Boeing names 3M's McNerney new CEO

The Boeing Co. has named W. James McNerney Jr. its new chief executive, ending a three-month search by choosing a board member who had professed not to be a candidate for the job.

McNerney, 55, currently chief executive at 3M Corp., had long been rumored as the strongest outside candidate to lead Boeing.


	McNerney

The appointment concludes a search that began when Chief Executive Harry Stonecipher was forced to resign in March after the company learned that he was having an affair with a female Boeing executive.

McNerney, who has been on Boeing's board since 2001, ran General Electric's jet-engine business before his current role at 3M. He was approached early on, a person close to the board said, but it was not until about two weeks ago that he became a serious prospect.

It is awkward, though not unusual, for a longtime director to be considered for the chief executive post, the person said.

"Jim was asked right from the get-go if he would consider, and said, 'No, I owe my allegiance to 3M,' " an individual close to the board said last night. "But at the end of the day, they realized the best leader for their company was McNerney. The directors persuaded him to come to the plate."

Boeing insiders who had been considered for the top job included Alan Mulally, the Seattle-based president and chief executive of Boeing Commercial Airplanes, and Jim Albaugh, head of Boeing's space and defense business. Mulally will be 60 in August, five years from Boeing's mandatory retirement age, and that was previously reported to a possible factor working against him.

During an interview earlier this month with the Seattle Post-Intelligencer, Mulally declined to be drawn into a discussion about what he would do if passed over for the job.

"I love Boeing," Mulally said at the time. "I don't have any plans. I want The Boeing Co. to be strong because I love this place and what we do."

Reached for comment last night by the Chicago Tribune, Mulally reportedly said of McNerney, "He's a great leader, and we would welcome him to Boeing." The Tribune reported that Mulally would not comment further or confirm McNerney's appointment.

Boeing has been trying to improve its scarred image after Stonecipher's embarrassing departure and a long Pentagon inquiry into the company's defense business. Federal officials have been investigating Air Force contracts handled by Darleen Druyun, the former Air Force official who was convicted last year of giving Boeing special treatment on a tanker lease deal before she went to work for the company.

Publications including the Wall Street Journal, BusinessWeek, Chicago Tribune and New York Times last night reported McNerney's expected appointment, citing unnamed sources. Boeing spokesman John Dern declined to comment on the reports last night.

McNerney was Boeing's original choice to replace Phil Condit when the former chief executive left the company in 2003, according to reports at the time. McNerney declined, clearing the way for Stonecipher, the former McDonnell Douglas leader, to take the job.

Officials at 3M, a Maplewood, Minn.-based conglomerate that makes everything from Post-it notes to surgical equipment, did not immediately return a call for comment last night.

Earlier this month, Boeing Chairman Lew Platt said the board was down to a short list of "five or six" potential chief executives, including two internally.

Boeing's board also considered to varying degrees at least five candidates who came from outside the company in a list that reads like the who's who of the airline business. Among those considered were David Cote, chief executive of Honeywell; Karl Krapek, former United Technologies president; and Clayton Jones, Rockwell Collins chairman.

The board had also flirted with two other GE disciples of John Welch Jr.: David Calhoun, GE's airline division head, and Robert Nardelli, who left the company to take over at Home Depot.

In an interview with the Seattle Post-Intelligencer at the Paris Air Show this month, Platt said the company is now at the stage where it needs to begin planning for what comes after its still-in-development 787 jet.

"We have an excellent short- and medium-term strategy," Platt said at the time. "It is time now to begin to think about beyond the next four or five years."

Platt had confirmed that Mulally and Albaugh were both on the list, and denied reports that the job had been turned down by an external candidate.

WHO HE IS

W. JAMES MCNERNEY

3M CEO AND CHAIRMAN

Age: 55

2004 salary: $1,624,333

2004 bonus: $3,522,149

Prior experience: Before joining 3M in 2001, he was president and CEO of GE Aircraft Engines from 1997-2000. He had served as an executive in various capacities at General Electric Co. since 1982.

Boards: 3M, The Boeing Co. and Procter & Gamble Co.

SOURCE: FORBES

This report includes information from The Associated Press.

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