Addendum
Leadership shifts at Boeing
April 1st 2016
Under fierce competitive pressure from rival Airbus, Boeing last month announced its biggest program management reshuffle in years, undertaken to significantly reduce its overheads. Read More »
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Details of the revamp, which consolidated five commercial jet programs into four production units, were outlined in a note to the company’s employees from Boeing Commercial Airplanes president and CEO, Ray Conner.
“The changes were being made “to lean out our structure from the top down while continuing to perform on our development programs and keep our delivery commitments to customers”, he said.
The decision followed Boeing’s announcement in January that the production rate of the B747, now built almost exclusively as a freighter, would be further reduced. From last month, the aircraft type’s production rate dropped from 1.3 per month to one per month from last month. A further slowing, from September, will reduce the production rate to 0.5 per month, or six aircraft a year.
“Global air passenger traffic growth and airplane demand remain strong, but the air cargo market recovery that began in late 2013 has stalled in recent months and slowed demand for the 747-8 Freighter,” Conner said. “While we remain confident in the 747-8’s unique value proposition and an upcoming replacement cycle for late-model 747-400 freighters, we’re taking the prudent step to further align production with current market requirements.”
Boeing insiders said the management re-organisation was widely expected as pressure within the company to reduce costs across all sectors of the business has been intensifying in the last year.
As part of the reorganization, Boeing’s senior vice president of airplane programs, Pat Shanahan, will join the executive council of The Boeing Group, led by chairman, president and CEO, Dennis Muilenburg, on April 4. He will not be replaced at the commercial airplane division. Shanahan is now responsible for supply change management and manufacturing operation for the whole company.
He will be joined on the council by Scott Fancher who has moved to Chicago to oversee defense, space technologies and commercial airplane development programs company-wide.
Mike Delaney will succeed Fancher as head of new airplane development at Boeing Commercial Airplanes.
Fancher and Shanahan will split the duties previously handled by Chief Technology Officer John Tracy, who will retire in July after 35 years with Boeing.
The general managers of each commercial program will report directly to Conner to “strengthen ties between the manufacturing and operations parts of the business,” the Boeing Commercial Airplanes CEO wrote.
Boeing’s two oldest and lowest volume twin-aisle jet programs, the B767 and B747 are being consolidated under the oversight of Elizabeth Lund, vice president and general manager of the long-range B777 program. The B767 general manager, Brad Zaback, will serve as Lund’s deputy on the B777 program. Bruce Dickinson, who ran the B747 program, will work under Lund on the consolidated B747 and B767 programs.
“Given the competitive environment we face, it makes sense to realign our leadership in a big picture way instead of making piecemeal adjustments,” Conner said in his memo. “This new lineup will give airplane programs a more direct link to the leadership team and strengthen ties between the manufacturing and operations parts of the business.”
