Monday, January 28, 2013

Would Alan Mallay Use the Verb, "Witchhunt?"

Boeing's 787, the Dreamliner, has been grounded worldwide because to fire worries with the lithium ion batteries used in it. According to the Economist's Schumpeter blog, the grounding "follows a string of safety problems, including two fuel leaks and an electrical fire aboard a domestic flight that required an emergency landing. There is particular worry about the potential for the plane’s lithium-ion batteries to catch fire."  Moreover the blog also quotes Sandy Morris of Jefferies who "points out that Airbus’s A350 (a forthcoming rival to the 787 which is already more than a year behind schedule) uses lithium-ion batteries like the ones suspected of causing some of the 787’s problems. So if they are to blame, the A350 programme may suffer too."

Jon Ostrower and JoAnn S. Lubin wrote in yesterday's Wall Street Journal that two very high profile CEOs have their names very firmly attached to the Dreamliner: Ford's Alan Mullay and Boeing's Jim McNerney, chairman and CEO since July 2005.

They write that in the summer of 2005, Boeing "hired Mr. McNerney as CEO, succeeding an interim chief after Mr. Stonecipher, who had resigned suddenly because of an affair with a subordinate. A short while later, Mr. Mulally, who had also been a contender for the CEO job, left.
"Boeing soon stumbled as a string of supply-chain and design delays pushed back delivery of the Dreamliner by 3½ years. 'We are trying to witch-hunt the issues in this program right now,' Mr. McNerney told investors in October 2006 as the problems became apparent."

I find it hard to believe Alan Mallay would have said that.  "Witch-hunt" does not sound like a word in his vocabulary.  In American Icon: Alan Mulally and the Fight to Save Ford Motor Company, Mullay's biographer, Bryce G. Hoffman, describes how he used the same techniques to turn Ford around that he used in managing projects like the 777. He built teams with his weekly "war room" meetings that thrived on a culture of both trust and accountability.  Hard bitten, cynical Detroit executives took his "aw shucks" Midwestern manners for weakness.  That did not last long. Those veterans of cutthroat corporate politics soon learned to either cooperate and be up front or play their political games somewhere else.

It would be interesting to learn how McNerney's management style differs from Mullay's.  It would be interesting to learn which style works better across the teams of engineers and managers from Boeing and its suppliers.

Hiring McNerney from the outside was forced on Boeing by the Department of Defense after successive scandals.  Military work is the other half of Boeing's business.  Such government induced changes in management can have unforeseen consequences.  Think of AIG after New York State's Eliot Spitzer forced Maurice R. Greenberg out in 2005.  It is hard to imagine Greenberg letting his trading desk get as out of hand as his successor did.  The subsequent near collapse of AIG and its bailout are now history. 

In this video from January 24th, Ostrower tells the Journal why both McNerney and Mulally have much at stake:

Spirit, as a big supplier of the Deamliner, is of course vulnerable to the plane's troubles.  we here in Wichita hope for a speedy resolution.

No comments: