Peter La Franchi/SYDNEY Chris Jasper/LONDON
Boeing chief executive Phil Condit has warned that 'value-destroying' programmes identified as lost causes will either be "shut down" or sold off.
Confirming Boeing's commitment to a zero-tolerance approach to loss-making operations, introduced by new chief financial officer (CFO) Debby Hopkins, Condit says the Boeing 717 100-seat narrowbody airliner is one project still very much in the balance.
The Boeing chief says that having identified value-destroying programmes, Boeing will ask: "What is it about them that creates that situation - and is there something you can do about it?"
Turning to the 717, Condit says he is keen to compete in that niche, but is unsure about its viability.
"I happen to like the 100-passenger market, and I would much rather be tackling it with the product that we have got, than any other I see out there," he says. " But can we build it at a price that allows you to make money? That is a commercial reality and I am not sure of the answer."
Condit also stresses the importance of core considerations, which he regards as key to making money. These include detailed customer knowledge focus, large-scale system integration and lean, efficient design and production, the latter requiring a move from a product-performance orientation to a product-cost-value one. He adds: "I don't rate us very high on that yet. That is where we will put our effort."
One key move is Boeing's Define and Control Airplane Configuration-Manufacturing Resource Management (DCAC-MRM) strategy, a new system for design and build of aircraft, which will see four-interconnected computer systems replace 450 separate networks.
Condit also hints at the savings Boeing expects to make by standardisation of its own product line, a trend he claims offers cost reduction for customers as well as manufacturers.
Boeing's strategic rethink has seen it launch 'Managing for Value', a move Hopkins says will see its internal finance organisation "assume a leadership role as a valued partner with the business segments".
The new CFO was lured away from General Motors by a $1.56 million deal, Boeing filings reveal. Commercial Airplane Group president Alan Mulally himself benefited from a $6 million deal last year, apparently heading off a possible move to Raytheon.
• Though the 148 aircraft delivered in the first quarter point to a full-year total of 592, Boeing says it will accelerate deliveries and is still on schedule for a target of 620 this year.
Source: Flight International
