Feb. 22, 2016, (c) Leeham Co.: The transition from the controversial and divisive Jim McNerney to the leadership of Dennis Muilenburg at The Boeing Co. is now complete.
Boeing announced today that McNerney stepped down as chairman and also stepped off the Board of Directors. Muilenburg, who succeeded McNerney as CEO last summer, now also assumes the chairman’s title.
It’s a welcome change.
McNerney’s 10 years as chairman and CEO evolved from a welcome change from the era of Harry Stonecipher, and before him, Phil Condit, to one of a highly confrontational and divisive leader bent on smashing labor instead of working with them.
Under McNerney, Boeing endured a strike by the touch labor union, IAM 751 of nearly 60 days and two more bitter contract revisions under threat of placing the 737 MAX and 777X assembly sites outside Seattle’s Puget Sound into what would presumably be non-union locations.
Negotiations with the engineers’ union, SPEEA, didn’t lead to strikes but were no less contentious.
Enter Muilenburg last July. A total enigma to the labor unions in Puget Sound, Muilenburg shocked just about everyone last month when a contract agreement was reached with SPEEA nine months before it became amendable this year. Secret talks and an approached blessed by Muilenburg were in sharp contrast to McNerney’s bust-the-union approach.
The kinder, gentler approach doesn’t mean Muilenburg is going to be any pushover. As LNC reported Feb. 11, a new round of cost cutting at Boeing is in keeping with Muilenburg’s philosophy to trim costs.
Muilenburg is also taking a look at the so-called Middle of the Market airplane, a move some have said is a difference to McNerney, but which LNC doesn’t believe it is. The timelines expressed by the two are similar and Muilenburg remains as cautious as McNerney about the business case. The difference is that Muilenburg is an engineer and McNerney is a bean counter.
Now that he is chairman, Muilenburg can further chart his own course and, perhaps, remake the Board of Directors in his own vision rather than with the Members who were McNerney’s picks.