In that post, I commented on Boeing CEO Jim McNerney's apparent inability, during his 4-year tenure, to get the company running on all cylinders. Two months ago, the news was more delays in the Dreamliner project.
Yesterday's Wall Street Journal reported that the company's troubles have now spread to its 747 redesign.
Apparently, the production problems with the Dreamliner have so sapped talent at the company that engineering skills shortages are now affecting the 747-8 program.
The chief of the commercial airplane division, Scott Carson, was eased out on September 1st, replaced by a Boeing military programs executive, James Albaugh. So much for bench strength in the formerly-premier Boeing commercial side of the business.Apparently the delays on the 747-8 jet have become severe enough that the company announced a $1B charge and, like the Dreamliner, delayed the first flight of the redesigned wide-body until next year.
Meanwhile, economic conditions will probably delay both planes' profitability, as airline customers struggle with decreased demand. Cargo versions of the 747-8 are much more in demand than the passenger versions.
As the nearby 5-year price chart continues to show, as in August, McNerney's Boeing can't seem to outperform the S&P500 Index.
In fact, the company's slide from its price peak in early 2007 has been much more rapid than the index's. For the past 18 or so months, the company's equity price has pretty much tracked the index.
That doesn't say a lot for McNerney's management prowess. As I mentioned in the August post, for the sort of risk one takes in holding an indvidiual firm's equity, shareholders expect and demand a better return than simply tracking the equity markets.
I wonder how long it will be before Boeing's board concludes that McNerney just doesn't have the horsepower to move Boeing's performance up above the index for the long term, and eases him out.
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