Tuesdays with Jim

A very relaxed McNerney took time out of his non-stop schedule to discuss Boeing 2014 and beyond.

“I feel very good about our business position. We firmed up the largest order in aviation history last week (Emirates for 150 777X) and our orders so far exceed last year,” he said.

And he was not fazed by Airbus’s claim that it would discount the new A330neo to compete with the 787. “Our strategy is to price for value – if they have to discount it, it possibly indicates it is not good value. We have spent a lot of time and effort developing the world’s finest aircraft [787] and we price for that value. ” “We are very strong in the widebody segment and we want to be the high technology provider. ” However, McNerney conceded that the 787 is not quite where the company would like it on reliability with some operators. “It is achieving 98. 4 per cent but some operators are getting 99 per cent while others are in the 97 per cent range. We would like to reduce that spread. ” “However, it is very similar to where the 777 was at the same time,” he added.

And McNerney is not concerned about the sluggish rate of sales of the 747-8 saying that it was always a niche aircraft and a great cargo plane. “We knew the capability of the big twins would grow. ” But he said that Boeing has a number of active campaigns underway for the ‘Queen of the Skies’.

He added that Boeing is comfortable with the production rate of 1. 5 per month and the company did not anticipate a significant reduction to that.

On pushing the virtues of the 787, McNerney said that Boeing had been sensitive to airlines’ problems during last year’s grounding but would now look to promoting the passenger features more aggressively.

And while Boeing says it will achieve much of what the 787 cabin offers with the 777X’s aluminium fuselage, McNerney sees new large aircraft being built of composites. “For the 777X the new engine and composite wing gave us a plane that our competitor will have a great deal of trouble replicating. However, over time the bigger the aircraft the more composites will work. ” On a new future competitor to the Boeing/Airbus duopoly McNerney sees China as the most likely. “I think they will be there. They have the finance, technical capabilities and home market. But when?” To combat this rise McNerney said that Boeing has to remain the technical leader. “The way to stay ahead is be a generation ahead. ”

The way to stay ahead is be a generation ahead. JIM MCNERNEY

And while Boeing is reversing the 787 production/design philosophy for the 777X, McNerney sees a robust international supply partner as critical for Boeing to grow the business over the coming decades. “You need capability on a global basis to support growth from an $85 billion company to $150 billion,” he said.

Getting back to his 65th birthday in August he quipped that anyone reaching that milestone would be in denial. However, McNerney is not interested in retirement and says that decision is up to the board. Boeing does have a 65 years of age retirement policy but that is selectively applied by the board. “I have no plans to retire but I am focused on building a succession team. ”