June 27, 2012
Credit: Photo: Boeing
James Albaugh, a 37-year veteran at Boeing who has been a management leader in all of the company’s product markets — space, defense and airliners — will retire as president and CEO of Boeing Commercial Airplanes (BCA) on Oct. 1.
Boeing Chairman and CEO James McNerney has named another company veteran to succeed Albaugh. Executive Vice President Raymond L. Conner joined Boeing 34 years ago as a mechanic and currently heads its global sales operations.
Conner has long headed a short list of likely successors to Albaugh, although the switch was not expected now. When Albaugh stepped into the post it was held by Scott Carson, another previous top salesman.
At a gathering of employees, Albaugh said he had three big goals when he transferred to Seattle from Boeing’s defense and space division in 2009. At that time BCA was in turmoil on its manufacturing, labor and product fronts, so Albaugh sought to smooth relations with the International Association of Machinists and Aerospace Workers, which had staged a bitter two-month strike in 2008. He also wanted the company’s 787 widebody jet and 747-8 upgrade programs to complete flight tests and begin deliveries, and aimed to beat back a challenge by EADS to win the U.S. Air Force’s KC-46A tanker competition.
Under his leadership, the company succeeded in all three of those goals, and most recently launched the re-engined 737 MAX effort to respond to Airbus’ own re-engining campaign, the A320NEO.
As difficult as righting BCA’s manufacturing efforts were, smoothing out its labor relations also was a top priority. “The relationship between the company and the union is the best I’ve seen in years,” says IAM District 751 President Tom Wroblewski, who negotiated a four-year contract extension last year that bought Boeing labor peace until 2016. He credits Albaugh and Conner, as his deputy, as “absolutely” essential in helping to pull the negotiations together.
At 62, Albaugh is barely a year younger than McNerney, who will turn 63 later this summer, which makes Albaugh unlikely to succeed him. Boeing has a mandatory retirement policy for senior executives at age 65, although the board of directors can waive it.
His retirement leaves Albaugh young enough to move on as a top pick. “He has an enviable track record and resume,” says long-time industry consultant Tom Captain, leader of Deloitte LLP’s global aerospace & defense practice. “He spent all those years in space systems, he has leadership in defense and knows the Pentagon and military well, and now commercial. How many people in aerospace have his resume?”
Conner’s resume is nearly as broad. He has headed sales and marketing since August 2010 but also has led the 777 program and BCA’s vast supply chain — key job skills for someone who must shepherd the company through the second half of the biggest productivity increase in its history.