Wednesday, October 17, 2007

Boeing Shuffles Executives Does It Mean Anything?

Boeing (BA) recently embarrassed itself by announcing delays in deliveries of their state of the art world beating 787. Titanium body and reduced weight was supposed to create approximately a 20% reduction in fuel consumption. Boeing got the fastener issue wrong and has been bitten by supply chain problems. In other words the rivets that hold the airframe together are late. There is good reason to believe that Boeing delayed giving the go signal to the suppliers and the system never caught up.

In early Sep James McNerny Chairman of the Board, President and CEO started to come clean indicating that they were very tight and that if everything did not go exactly to plan they would have to delay deliveries by approximately six months. Guess what they have to delay deliveries much to the delight of the Airbus crowd.

Now they announce changes in the executive suite. Mike Blair who has overseen the 787 project will be replaced by Pat Shanahan. Blair becomes VP business strategy and marketing at Boeing Commercial Airplanes. Many view this as punishment. Maybe in the corporate suite this is Boeing punishment.

But this was a huge project. One person although highly placed cannot be held accountable for the entire problem. Problems of this size reach into the highest level. You have the original problem developing and then consider what system of management elevated the problem. The result was that the CEO had to do a public tap dance and almost post Vegas Odds on his own signature project.

The ultimate responsibility sits with James McNery. But you see he holds three titles at an incredibly huge and complex company. Chairman of the Board, President and CEO. He could use some help. The sooner he gets it the better off the Boeing shareholder will be.