Longtime Boeing defence executive Dennis Muilenburg will succeed Jim McNerney to become the 11th chief executive of Boeing starting on 1 July, according to a company announcement on 23 June.
Following a 10-year tenure as chairman and CEO, McNerney will remain chairman of Boeing’s board of directors until February to smooth the leadership transition, Boeing says.
Muilenburg previously led several defence programmes and the overall defence and space business before becoming chief operating officer at the corporate level in 2013.
“Our company is financially strong and well positioned in our markets,” Muilenburg says in a statement released by Boeing.
McNerney is exiting the company amidst a boom in commercial sales and a stagnating defence business. Several commercial projects remain in development while the biggest prize on the defence side – the US Air Force’s coveted contract to build 80-100 next generation bombers – is scheduled to be decided later this summer. A Boeing-led team with Lockheed Martin is competing against Northrop Grumman for the Long Range Strike-Bomber award.
Boeing selected McNerney in 2005 amidst a leadership crisis. His two previous predecessors – Phil Condit and Harry Stonecipher – had been forced out in scandals over only a two-year period. McNerney was then chief executive of 3M but familiar with Boeing's operations as a member of the company's board and past executive for supplier General Electric.
Annual revenues increased 73% to $90.8 billion over the decade that McNerney led the company, Boeing says.
But McNerney also presided over a period of troubled development programmes, such as the 787, along with highly divisive relations with the company’s labour unions.
The 787 programme entered service three years late and faced deep reliability problems. Although production has stayed mostly on track, the 787’s output has come at a steep cost, as deferred costs attributed to the programme approach $30 billion with no signs of stopping soon.
Teal Group senior vice-president Richard Aboulafia says the announcement of McNerney “isn’t too out of line with expectations”. McNerney reached Boeing’s retirement age of 65 on 28 August last year, but was allowed by the board to continue leading the company.
“Given the severity of 787 losses, and the likely connection of those losses to very bad relations between management and labour, there are certainly reasons to question whether his departure is merely a retirement,” Aboulafia says.
Source: Cirium Dashboard
