Leeham News and Analysis
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Leeham News and Analysis
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Boeing’s Conner steps down, successor named from GE Aviation
Kevin McAllister, the new president and CEO of Boeing Commercial Airplanes. Boeing photo.
Nov. 21, 2016: Boeing today announced that Ray Conner will retire as CEO of Boeing Commercial Airplanes well ahead of his Dec. 31, 2017, contract date.
Kevin McAllister of GE Aviation Services was named as his successor.
Boeing said Stan Deal was named president and CEO of Boeing Global Services, a new business unit “to be formed from the customer services groups within the company’s existing commercial airplanes and defense, space and security business units.”
Conner’s message to employees is below.
Thank you for an incredible journey
Today our Chairman, President and CEO Dennis Muilenburg announced a series of decisions that are important to our future. The first is about my decision to retire at the end of next year and who will step in to lead BCA. The second is about a decision to combine our company’s services groups into a third major Boeing business unit to help us win in the market and create more value for our customers.
This week, I will begin the transition out of my role leading BCA while continuing to serve as vice chairman of The Boeing Company through the end of 2017 after nearly 40 years with the company. Dennis, with the full support of the board of directors, has selected Kevin McAllister, a 27-year industry veteran from GE Aviation Services, as the next BCA president and CEO. I have personally known and worked with Kevin for many years and respect his leadership, judgment, and integrity. Leaders throughout the aerospace industry share the same high opinion. Many of you know him well as a partner with experience in virtually every one of our current commercial programs. His temperament and values make him a great fit for Boeing. I can also confirm he shares my passion for winning.
Over the next several months, I will be working closely with Kevin to seamlessly transition our extensive customer, supplier and outside stakeholder relationships, while ensuring a tight focus on our continuing operations and customer support commitments. Dennis has also asked me to stay engaged in the ongoing product strategy work that will shape the future of our airplane family.
On the services front, Boeing will transition to a single integrated services business to be led by Stan Deal, currently senior vice president for Commercial Aviation Services. You know Stan well from his 30 years with Boeing and have seen up close his strong leadership and business judgment. Stan and his team will begin immediately executing a thoughtful plan to bring together major elements of CAS and BDS’ Global Services & Support into Boeing Global Services, which will be fully operational in Q3 2017.
All of us can contribute to this new organization’s success by focusing on our customers’ needs and ensuring continuity to our high standard of service. It’s important to note for our team and our customers that the vast majority of the new unit’s work is expected to stay where it is today, and that commercial airplane fleet support will remain with BCA. Dennis has also asked me in my capacity as vice chairman to provide strategic oversight and guidance for the transition to a single integrated services business.
It has been a great privilege to work for this company and to be part of Commercial Airplanes these many years. For me, it has been an incredible personal journey – from my first job working on 727s, to Supplier Management, to Sales and to my current role. Experiencing our business from each of these perspectives has been fun, exciting, challenging, educational and humbling. Bill Allen could not have been more right in saying that the strength of Boeing is its people.
As I transition to a new role in Boeing and prepare for retirement at the end of next year, my wife Katie and I are filled with a deep sense of gratitude to those who built this company and what it has meant to the communities in which we live. This great company has given countless people the opportunity to see each successive generation accomplish more than the previous. Now you are charged with passing to the next generation a better business than the one you first joined. By bringing your best each day, you can help define a second century even greater than our first.
Ray
Fascinating. I can’t wait to see more analysis. Will it bring GE and Boeing ever closer together ? Will we see all single source solutions for engines ?
Can Boeing survivc another GE- Jack Welch intern. ?
Ther track record isnot exactly spectacular other then massive financial and schedule and morale failures directly attributable to other GE- Welch types in high positions.
Sounds like power point rangers have struck again.
If you don’t mind, I will be using “power point rangers” in future.
Excellent work!
Sure- no copyright issues as far as I know
Its not unique to me- but just part of the lexicon which includes ‘ Walking FOD ” 😉
Scott can you give us more info on this new guy with your deep nexus of the industry.
please tell us its not as bad as it looks!
RE Scott giving / adding more than the public bio on the Boeing site- I believe that would put Scott in an untenable position..
I would have hoped that Boeing would have been planning ahead and grooming an internal manager who knew the pointy end with windows from the blunt end and how it was put together per the ‘ Boeing way ‘. But that is not the Jack Welch way. Boeing has been thouroughly GEed.
I don’t know which strike me hardest fist.
Someone who never built aircraft taking over an Aircraft building operation. What could possibly go wrong? Well DT could be PE and it could be a GE assassin. Ooops. both true.
Conner: Retiring, what asteroid is about to hit Boeing this time?
I wanted to get the announcement out quickly. I will have a story overnight tonight and I plan to make Monday’s Pontifications an analysis of all this.
Looking forward to it, I am most confused other than my asteroid theory.
I am resigning so I can spend some time with my family just has such a dead ring to it.
