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Issue #587

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2014 Media Kit
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Boeing To Restructure Commercial Airplane Strategy

By: | at 12:13 PM | Channel(s): Air Cargo  International Trade  

The action, announced in a memo by Boeing Commercial Airplane Chief Executive Ray Conner that was obtained by Reuters, follows Japan Airlines Co Ltd’s (9201.T) decision on Monday to pick Airbus planes to replace its Boeing 777s, rather than the next-generation Boeing 777X model.

“You probably wouldn’t have seen this happen if they had won JAL,” said Ron Epstein, an analyst at Bank of America Merrill Lynch. “Boeing is looking at their sales strategy” following the loss in Japan.

A Boeing spokesman said the two events were completely unrelated.

Conner linked the shifts to the retirement of Boeing veteran Mike Bair on November 1. Bair is head of the marketing and strategy groups that look at Boeing’s long-range commercial airplane market forecasts and design its product line and strategy.

In the new structure, marketing functions under Bair will shift to the sales group and be led by marketing Vice President Randy Tinseth, who will report to global sales chief John Wojick.

Strategy and business development functions will shift to the finance group and will be led by Kevin Schemm, who will be head of finance and strategy.

Bair, 57, joined Boeing in 1979 as an engineer working on aircraft noise for the 767. As a rising star of the company, he later went on to build the justification for the aircraft that replaced it, the 787 Dreamliner, which he boasted would be “library quiet”.

He rose to head the 787 Dreamliner program as the company outsourced production of major components to suppliers around the world. Bair left that role in 2007, when the program was about six months behind schedule, taking up his current role as chief of market and strategy.

Production problems ultimately delayed the 787’s entry into service by 3-1/2 years beyond its original schedule. Since then, the plane has suffered a series of problems, including burning batteries on two Dreamliners that prompted regulators to ground the entire fleet in January. Flights resumed in April after Boeing redesigned the battery system.

On Thursday, Norwegian Air Shuttle (NWC.OL) revealed that Boeing had recently redesigned another part - a hydraulic pump that activates wing flaps that steer the plane - after the unit failed repeatedly on a new 787 that the budget Nordic airline received in August.

The plane’s performance was “fantastic” when it flew, Norwegian Air Chief Executive Bjorn Kjos told Reuters in an interview.

But the plane with the faulty pump was unreliable and needed to be serviced every other day, he said. Boeing spent two weeks overhauling it, installing a redesigned pump, he said.