Test of wills: Boeing CEO McNerney gambles on strike

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New York, Sep 14: day in revenue, looks to be the biggest challenge in the CEO’s career.

Walter James McNerney Jr., who prefers to be called Jim, worked his way quietly into one of the most important positions in U.S. business. He came to Boeing after four and a half years at the helm of manufacturer 3M Co and a 19-year career at General Electric Co, where he lost out to Jeff Immelt in the race to take over from Jack Welch. His time in charge at Boeing has been relatively calm, after the company lost two CEOs in dubious circumstances.

Philip M. Condit resigned in December 2003 after it emerged that Boeing had improperly offered a high-paying job to the US Air Force’s No. 2 acquisition official. The successor, Harry C. Stonecipher, resigned in March 2005 when it was revealed he was having an affair with a Boeing executive.

After taking over in July 2005, McNerney moved quickly to clean up Boeing’s legal and ethical problems, settling long- running federal investigations into its procurement practices and illegal appropriation of Lockheed Martin Corp rocket program documents.

His leadership has coincided with a three-year boom in commercial plane sales and steady growth in U.S. defense spending. Last year, Boeing had a banner year, crushing rival Airbus with an industry record 1,413 plane orders and its highest-ever annual profit of $4.1 billion.

Despite those successes, Boeing’s shares have plunged about 36 percent in the past 12 months, compared with a 15 percent drop in the Standard & Poor’s 500 index, hit by the credit crisis sell-off, spiking oil prices, and worrisome delays on the 787.

“He’s not coming out smelling too much like a rose at this point, with problems on the 787 and not being able to reach an agreement with the workers,” said Nisbet. “But they (Boeing) are definitely right. They could be leading the aerospace industry down the same path of the airline industry and the auto industry if they didn’t take a stand.”