I guess that debacle of a deal with United resulted in a loss of confidence
Actually Ray announced his retirement end of 2017
That Board picked a GE type is another issue
Yea, but 2017 gets ol Ray another bunch of money.
So, he sold his soul to be named a VP or some such when it meant nothing.
This has a smell to it, waiting to hear what Scott says is going to kill me.
This is a smart move.
Boeing went from a 50/50 split with Airbus on single aisle to 40/60. Who was held accountable for that?
Why Boeing has continued promoting the same executives who performed so poorly has been a big mystery to investors like me.
“Why Boeing has continued promoting the same executives who performed so poorly has been a big mystery to investors like me.”
That, most definitely, is not unique to Boeing.
Charismatic leaders that know their stuff _and_ have a vision are absolutely rare these days.
It seems obvious to me that those who get promoted are those who are good at getting promoted.
It is not a necessary condition that they are good at doing either their last job or their next one.
In my experience there is a correlation when it comes to sales people. The people who get promoted are the people who are good at selling. However in this case there doesn’t appear to be a good correlation between being good at selling and being a good sales manager ! Maybe the same happens in other disciplines.
I believe getting board approval to do anything is the bottleneck. Looks like Conner has had enough of it just like his predecesor. Remember NSA?
Interesting perspective.
“Good managers are hamstrung by an angsty supervisory board.”
Any indications that this is a “well fitting” theory 🙂
Obs: Alan Mulally’s path of activity/success would fit your picture.
Another theory (mine):
the basic system is broken. The territory will not conform to the map. supervisory systems and stock market interfacing is intrinsically broken.
I won´t argue against the system is broken theory. I saw an article recently that said quarterly reporting should be stopped so managers can look at least a year ahead instead of three months.
Anyway, no money from the board equals no new airplane to sell.
obviously.
IMHO good management can be likened to ( successful) animal husbandry.
What I see in the realworld is much closer to a butchers filed of competence.
Yup
Martin A: Now that has some possible relevancy.
So lets put someone who never made an aircraft nor responsible for one in charge of an Aircraft Company (division) . Heck, someone from Airbus would make sense.
That worked out well with the not to be missed McNnearney.
So lets repeat that mistake?
“Heck, someone from Airbus would make (?more?) sense. ”
Look at the inbred jobhopping management elite busy in the German automobile industry.
One of the few guys who seem to be worth their bonus money is imu Mr. Zetsche.
Mr. Mueller imho is a colorless hack.
TW, not going to argue with you about that. I just suspect Conner might be the best man for the job and I am wondering at his hurry to leave. My take is he is sick of fighting for development funds, a lot of ideas have been floated recently, it sort of sounds like he is pointing to BCAs weak points or oportunities and trying to pressure somebody in Chicago to loosen the purse. As I pointed out somewhere below 2.6 bn per year, given existing commitments, won`t buy much R+D, and I can`t help wondering if that was some sort of last straw.
Suggest you read this old articvle re Conner from 2014
http://www.seattletimes.com/business/boeing-ceo-took-home-almost-29m-last-year/
”
However, the filing also shows Conner was given a supplemental grant of 50,000 shares that will vest in three years “to acknowledge his many significant contributions to our Commercial Airplanes business and to encourage him to forgo an opportunity to retire in the near future.”
Normal full retirement age from Boeing for older employees is age 60.
His share options vest in 2017
Unfoertunately some Seattle times pundits dont read their own paper and speculate or make up some conspiracy.
” Did the election of Donald Trump hasten the departure of Boeing Commercial Airplanes’ outspoken president? Perhaps not, but the executive change is jarring, and significant.”
http://www.seattletimes.com/business/economy/did-boeing-make-conner-walk-the-plank-over-trump/
Of course we wouldn’t let a few facts and data get in the way of a local columnist to grab a few ‘ headlines’
Interesting article, not just about Conners but the whole pay structure.
Martin A:
I was agreeing with you and then threw some more into the overall.
Seriously? More GE is what Boeing needs? This will not end well – mark my words…
It seems that Boeing was dissatisfied with O’Connor’s pace in layoffs; they need someone from GE who has a reputation for large layoffs.
NOPE- His share options if he stayed to 2017 will vest on jan 2017
Seattle times thinks it was his opposition to Trump. Worth thinking about.
Not sure I buy that as its in line with we won’t protest to the AF on contracts because it will annoy them on others.
they protested on KC46 and the B21 so not sure it has legs but again worth a thought or two.
I don’t think the Seattle Times drew that conclusion.
Unfortunately- seattle times reporters- pundits do not use a common language. Consider that 2 years ago, BA reported that they had offered Ray Conner 50,000 shares of Boeing IF he stayed past his normal retirement age of 60 ( in 2014) until 2017. Those shares will become fully vested in 2017. Mr Talton didnt bother checking his own seattle times files before printing his unsupported speculation about why Ray was leaving.
Disclaimer – many many years ago, I had some good dealings with Ray when he was a Supervisor on the 777 program. And a lot of workers still hold him in high regard even though he went to the ‘ dark side ‘ in upper management.