Boeing CEO defends job transfers, but experts question rationale (Engr jobs moved from WA to AL &SC)
Boeing Chief Executive Jim McNerney on Wednesday defended management’s plan to transfer thousands of engineering jobs out of the Puget Sound region, saying it’s aimed at “creating the strongest possible Boeing.”
But aerospace-industry experts were skeptical of his rationale for the strategy and warned of risks to the company’s future.
McNerney’s comments came during a conference call after Boeing reported a strong quarterly net profit of nearly $1?billion on sales of $20 billion.
The Boeing CEO acknowledged that the engineering-work transfers now in progress — which will result in a loss of more than 4,300 highly paid, white-collar jobs locally — are “controversial.”
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Most of Boeing’s commercial- airplane engineers are in the Puget Sound region, but last year management announced the establishment of new engineering “centers of excellence” in North Charleston, S.C.; Huntsville, Ala.; and St. Louis, as well as Southern California.
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“It’s been a long time since they had a surplus of legacy engineering talent at any of the places they acquired,” said Aboulafia. “They are letting costs drive decisions. You wouldn’t be doing this if it wasn’t for cost.”
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“I suspect the real motivation is to get rid of senior engineers, to weed out expensive people and replace them with junior people,” he said. “The bean counters think they can save money that way.”
Weber said moving engineering work away from the main assembly plants in Everett and Renton “goes against the so-called Toyota principle that you want to keep engineering and manufacturing close together.”
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“It takes several projects for an engineering team to really come together,” he said. A team lacking such cohesiveness inevitably produces big cost and schedule overruns, he added.
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But he said that even accepting such logic, the way management is carrying out the transfers — laying off people here, then inviting some to reapply for their old jobs at new locations — is counterproductive because it engenders such bad feelings.
“They are doing it in a very callous way,” said Hamilton.
http://seattletimes.com/html/businesstechnology/2023439701_boeingearningsxml.html
One of the comments points this out about Boeing's CEO:
In an article, "At 3M, A Struggle Between Efficiency And Creativity", Boomberg BusinessWeek, 10 Jun 2007, wrote:
"McNerney was the first outsider to lead the insular St. Paul (Minn.) company in its 100-year history. He had barely stepped off the plane before he announced he would change the DNA of the place. His playbook was vintage GE. McNerney axed 8,000 workers (about 11% of the workforce), intensified the performance-review process, and tightened the purse strings... four and a half years after arriving, McNerney abruptly left for a bigger opportunity, the top job at Boeing... his successors face a challenging question: whether the relentless emphasis on efficiency had made 3M a less creative company. That's a vitally important issue for a company whose very identity is built on innovation... 'If you take over a company that's been living on innovation, clearly you can squeeze costs out,' says Charles O'Reilly, a Stanford Graduate School of Business management professor. 'The question is, what's the long-term damage to the company?' "
In 2010, CNN's Money followed up in, "3M's Innovation Revival":
""many inside and outside 3M, including (3M CEO) Buckley , think 3M lost some of its creative juice under James McNerney, the acclaimed GE alum who led the company from 2001 to 2005 and is now CEO of Boeing. It's not that McNerney, the first outsider to run 3M, did a poor job. The company had become sluggish, and McNerney whipped it into shape. He streamlined operations, laid off 8,000 people, and imported Six Sigma management techniques... efficiency gains came at a price. Scientists and engineers griped that McNerney, an MBA, didn't understand the creative process... The company, as a result, had in place a goal to generate 30% of revenue from new products introduced in the past five years. By 2005, when McNerney left to run Boeing, the percentage was down to 21%, and much of the new-product revenue had come from a single category, optical films... ""
= new reply since forum marked as read
