|
Boeing Going Forward
Under New Management.
But Is It Still Under The Same Old Thinking?
Summary: No question that Boeing's getting a whole passel of new managers. The question is whether it will be more of the same, and more importantly, will it be able to deal with the moribund strategic planning that has defined the company for years.
There’s a new head of Boeing Commercial Aircraft.
Other personnel shifts at the top, too.
It seems the ambient thinking is that canning the incumbents, and bringing in new appointees is the answer. The latest betting game is trying to predict just which high level executives will be re-potted from other industries to fill the positions.
Forgetting They Are In The Airliner Business. Not The Stock Game. The concept of “new” management is in itself considered sufficient to fix Boeing. Now just toss in some saccharine comments from the new appointees about “dedication to safety” – carefully worded no doubt by some PR damage-control agency, and the hope is that Wall Street will conclude that all will be well.
Is anybody really swallowing this?
Let’s call this for what it is. The body count in the front office is inconsequential to getting Boeing stabilized. And “stabilized” means a lot more than just getting the factories and maintenance sectors to lean how to attach bolts to a door plug.
The 800-pound flying gorilla being ignored in the room is the one on which Boeing’s future will depend.
It’s called product line.
There has been zero recognition of the fact that over the past 15 years, Boeing has consistently been competitively caught with its planning and strategy in the full upright and locked position. While the senior management over the last decade has been laser-focused on “enhancing shareholder value,” it has apparently been at the expense of “enhancing customer product value.”
This is the long-term threat to Boeing, and as it stands today, it is the reason that Boeing is now firmly in the #2 position in airliners behind Airbus.
Market Mis-Focus Going Back 30 Years. This has been a long time coming. From a new product perspective, there are giant barnacles restricting how Boeing can move forward.
Back in the 1990s, Boeing assumed that just bringing on an upgraded 737-400 would be enough to compete with the Airbus A320. Airlines will, of course, stick with Boeing.
That plan was disabused when long-time customer United opted for the 320.
Fast forward to the 2008 airshow where – surprise – the A320neo was announced. Based on announced orders, Boeing looked foolish.
Then they reacted with the MAX. The fallout is still in progress. And this leaves Boeing vulnerable to the future.
Here’s a clue. Globally, new-generation, multi-mission narrowbody airliners will be the #1 demand segment.
Airbus has the A321XLR, and via purchase, the A220-300, a platform that has strong growth and stretch potential. The Boeing 737 series is at the end of its development life, as painfully witnessed by the ongoing MAX debacle.
Basically, Boeing has bupkis.
At the end of the day, the only true possible competitor at Boeing is the 737-10. But it is mired firmly in the certification swamp. Some estimates indicate as much as three years before it comes into service. Global airlines won’t wait. Airbus is facing a land-office business demand.
Yes, there is the accurate observation that right now the orderbook at Airbus is full. But remember, the 737-10 orders are over several years out, which is plenty of time for Airbus to expand its production at Mobile.
So, the eyewash of tossing a bunch of executives under the bus won’t fix this. The concocted pablum quotes from new executives about “new dedication to safety” and other doggerel are like tossing dead fish to disinterested seals.
The critical failure at Boeing is that they are on borrowed market time in the all-critical narrow-body segment.
The Boeing Reputation Is Tarnished. Then toss in the other danger signs, like Korean jumping the fence to order A350s. Or Japan Airlines splitting their recent order, giving half of it to Airbus. How ‘bout the CEO of United tacitly tossing its 270+ order for 737-10s into the air, recommending that Boeing concentrate instead on 737-9s.
What Boeing needs is new, aggressive thinking. The focus on share value is great, but share value is dependent on consumer products.
Beyond that, what's next is seeing the strategic shifts that should be announced at Boeing.
Fixing manufacturing issues is important, but the future depends on what they will be manufacturing.
New management is the first step only. This hoedown is far from over.
__________
__________
| 
