New Boeing Co. chief executive Jim McNerney says he’s got a steep learning curve to climb as he tries to familiarize himself with his new company.
The process started last week when McNerney and Boeing Commercial Airplanes chief Alan Mulally visited the factory for an unannounced, employees-only question-and-answer session with about 2,000 workers. It was a good debut, said Alan Young, a Herald Reader Network member who works at Boeing and took part in the meeting.
“I’m impressed with the man,” Young said.
But while McNerney may be acquainted with Everett, he still lacks an insider’s knowledge. So The Herald asked readers, community leaders and industry experts what else the new boss should know about this key Boeing installation and the community that surrounds it.
Here are the top six things that McNerney should know or do, they said:
1. Engage the work force: Boeing employs about 18,000 people in Everett, and those people are the key to the company’s success, some said.
“The existing work force here is capable and passionate about building quality products,” said Wade Boyd, who works for the 787 program.
“I hope he realizes the importance of the hard work and dedication Everett Boeing employees give each and every day,” Young added.
McNerney faces his big tests this year, when the International Association of Machinists and Society of Professional Engineering Employees in Aerospace negotiate new contracts.
In his first press conference June 30, McNerney said he will not be deeply involved in the union talks.
“I do know that the company’s workers are fundamental,” McNerney said. “We need to have a balanced discussion, and an outcome that is right for our customers and our industry.”
2. Keep key personnel: That means Mulally.
The high-profile Commercial Airplanes chief was a leading candidate for the CEO job that went to McNerney, and he was the sentimental favorite among the rank-and-file.
“Everything possible needs to be done to keep Alan in control of the entire Commercial Airplanes division,” said Herald reader Hans Herzog, a retired Boeing worker.
Teal Group analyst Richard Aboulafia agreed. Mulally is “an experienced unit head and also a key public face of Boeing jetliners,” he said.
3. Launch the 747 Advanced: Boeing came to Everett to build 747s back in the 1960s, and one of the first big decisions for McNerney will be whether to launch the 747 Advanced, the proposed update of Boeing’s iconic jumbo jet.
That’s “the absolute No. 1 priority,” Aboulafia said.
The 747 Advanced would use engines and electronics developed for the 787, creating a more efficient jumbo jet to compete with the Airbus A380. Boeing needs the Advanced to keep key customers such as Cathay Pacific Airlines, Japan Airlines and British Airways from defecting to Airbus in search of a larger plane, Aboulafia said.
Without the 747 Advanced, Boeing will likely close the production line in Everett because 747 sales have continued to dwindle.
McNerney has been upbeat about the 747 Advanced so far.
“It is a pretty extraordinary plane,” he said. “We’ve just got to make sure we have got the customers lined up we need.”
4. Push the 767 tanker deal: Boeing also picked up a sale late last month for its struggling 767 line, which gives a little breathing room to a program that has been on the verge of being shut down.
But the long-term fate of the 767 is tied to whether – and when – the U.S. Air Force starts buying them for use as aerial refueling tankers, Aboulafia said. “They keep buying a month here and a month there, but if there’s not a (tanker) contract until 2008, that doesn’t matter much.”
Given that, McNerney must have it as a priority to make Congress and the Pentagon aware of “the shelf life of the product line,” Aboulafia said.
5. Deliver on the 777 and 787: Boeing scored big contract wins this spring selling a combination of 777s and 787s, and McNerney needs to remember that, said Herzog, the retired Boeing worker.
“The Everett operations are the home of the 777 and the 787 programs – both extremely important in putting the company back in contention of world leadership for commercial aviation,” he said.
Demand is increasing for Boeing jets, noted Leeham Co. analyst Scott Hamilton, and McNerney needs to ensure that Boeing and its suppliers can ramp up to meet it.
He and Aboulafia also agreed that Boeing faces a huge challenge in bringing the 787 to market.
The new jet is “a tremendously ambitious program,” Aboulafia said. Boeing has got to get it right and deliver on time, or else. “The market will spot them six months or a year, but the plane has to be as advertised.”
Hamilton agreed. “If it runs a year late, that’s going to be pushing the envelope.”
McNerney has acknowledged the task ahead. “It’s not an unchallenging program,” he told reporters. “But I feel very good about … the extent to which they have their arms around this one.”
6. Tap into local support: McNerney should know that the community supports Boeing, said Boyd, the Boeing employee.
When the company launched its nationwide hunt for a place to assemble its latest airplane, “Everett, Snohomish County and Washington state did fully collaborate to satisfy the formal requirements,” Boyd said.
That’s because officials are “absolutely committed to making Boeing successful,” said Deborah Knutson, president of the Snohomish County Economic Development Council. “We have a very strong interest in seeing Boeing transform. We want to see it happen here.”
Taken all together, the issues surrounding Everett are key to Boeing’s success, readers and experts said.
“The Everett region is an extremely important node in Boeing’s future,” Aboulafia said. “These are key issues he needs to deal with.”
Reporter Bryan Corliss: 425-339-3454 or corliss@heraldnet.com.
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