Tough time for CEO Jim McNerney- BA

Northern, WI 1/22/2013 (wallstreetpr) –Boeing (NYSE:BA) CEO Jim McNerney, has involved himself in the investigation and solving of its 787 Dreamliner’s complex problem by holding a meeting twice a day with all of its senior executives like Chief Technology officer, Chief Financial Officer and the Boeing’s commercial head.

Jim McNerney, who has solid experience and background, was the ex-CEO in General Electric’s aircraft engine division and later became the first outside CEO of 3M corp, where he has a credit of turning around the company by enhancing the profit with many new strategies like six sigma and employee cost cutting techniques. Yet, Boeing’s (NYSE:BA) Dreamliner’s problem remains a challenge for the CEO. The main point of issues that underlies the problem are

  1. The basic idea was to produce a jet from composite materials which is fuel efficient; this itself was not viable for the company in the long run.
  2. To reduce cost the company adopted a new manufacturing plan, by outsourcing their manufacture to 70 suppliers outside the country. This left the company with lesser control on the time it finished the product and also had logistics issues. CEO visited the suppliers himself to know the practical reasons for the delays.
  3. McNerney also changed the top executives frequently, and the Dreamliner has seen four different heads since its inception.
  4. FAA rejected to approve the airlines proposal of making a pilot in charge of battery inspection while on board saying it cannot accept the proposal until it has a clear reason of why the battery gets defected.

The financial loss to the company will be big if it fails to solve the problem soon and make the flight available in the skies as it has to bear a huge inventory costs and also it has to pay penalties to the clients for all delay in delivery.

The shares of Boeing (NYSE:BA) were down by1.17% to close at $74.16.

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Published by Nicholas Maithya

Nicholas is a Financial Analyst by profession, who enjoys writing about investments, technological developments, business, economics and other financial topics at various financial publications. Join him here on Wallstreetpr.com as he endeavors to deliver to you the latest breaking news on the above mentioned fronts. Contact him by email at nmaithya@gmail.com or follow Nicholas Kitonyi @nmaithyak on Twitter.

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