Albaugh’s Retirement Could Mark another Shift in Direction for Boeing Commercial Airplanes

 - July 2, 2012, 10:00 AM
Jim Albaugh served as Boeing Commercial Airplanes CEO for nearly three years. (Photo: Boeing)

A rather brief, trying but largely proud chapter in the rich history of Boeing Commercial Airplanes (BCA) came to an end last week, when Jim Albaugh announced he would leave the company, three years before its mandatory retirement age. Homegrown BCA sales chief Ray Conner immediately assumed the position of CEO, leaving Albaugh with the customary role of helping with the transition until he officially leaves the company on October 1.

Albaugh’s departure comes at a critical time for BCA, as it prepares for ambitious production rate increases among virtually its entire line of products and accelerates development of the re-engined 737NG known as the 737MAX.

While the official word from Boeing suggests nothing other than a completely voluntary departure by 62-year-old Albaugh, his immediate replacement with Conner at least seems abrupt, if not curious. Granted, some might consider Boeing’s response to the hot-selling Airbus A320neo somewhat slugglish, but, from the outside at least, Albaugh’s tenure appeared far from over.

An engineer by training, Albaugh assumed control of BCA from Scott Carson at the nadir of the company’s reputation for technical excellence. Only a week earlier, Boeing announced yet another schedule change for the 787, at the time already more than two years late, while the 747-8 suffered through its own set of travails, due, in part, to a shift in engineering resources to the ultra-high-tech, but troublesome Dreamliner.

When Albaugh moved to BCA from Boeing’s military division in 2009, he promised to restore an engineering-centric culture undermined in preceding years by what some might consider a clumsy effort to run the company more as a product “integrator” than a manufacturer. Reasonable people can argue whether or not he succeeded, but the certification of the 787 and 747-8 on his watch at least staved off an erosion of credibility suffered with each missed program deadline. Meanwhile, Albaugh proved instrumental in settling a potentially crippling labor dispute with the company’s Puget Sound-area machinists and wrestling away a U.S. Air Force contract for aerial refuelers from Airbus and Northrop Grumman.

Now, in choosing Conner, Boeing has turned to a 32-year company veteran known for both his technical acumen and his sales prowess. Widely credited for landing a groundbreaking $21.7 billion order for 737s from Indonesia’s Lion Air while serving as the company’s senior vice president of sales and customer support, Conner previously led BCA’s supply chain management and operations organization, which included overseeing development of Boeing’s new production and assembly facilities in South Carolina.

Conner joined Boeing in 1977 as a mechanic on the 727 program. He worked his way through the company’s ranks to become vice president and general manager of the 777 and 747 programs before accepting the post of vice president of sales for the Americas and Asia-Pacific regions and, later, vice president of sales for all of BCA.