Boeing

Boeing CEO discusses leading company into challenges of future in UM lecture

2013-11-13T13:15:00Z 2013-11-14T15:41:44Z Boeing CEO discusses leading company into challenges of future in UM lecture missoulian.com

As 31,000 members of a machinists union cast their vote Wednesday on a contract for Boeing’s commitment to build its 777X airliner in Seattle, the company’s president appeared at the University of Montana to discuss Boeing’s emergence as a world leader in the aviation industry and its challenges moving forward.

Jim McNerney Jr., the company’s chairman, president and CEO, addressed a crowd of about 900 people in the Dennison Theater on the UM campus – a crowd that included Boeing stockholders, employees, Montana business leaders and university students.

In his 30-minute speech, McNerney didn’t mention the pending vote by members of the International Association of Machinists District 751. When asked by a Seattle television station, he skirted questions about the 777X and Boeing’s next move if union members turned down the company’s eight-year contract.

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A Seattle television crew followed McNerney to Missoula to ask him about a pending contract vote by machinists to build the 777X airliner.

“We hope the team stays together, but we will consider other alternatives if the vote goes negatively,” McNerney said. “I’m not prepared to say we’re moving in one direction or another. The big thing is that this airplane we want to build is a spectacular airplane that our customers want. Where and how we build it will be decided over the next few months.”

With that, McNerney homed in on the topics of his address, the Harold and Priscilla Gilkey Executive Lecture, focusing on “leadership, innovation and competitiveness” in a global market. He touched on the challenges Boeing faces moving forward, and how it established itself as the nation’s largest exporter.

“We’re focused on delivering significant and sustained growth in the years ahead by facing into the realities instead of running from the realities of global competition,” McNerney said. “Rising incomes and education levels around the world have created billions of new customers for goods and services. It’s a world of opportunity for business growth like none before.”

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While the opportunities are high, McNerney said, they also come with challenges. Global competitors have become increasingly aggressive as they look to capitalize on emerging markets now valued in the trillion-dollar range.

McNerney said the commercial airliner market carries an estimated value of $4.8 trillion over the next 20 years. The defense, space and security market is valued at $2.9 trillion over the next decade.

Opportunities of that size and value have brought new competitors into the market and have ramped up competition. While Airbus once served as Boeing’s only competitor, McNerney said, the company now faces upstart competition from China, Russian and Canada.

“These dynamics have created a world where virtually all providers of goods and services, including businesses, governments and non-governments, are being asked to deliver more for less,” said McNerney. “The competitive environment Boeing faces going forward is dramatically different than the one in which we grew to the size and marking position we enjoy today.”

Beyond the increasing competition, McNerney said that businesses in today’s global economy also are dealing with a range of other “vexing issues,” including U.S. and European deficits and debt, “which have nearly institutionalized economic uncertainty.”

McNerney also named a softening in the rise of emerging markets, the slowing growth and aging population in mature markets, and the increasing costs of regulatory regimes around the world, including those at home.

Despite the challenges, McNerney said Boeing is built to meet and survive the competition. As a member of the company’s board of directors in 2001, he gained insight into Boeing’s talents and potential for growth.

It also gave him a front-row seat to Boeing’s shortcomings, which he referred to as “ethical and performance lapses” that afflicted parts of the company going back to the prior decade.

The turnaround, he said, has been due to the people at Boeing, not its CEO and other top executives.

“Companies aren’t revived through the exertions, charisma or greatness of one person or one small team,” he said. “The track record of leaders who arrive believing that everything coming before them was terrible and therefore everything must change completely and instantly – that track record is not a good one.”

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McNerney described his job as needing to build on Boeing’s prior strengths and correct its weaknesses. Righting the company’s course, he said, was not so much about transformation, but rather a series of slow shifts that corrected the deficiencies.

First among them, he said, came a renewed focus on Boeing’s leadership.

“I regard cultivating and mentoring the best leaders as clearly the most important aspect of my job, one to which I devote an enormous amount of time and attention,” he said. “A few of the best companies go on year after year producing the best leaders, irrespective of the world in which they were created. They know the kind of leadership they want. They define it, they model it, they teach it, they expect it, they measure it and they make it work.”

McNerney said he expects Boeing’s leaders, regardless of field, to perform at high levels and meet clear expectations.

Among the key points, he said company leaders must generate clear and simple strategies and plans for their teams to follow, while setting high expectations for themselves and others.

They must inspire others to meet expectations, and they must overcome unexpected obstacles. Achieving short-term gains, he said, is not worth harming the company or one’s reputation.

“The bottom line is deliver results,” he said. “You can’t run from that. The score counts.”

Early in his tenure as CEO, McNerney said, Boeing built a unified team with members who bought into the same vision. The company changed its compensation and promotion system to incentivize workers. It created a system of accountability.

Careers move forward for “those who get it,” he said, and they don’t move forward to those who do not get it.

“We have metrics for assessing and requirements for differentiating our managers and executives on how well they demonstrate leadership attributes,” he said. “These factors are measured into their career progress.

“When you’ve got the right leaders motivated to perform individually and inspire the performance of others, you can compete in any industry or business environment, and you can adapt quickly when the winds of change begin to blow.”

