Tuesday, August 04, 2009

More Boeing Dreamliner Headaches

Last Thursday's Wall Street Journal reported Boeing's latest troubles with its Dreamliner 787 airplane program.
Now running over two years behind schedule, the plane is running into sagging demand and affordability issues by customers.
In these two posts last year, here and here, I commented on Boeing CEO James McNerney's continuing inability to manage the Dreamliner problem. Essentially, Boeing's board bet that a guy who ran the unit that built engines for airplanes could...run an airplane company.
So far, that's not working out too well. As the nearby 5-year price chart for Boeing and the S&P500 Index shows, the airplane company hasn't outperformed the index over the period.
Figure that you need some extra return from a single issue to adjust for risk, and Boeing's actually behind the index's performance.
What, exactly, has McNerney done for the company? Right now, shareholders would have been no worse off by simply holding the index.
Meanwhile, the gaffes which have become public in Boeing's Dreamliner program would make one ask just how competent the company has been with its vaunted new production and assembly concepts?
Somebody has to take responsibility for Boeing's lackluster total return performance and the Dreamliner's continual launch date. It would seem, after about four years, McNerney would be that person.

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