Bloomberg News reports that Boeing Inc. (NYSE: BA) is delaying the delivery of its 787 Dreamliner into 2009. It already delayed it from May 2008 to November 2008 several months ago. This may well be the biggest business blunder of its CEO's stellar career.
Since I am writing a book about Boeing and its CEO James McNerney, I have been very focused on his career. And he has had an almost unbroken track record of spectacular success in everything he's done. He was a hockey and baseball player at Yale; went on to Harvard Business School for his MBA. Then he went from Procter & Gamble (NYSE: PG) to McKinsey & Co. to General Electric Company (NYSE: GE), where his 18-year career ended just short of succeeding Jack Welch.
After jumping from GE to 3M Co. (NYSE: MMM), McNerney took over Boeing in 2005 and the company's stock rose dramatically until it became increasingly clear that Boeing would not be able to meet its original delivery deadlines for the 787 Dreamliner. Boeing now claims that the 787 will fly for the first time near the end of the second quarter of 2008 and won't ship to the first customer, All Nippon Airways Co., until 2009. Both dates were pushed back by about three months.
Boeing announced its first delay last October 10th, when it delayed first delivery from May 2008 until November or December because of parts shortages and so it could complete work that suppliers should have finished. The first flight was pushed back from August 2007 to the end of March 2008, and Boeing said on December 11th it still planned to meet those schedules.
It's not easy to bring these projects in on time. But just a month ago, Boeing was reassuring investors that the first delay would be the last. I hope for McNerney's sake that there will be no further delays.
Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He owns GE shares and has no financial interest in the other securities mentioned.
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Reader Comments (Page 1 of 1)
1-17-2008 @ 2:37PM
Drew Corman said...
Push outs get blasted.