Reporter Martin Kidston can be reached at 523-5260, or at martin.kidston@missoulian.com.

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(6) Comments

  1. Leadfoot
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    Leadfoot - November 14, 2013 8:31 pm
    Again, misinformation and deception by unionists to divert attention from what caused Boeing's problems in the first place. The union was unyielding in it's demands to increase pay raises into the Stratosphere (get it?). So, Boeing was made an offer by Tennessee and two other neighboring States for a labor-agreed-to non-union plant, so that wages would remain at levels that kept Boeing internationally competitive. Unemployed workers, there, were delighted with the work to come. Honda, VW, Toyota, BMW, Mercedes, etc have all entered these new non-union markets with resulting happy employees and a profitable bottom line, as witnessed by the recent market successes of these brand names. But no: the union-supported and union-dependent Obama over-ruled the Boeing move to the East. Now this ridiculous Boeing union vote that will cut it's own throat rather than face financial and political realities and keep their demands reasonable. Bring down Boeing, lose your jobs and security, and go on food stamps and all of the other Obama socialistic measures and not have to work. This is what entitlement attitudes have done to America's Industrial Pride. Rather than fail, Boeing WILL move to an Eastern state and build a successful worker-approved non-union factory. Boeing's Superliner WILL be built. All of the profits will be shifted away from Washington State, tax revenues will collapse, entitlements will skyrocket, small business owners will be crushed, and the unions will continue to blame "greedy" company administrators. In the Eastern and Southeastern Red States, all of the opposites will occur; employment and tax revenues will rise, entitlements will drop, and Boeing will remain competitive in the World Market. Only then will the Washington unions try to undo what they have done. Obama will describe the events as "Unfortunate." Remember, these same union members were the ones exempted from Obamacare as a reward for the huge union campaign contributions to Obama in 2012. Calling me names will not change the facts above and you know it. Too bad that the Missoulian didn't give a one paragraph background synopsis of this known history driving Boeing instead of simply focusing on what it interprets as Boeing's shortcomings without an explanation of the forces affecting Boeing. Very few of the CEO's statements were carefully selected for print and focused on only one of the major problems affecting Boeing. Extremely one-sided, as was the union representation in the audience.
  2. spain13
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    spain13 - November 14, 2013 12:57 pm
    This guy is an absolute scumbag and would warrant a special place in hell if it existed.
  3. Kuato
    Report Abuse
    Kuato - November 14, 2013 11:23 am
    The New World Order ( Old world Order) is set to launch yet another devastating attack on the nation state ,American sovereignty, and the middle class through their puppet . Obama is set to sign the new supper trade agreement known as the Trans Pacific Partnership (TPP). It is said to be like NAFTA and CAFTA on steroids, and will allow the complete take over of America by China and the elite ruling class through multinational corporations. If the loss of healthcare isn't enough ,they are going to blind side Americans with this.
  4. The_Boneshackler
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    The_Boneshackler - November 13, 2013 9:45 pm
    Yeah. A union-busting elite who is vastly overpaid at $28,000,000.00 per year while running his company into the ground and ripping off American taxpayers. A true welfare Capitalist. Boeing would no longer exist without the largesse of taxpayer-financed Big Government spending.

    Washington just awarded (Boeing) the largest state tax subsidy in U.S. history "Over the life of the package, the deal is expected to be worth $8.7 billion."
    -- http://www.washingtonpost.com/blogs/govbeat/wp/2013/11/12/washington-just-awarded-the-largest-state-tax-subsidy-in-u-s-history/

    Boeing Loses Billions, and 2 Loyal Airlines, to Airbus
    -- http://www.fool.com/investing/general/2013/11/10/boeing-loses-billions-and-two-loyal-airlines-to-ai.aspx

    Boeing Bleeding Cash As 787 Dreamliners Cost $200M But Sell For $116M, But Productivity Is Improving
    -- http://www.forbes.com/sites/afontevecchia/2013/05/21/boeing-bleeding-cash-as-787-dreamliners-cost-200m-but-sell-for-116m-but-productivity-is-improving/

    Ex-Boeing CFO pleads guilty in tanker deal scandal
    -- http://seattletimes.com/html/businesstechnology/2002091816_webboeing16.html
  5. Bittersweet
    Report Abuse
    Bittersweet - November 13, 2013 8:15 pm
    Why does everyone hate people that have become successful and make more money than they do? Maybe it's not hate, maybe it's jealousy. We live in The United States of America. Everyone of us has the opportunity to be where McNerney is, every one of us has the opportunity to be POTUS. I'm thankful for that. God forbid hard work and persistence actually pay off one day. This country is becoming lazy.
  6. joeleoleo
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    joeleoleo - November 13, 2013 4:30 pm
    Maybe he should justify his huge salary and perks by showing up for work like almost every other Boeing employee did today instead of hiding out in Missoula while his companies largest union votes on his "My way or we'll wreck the company with another 787 fiasco" threat deal. He's not a businessman he's just a plutocrat that 3M didn't want anymore. But I'm sure he thinks he deserves everything he gets because he's trying to steal a pension fund (and he's wealthy already which just feeds his leach-like hunger for more)
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