That Will Require More Than Management Changes, Analysts Say

When Jim Albaugh took over from Scott Carson as CEO of Boeing's commercial airplane division at the end of August, he inherited an airplane program that has been fraught with problems and delayed by more than two years, and industry analysts say restoring faith in the Dreamliner will be one of Albaugh's biggest challenges.

Philip Finnegan, director of corporate analysis for the Teal Group, said in the Puget Sound Business Journal “The problem is there have been so many surprises, so many disappointments, that Boeing still has an uphill battle in terms of re-establishing credibility on the 787.” The company tracks the aerospace and defense industries.

The changes at the top of Boeing are also being closely watched by those with an interest in where the Dreamliner is eventually manufactured. The production facility in Washington State currently is the only production line for the 787, but the company's purchase of a plant in South Carolina from supplier Vought Aircraft Industries has many in the Seattle area nervous about jobs moving east. Boeing and the Dreamliner account for a large percentage of the area's exports and gross domestic product, either directly or through an economic ripple effect, and analysts say Carson was a major advocate of the Everett facility.

They're not so certain about Albaugh, who was in St. Louis before taking the top job in the commercial airplane division, though some industry experts say the decision-making process will be the same. “There’s going to be a detailed analysis around that decision,” Peter Jacobs, an analyst in Seattle with Ragen MacKenzie, told The Business Journal. “Jim Albaugh will have the same set of inputs that Scott Carson would have used.”

Jim Albaugh

Meanwhile, some analysts think Boeing has become too dependent on government contracts, and may no longer have the proper focus on the civilian airliner market. Marco Caceres, a space industry analyst with the Teal Group, told the paper “I don’t know if they are hungry enough to compete in the marketplace.”

FMI: www.boeing.com