It is hard to imagine that the launch of the Boeing (NYSE: BA) 787 Dreamliner could fall further behind than it already has. The number of delays is now nearly a dozen and the date on which the aerospace firm was supposed to deliver the plane to customers is two years late.

The delays have been caused by work stoppages, poor supply chain management, and weak product oversight. Those issues have come back to haunt Boeing again, and the only way to show customers and investors that the company is serious about resolutions is to dismiss long-time CEO James McNerney. He has been with Boeing since before work on the 787 began.

The Wall Street Journal reports that” Boeing Co. said it encountered another design flaw on its overdue 787 Dreamliner jet, and that the problem had been one of the factors that forced an ongoing five-week delay in shipments of fuselage parts.” A key part on the plane can fail if it is exposed to very hot or very cold conditions. It is just the kind of issue that should come up in complete product testing. Boeing says that the problem is “managable”.

The habit of many boards has been to shoot first and ask questions later when a CEO is blamed for operational problems at their company. This has certainly been true in Detroit and on Wall St over the last two years. But, beyond those industries and that period, CEOs are routinely dismissed for poor earnings or troubles created by their subordinates or even outside market forces that companies cannot anticipate or avoid.

McNerney falls into another category which is CEOs who are sheltered by their boards for too long to the detriment of shareholders. Over the last five years, all of them under McNerney’s leadership, Boeing’s stock is up just over 10%. The company’s dividend yield is a modest 2.4%. Investors would have been better in Treasuries over that same period.

What the Boeing board sees in McNerney is hard to tell, but they have begun to damage their own credibility as fiduciaries by keeping him

Douglas A. McIntyre

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