Cost cuts remains priority, challenge at Boeing

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Dennis Muilenburg, president and CEO of The Boeing Co., from July 1. Photo via Google images.

June 29, 2015, © Leeham Co. Cost control is going to be one of the top priorities of Dennis Muilenburg, the new chief executive officer of The Boeing Co.

Muilenburg, the president and chief operating officer for the past 18 months, was named last Tuesday CEO. Current chairman and CEO Jim McNerney relinquishes the latter title on July 1 but remains chairman.

We outlined many of the challenges Muilenburg faces as CEO in this post from January. Now that it’s official, an update is in order.


  • Deferred production costs on the 787 continue to weigh down the company.
  • Pricing pressure from the Airbus A330neo add to the 787’s woes.
  • Production gaps for the 747-8, despite the announcement last week to lower rates from 15/yr to 12/yr in March next year, and the 777 Classic remain a major concern.
  • The 737-9 MAX is failing to contribute its share to support profits and Free Cash Flow (FCF).
  • Pressure to sell the 777 Classic is lowering prices, profits and cash flow on this line.
  • Boeing’s commitment to huge stock buybacks for shareholders requires strategies to boost cash flow.

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