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Section: Boeing

Head of Boeing's commercial airplane unit to retire

DOMINIC GATES

The head of sales, Ray Conner, 57, will replace him immediately.

The switch replaces a champion of Boeing’s engineering prowess and the capabilities of its production workforce with a Seattle-born executive who has climbed through the ranks of the company from mechanic to top gun.

In September 2009, Albaugh, then head of the company’s St. Louis, Mo,-based defense division, was brought in to lead the commercial airplane unit and soon established himself as an advocate for Boeing’s internal talent.

Dealing with the aftermath of costly delays on the 787 Dreamliner program, Albaugh repeatedly made public declarations that Boeing had made serious mistakes in outsourcing too much of the 787 work and that it would in future do more in-house.

Since he arrived in Washington state, Albaugh has lavishly praised the Puget Sound-area workforce and said this region will remain the center of gravity of Boeing’s commercial airplane operations.

But shortly after he came in, it was Albaugh who made the final recommendation to the Boeing board in Chicago that a second 787 assembly line should be in North Charleston, S.C., not in Everett, Wash. Conner accompanied him on that presentation to the board. Conner was hired by Boeing in 1977 as a mechanic on the 727 program.

Shortly after he started work, he joined his International Association of Machinists workmates in a 45-day strike. But within a couple of years, Conner had taken classes, joined management and begun to rise through the ranks.

In recent years as a top executive, Conner has been a key leader in the company’s labor negotiations, drawing on his experience as a former Machinist to establish relationships with union leaders.

Both Albaugh and Conner were deeply involved last year in reaching the historic agreement with the Machinists that secured the 737 MAX for Renton, Wash., and an extended period of labor peace for the company.

When Conner was appointed head of sales in 2010, the move was widely interpreted as a clear signal that eventually he would head all of the commercial airplane division and, one day, all of Boeing.

Boeing deliberately rotates its top executives through many areas of responsibility to nurture talent. Few have a resume with the breadth of experience around the company to compare to Conner’s.

Before leading global sales, Conner was responsible for the commercial airplane division’s worldwide external supply chain as well as Boeing’s in-house fabrication divisions. From 2008 until 2010, he was in charge of the extensive development of the manufacturing site in South Carolina.

Earlier, he had sales stints in the Americas and Asia Pacific regions. He also built airplanes, managing both the 777 and 747 programs. He also headed the unit that develops engine systems and spent some time in financial oversight roles.

"Ray’s breadth and depth of experience in commercial airplanes is unmatched in our industry," said Boeing Chief Executive Jim McNerney in a statement.

"He has built airplanes, sold airplanes, serviced airplanes, managed our largest programs, knows our customers extremely well, and is respected by our employees. He is the natural next leader of our growing commercial airplanes business and this move is consistent with our executive succession plan."

Both Albaugh and Conner are natives of Washington state.

In a note to employees Tuesday, Albaugh recalled his first note to them when he took over in 2009.

"Growing up in Eastern Washington, I remember watching the contrails from 707s and B-52s flying overhead. As I grew older, I recognized the great significance of these aircraft," Albaugh had said then, adding that he believes "Boeing did more to change the 20th century than any other company on earth."

His message on Tuesday urged employees "to continue to live up to the tremendous legacy of Boeing, a great company that does great things."

In his message to employees as he took over, Conner spoke of "a bright future" and said Boeing is positioned "for an extended period of growth and renewed industry leadership."

"As I see it, our job going forward together in the near term is to stay the course on the product and services strategies that have resulted in our record backlog, and to turn up the gain on performance and execution to ensure we meet our commitments, fund investments in new products and technologies, and strengthen our competitiveness for the long haul," Conner wrote.

"We’re all part of a long and distinguished history. Those who came before us achieved greatness," he added. "Your passion and commitment will be responsible for extending that legacy."