Boeing's Commercial Airplane Division Faces a Major Shake-upSeptember 02, 2009

 

Aerospace giant Boeing announced on August 31 a major management shake-up of its troubled airplane division, which has seen its 787 Dreamliner development beset by glitches and delays that are now affecting the company's bottom line.

Boeing said that Scott Carson, 63, would be stepping down as head of the Boeing Commercial Airplanes division starting September 1, but he'll remain with the company until January 1.

Taking the reins will be Jim Albaugh, who has been running Boeing's defense business since 2002, according to the Chicago Tribune. Dennis Muilenburg, 45, will take over Albaugh's vacated position.
The shakeup comes just days after the company said the 787 Dreamliner would fly its maiden test flight this fall, with delivery to its first customer, Japan's All Nippon Airways, in late 2010, the paper reported.

Rumors had been circulating for some time that Carson would retire after this first flight. But the big blow came from the mounting manufacturing and design problems that delayed the plane by nearly two-and-a-half years.

The delays and glitches have taken a financial toll on the company's bottom line. Boeing took a $2.5 billion non-cash charge against third quarter earnings in the process of writing off funds it has already spent to develop and build the first three 787s, after coming to the conclusion that it could not sell those models, according to the Tribune article. These planes, which are several tons overweight and packed with a "patchwork of design fixes," will be used for the test flights, the article noted.

Albaugh is an engineer by training and has worked at both the defense and airplane units. Analysts told the Tribune that he has extensive experience in developing and manufacturing complex systems. This experience is likely to help the company when it begins full production of the planes.