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 Muilenburg, 51, will succeed 65-year-old Jim McNerney, who picked
Muilenburg as heir apparent in 2013.
Though the transition was expected, it comes as the world's largest
plane maker is grappling with record demand for jetliners and weak
military sales. It is speeding up its jetliner factories to
unprecedented levels while introducing new jet models and
overhauling production methods. It also is shuttering some military
plane production, trying to keep other lines running and bidding for
new arms contracts, notably a new long-range strike bomber.
Muilenburg, in an interview, signaled no new direction, and did not
discuss defense as a challenge.
"The challenges we see are ramping up our production system on the
commercial airplane side and doing that profitably," Muilenburg
said.
After 18 months working with McNerney and commercial airplanes Chief
Executive Officer Ray Conner, he said, "our path forward is one of
consistency. You're going to see stability in our strategy and our
execution."
But among the issues Muilenburg faces are how to continue squeezing
margin out of suppliers while ensuring they can keep pace with
increasing jet output, expected to top 750 this year.
Boeing is increasing production of its best-selling 737 jetliner to
52 a month in 2018 from 42 a month currently, while introducing the
new 737 MAX.
At the same time, it has committed to delivering a successor to its
popular 777 wide-body plane, dubbed the 777X, by the end of the
decade. It is erecting a massive new building to house autoclaves
that will bake the new carbon-composite wings of the 777X, even
before it has firmly configured the jet's design.
With hundreds of airlines relying on aircraft from Boeing's
eight-year order backlog, any slip up could be very costly.
Analysts said they expected continuity for awhile, and then expect
Muilenburg to confront such thorny issues as the likely slowdown in
777 production as Boeing introduced the 777X; and development of a
new plane to replace the 757, a gap in Boeing's
product line that rival Airbus has adroitly exploited.
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"They are arguably the calls that need to be made" to help Boeing's
longer-term growth, analyst Robert Stallard wrote in a note to
clients, adding Muilenburg might also change McNerney's combative
tone.
McNerney presided over a near doubling of revenue to $90.8 billion
in 10 years as CEO. He drove hard bargains with Boeing's unions,
embittering many workers, and moved some 787 production to South
Carolina, an anti-union state. He also lifted Boeing's profit
margins by pressing suppliers to cut prices. Two-third of Boeing's
revenue now comes from commercial jetliners. Asked why Conner was
not chosen to head the company, both men praised Conner's skill. But
McNerney said Conner was closer to him in age, while Muilenburg, is
"a new generation."
He said CEOs need a "long run" to make decisions that will not
affect the business for five to 10 years. The transition was made
"with that in mind."
McNerney had been expected to stay on for Boeing's 100th anniversary
next year. He will remain on the payroll through February to smooth
the transition, and as chairman afterward.
"I will remain as chairman working with Dennis well into next year,
so I'll be around for the party," he said. "As soon as I start to
get in the way, I'll fade away."
(Additional reporting by Sweta Singh in Bengaluru; Editing by Leslie
Adler and Lisa Shumaker)
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