Boeing CEO McNerney stepping down; Muilenburg to step in July 1

McNerney

Boeing CEO Jim McNerney is stepping away from the controls after 10 years.

The aircraft maker said Tuesday that President and Chief Operating Officer Dennis Muilenburg will become its new CEO on July 1. To ease the transition, McNerney will keep working at Boeing until the end of February. He is also remaining chairman of the Chicago-based company.

“In a decade as CEO, Jim restored the vitality, focus and reputation of a storied American company, and we thank him for his extraordinary leadership and congratulate him on his success,” Kenneth Duberstein, Boeing’s independent lead director, said in a statement.

McNerney, who took over Boeing as it was struggling with massive production delays from its 787 Dreamliner program, leaves behind a company with a record book of new jet orders and the fastest production rate in history. In the first quarter of this year, it delivered 184 new jets to airlines around the world, up from 161 during the same period the prior year.

Commercial jets now account for about 70 percent of the company’s revenue; most of the remainder came from its military and space operations.

McNerney was elected chairman, president and CEO in 2005. He reached Boeing’s mandatory retirement age of 65 last August but continued to serve with the board’s approval.

He helped Boeing recover from its prior missteps. The 787 carbon-fiber composite jet was assembled from parts manufactured around the globe, then assembled by Boeing. Never before had the company handed over so much control of its production to outsiders and the budget-saving measure ended up creating headaches, delays and expensive cost overruns.

The Dreamliner’s troubles are now behind it and the company is ahead of schedule developing its 787-10 — the longest and most fuel-efficient of the 787 family. Boeing’s Dreamliners are made at the company’s campus in North Charleston and in Everett, Wash.

Under McNerney, Boeing also moved some of its production away from unionized workers in the Seattle area to nonunion ones in North Charleston.

Outside the 787, the company has kept to safe bets. Instead of developing new commercial airlines, it has tweaked its existing offerings stretching fuselages to accommodate more passengers and altering existing airframes to accommodate new, more fuel-efficient engines.

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With a focus on internal productivity to fund investments in innovation and growth, Boeing’s financial performance steadily improved under McNerney, with revenue rising 73 percent to a record $90.8 billion last year from $52.5 billion in 2004, the year before he became CEO. Backlog and earnings per share tripled over the period, also to record levels.

McNerney said in a statement that Muilenburg has “a deep appreciation of our past accomplishments, and the energy and skill to drive those to come,”

“He is well-suited to lead our very talented Boeing team into its second century,” McNerney said.

Muilenburg, 51, has worked at Boeing since 1985 in roles including president and CEO of its defense space and security business. He was named president and COO of the company in December 2013 and is also co-vice chairman of Boeing.

“Our company is financially strong and well-positioned in our markets,” Muilenburg said in a statement. “As we continue to drive the benefits of integrating our enterprise skills, capabilities and experience — what we call operating as ‘One Boeing’ — we will find new and better ways to engage and inspire employees, deliver innovation that drives customer success, and produce results to fuel future growth and prosperity for all our stakeholders.”

Boeing Co. said Raymond Conner will be its sole vice chairman. Conner, 60, is in charge of Boeing’s commercial airplanes business.