Boeing Co has recently announced that it is re-organizing its commercial-jet unit operations to cut overhead costs.
This recent move of the airplane manufacturer could have been induced by the fierce competition of Airbus Group SE, its European rival for decades. It has continuously eroded Boeing's market share and made commercial airline companies look for lower jet prices.
Ray Conner, the company's Commercial Airplane Chief Executive announced in February that it wants to reduce operating costs and eliminate executive management layers "to lean out our structure from the top down while continuing to perform on our development programs and keep our delivery commitments to customers."
The airplane maker is also working to offset the steep development and production cost of its 787 Dreamliner and sustain its projected goal of regaining almost $30 billion in deferred costs from producing the initial aircrafts which are about several hundred units.
As part of company restructuring, Elizabeth Lund, the general manager of Boeing's 777 program will supervise the combined operations for the 747 and 767 aircraft. The general managers of these divisions will also assume new roles and will report to Lund.
Conner also stated that this new set up "will give airplane programs a more direct link to the leadership team and strengthen ties between the manufacturing and operations parts of the business."
These initiatives came after the promotion of four Boeing executives last week. Those promoted include Pat Shanahan and Scott Fancher. The two will share duties formerly handled by John Tracy, the previous Chief Technology Officer who has retired. Shanahan's previous post as airplane programs senior VP will not be filled.
"Given the competitive environment we face, it makes sense to realign our leadership in a big-picture way instead of making piecemeal adjustments," said Conner.
This management reshuffling also eliminates the executive link between Boeing's chief executive of commercial units and the production operations of the company's five commercial jet programs.
