Realignment Heralds Critical Period for Boeing Commercial

AIN Air Transport Perspective » December 10, 2012
Scott Fancher now leads Boeing Commercial Airplanes’ new Airplane Development organization. (Photo: Gregory Polek)
December 10, 2012, 10:15 AM

While the realignment of Boeing Commercial Airplanes’ management structure last week might have marked something less than a revolution in its approach to program development, it certainly signaled a recognition that something fundamental needed to change. Over the next 18 months Boeing expects to increase output across its commercial product lines by 25 percent while it manages no fewer than five development programs. Still smarting from the three years of delays to the 787 program, Boeing appears unwilling to risk any further loss of credibility, at least due to its own organizational shortcomings.

In an open letter to all employees issued last Monday, Boeing Commercial Airplanes CEO Ray Conner announced the establishment of a new organization called Airplane Development, led by 777 program manager Scott Fancher, to run in parallel with Airplane Programs and Commercial Aviation Services.

“Successfully balancing our production and development priorities is critical to our future viability and success with customers,” wrote Conner. “I’m announcing a new organizational structure for Commercial Airplanes, effective immediately, that incorporates best practices and provides better line of sight for both our development and production programs. This framework will help clarify responsibility, streamline decision-making and accelerate our progress on these priorities. In addition, it will improve our focus on quality, efficiency and affordability throughout the life cycle of our products and services.”

The newly formed organization now leads the design, development, testing and certification of the new airplanes and/or derivatives, namely the 737 Max, 767 Tanker, 787-9 and the still unlaunched 787-10X and 777X. Airplane Programs, under the continued leadership of senior vice president Pat Shanahan, oversees the management of profit and loss for each program and the production integration of the development programs. Commercial Aviation Services, led by Lou Mancini, continues to lead the services-and-support business for Boeing Commercial Airplanes.

The change in management structure came just as federal mediators joined Boeing and the Society of Professional Engineering Employees in Aerospace (SPEEA) in their contentious contract negotiations. The National Labor Relations Board (NLRB) heard testimony last Wednesday and Thursday on an Unfair Labor Practice charge SPEEA filed last month to compel Boeing to provide economic data it calls “necessary for productive progress” in the negotiations and stop the company from threatening employees with discipline for engaging in union activities. On Thursday the Federal Mediation and Conciliation Service called for the suspension of all talks until after the first of the year. Both Boeing and SPEEA agreed to comply.

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John Darbo
on December 10, 2012 - 11:06am

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