The launch of Boeing’s 787 Dreamliner has been delayed so often that it would be comical except that the aerospace firm’s shareholders and customers are not laughing. Boeing trades at $50, down from more than $100 less than two years ago. Management has been appropriately blamed for most of the tardiness which has been caused by labor unrest, supply chain problems, and design flaws. Each time the delivery date was pushed back again, investors wondered why management was getting a vote of confidence from the board.

The vote of confidence period came to a head as Boeing said that the chief of the firm’s commercial airline business would leave his job a week from now. That is sudden, much more sudden than would be expected for a man who has been with the company for four decades. Scott Carson will be replaced by the head of Boeing’s other large division—defense. The person who will keep his current job although he should not is the firm’s CEO Jim McNerney, who has managed to produce shameful results without his board doing anything about it—other than dictating Carson’s departure.

In late 2003, Boeing announced that it would assemble the 787 in Everett, Washington, making that as close to an official beginning of the project to build the plane on a large scale as can be defined.  McNerney was passed over for the CEO’s job at GE (GE) at the beginning of the decade. After a brief stop at 3M (MMM) as CEO, he joined Boeing in June 2005. That puts all of the delays of the 787 launch in the period after he came to Boeing, which means that he is the one who should be leaving Boeing and not Carson.

McNerney, like most large American company CEO’s, is not held to any reasonably high standard of achievement. Five of Boeing’s board members joined after McNerney did. He surely exerted some control over the addition of each one of these people. Boards are loathe to throw out high-profile CEOs, and McNerney is an unlikely exception.

Carson on the other hand has only run the commercial aircraft operation at Boeing since 2006. He is responsible for what goes on in his part of the company as any division executive is, but the 787 project was well along when he was promoted. Carson may be complicit in the plane’s delay, but he can hardly be identified as the cause.

Carson will leave Boeing well-off. He made $5.2 million last year and will certainly receive a generous retirement package. He will not leave with his reputation intact because of the suddenness of his departure in conjunction with the ongoing problems with the 787.

McNerney will keep his job as Boeing CEO. He made $18.7 million last year, slightly less than the year before. Over the three year period when the 787 has been in real trouble this CEO has made $58 million, which is not what the Boeing shareholders deserve.

The anger over executive compensation has recently focused on Goldman Sachs (GS). A number of people there will make tens of millions of dollars this year. Their defense for being given that money is that Goldman is having a record year in terms of profits. Goldman’s shares have significantly outperformed the DJIA over the last year. Boeing’s shares have underperformed.

Goldman has a case, and a strong one, for its management being paid well. Boeing does not have a reason to keep its CEO. The company said goodbye to the wrong man. Boeing’s statements about the change barely disguised the fact that the company had one man fall on his sword and the CEO kept his job, received an enormous pay package and the Boeing plane is still grounded.

Douglas A. McIntyre

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