply 37):
And the jet engines in the Mig 15? reverse engineered Rolls-Royce Nene engines. Your point is? But do you see centrifugal compressor engines on the 707? NO, you see a axial-flow engine, thanks to the Germans. Yes everybody knows that the Comet was the first, however being first doesn't mean best. Companies learn from their competitors. Look at Boeing and the 247 vs the DC-3(what killed that was United killing the deal--good deal for United, BAD for Boeing).

See above.

wjcandee · Fri Feb 01, 2013 8:23 am

Amazing how one vapid investor-board-type troll post that posits some Freshman Business Class corporate-leadership nonsense could generate 50 posts and 12,000 views on A.net just because it says "787" in the title.

Leave the troll alone and it will go away.

sankaps · Fri Feb 01, 2013 8:28 am

Quoting wjcandee (Reply 48):

Amazing how one vapid investor-board-type troll post that posits some Freshman Business Class corporate-leadership nonsense could generate 50 posts and 12,000 views on A.net just because it says "787" in the title.

Leave the troll alone and it will go away.

This is a Newsweek article, and it does share some interesting insights. It is certainly no troll. Threads with titles like "Why was the xyz aircraft not grounded" are the trolls,

Who is online

Popular Searches On Airliners.net