Breaking: Scott Carson retiring from Boeing on 12/31/09, James Albaugh to take over BCA

As I reported on this blog last week I heard rumors that Scott Carson may retire from Boeing. Well the rumors were correct and Boeing announced Carson's retirement effective at the end of this year. Boeing IDS (Integrated Defense Systems) Head James Albaugh will take over Scott Carson's role as head of BCA effective September 1, 2009. Dennis Muilenburg will take over Jim Albaugh's role as head of IDS also effective as of September 1, 2009

Given the delays to the 787 program this is not much of a surprise and it may not be the last reshuffling of BCA management. I expect more turnover both within BCA and the 787 program. However, much of this probably won't happen until after the 747-8 and the 787 both have started their test flight programs.

Read Boeing's announcement below:

Boeing Executive Scott Carson Announces Retirement; Albaugh Named Commercial Airplanes Leader, Muilenburg to Head Integrated Defense Systems

CHICAGO, Aug. 31 /PRNewswire-FirstCall/ -- Boeing Commercial Airplanes President and CEO Scott Carson announced today that he will retire from the company at the end of the year.

Boeing Chairman, President and CEO Jim McNerney has named Jim Albaugh, 59, to Carson's leadership role at Boeing Commercial Airplanes (BCA), and Dennis Muilenburg, 45, to succeed Albaugh as president and CEO of Boeing Integrated Defense Systems (IDS). Both appointments are effective Sept. 1.

Carson, 63, has led BCA since 2006 after two years heading up the unit's sales organization, where he was credited with reinvigorating sales of Boeing commercial airplanes and related services to airline customers and leasing companies around the world. He previously served as BCA's executive vice president and chief financial officer, where he led the finance and business strategy organizations, as well as information systems and services. He also held leadership positions in the company's defense business and was the first president of Connexion by Boeing.

"The Boeing board of directors and I appreciate Scott's long record of accomplishment across many disciplines, functions and businesses, and the enduring contributions he has made to Boeing through 38 years of service," said McNerney. "Thanks to his leadership and operational experience, Boeing Commercial Airplanes has performed extremely well in a tough business environment and remains positioned solidly for continued market success."

McNerney said that Carson and Albaugh will work together to ensure a smooth transition of customer and other business relationships, and that Carson will also assist on special projects for the company through year end. He will continue to lead the United Way of King County's 2009-2010 fund-raising campaign, even after his retirement.

Albaugh, a 34-year company veteran with extensive experience in development programs and manufacturing, has led Boeing's defense, space and associated services businesses since 2002. Under his leadership IDS revenue has grown from $25 billion to an expected $34 billion in 2009, and now accounts for roughly half of Boeing's annual sales. Prior to his most recent assignment, he led Boeing's growth in space and communications, including network-centric operations, global missile defense, combat systems, and system-of-systems technologies. He began his career with Rockwell's aerospace and defense businesses, which Boeing acquired in 1996.

"Jim is a seasoned and effective aerospace executive with substantial experience leading and integrating technically complex businesses and programs from initial development through full production and delivery. His program management and engineering focus will help ensure the success of BCA's key development and production programs," McNerney said. "On top of that, as a Washington state native and the leader of more than 9,000 IDS employees working in the Puget Sound region, he is familiar with the people, issues and programs in the area. He is the ideal leader for BCA at this time," he added.

Muilenburg moves to his new position from Integrated Defense System's Global Services & Support unit, where he served as president of the $8 billion business that provides global after-delivery support for military platforms and systems, as well as a broad array of defense and government services. Prior assignments include leadership of the Combat Systems Division and Future Combat Systems, the company's development program for the U.S. Army. He also led the overall engineering development of Boeing's program to modernize global air traffic management systems.

"Dennis is ready to step up and lead the IDS team," said McNerney. "His experience in technology integration; track record delivering large-scale programs on time and budget; and work with customers in new, developing markets will help us generate new momentum and long-term growth," he added.

Albaugh holds bachelor's degrees in mathematics and physics from Willamette University, and a master's degree in civil engineering from Columbia University. He will relocate soon to the Seattle area.

Born in Iowa, Muilenburg earned a bachelor's degree in aerospace engineering from Iowa State University and a master's degree in aeronautics and astronautics from the University of Washington. He will continue to be based in St. Louis and spend substantial time in the Washington, D.C. area.

A replacement for Muilenburg will be named at a later date.

KC-787, pros and cons

Yesterday soon after I fell off my chair when the GAO recommendation came out and the dust had somewhat settled, I got to thinking what can Boeing's possible actions (or reactions) to what looks to be the KC-X rebid. Trolling the forums many people including myself said that it could be the 777 and/or the 767.

Then I really got to thinking, why not the KC-787, a tanker based on the 787? Jon Ostrower told me that a KC-787 would absolutely destroy the KC-30 in a tanker competition (depending on the selection criteria that the Air Force puts out).

So here are the pros and cons of Boeing doing the a 787 tanker.

PROS

Well in a nutshell, take all the advantages in weight and fuel efficiency that the 787 has over the A330 and translate that over to the tanker version. The 787 would be larger but lighter than the A330. Boeing can utilized the advantage of better fuel burn and the lighter structure of the 787. The 787 would have a more advanced and modern cockpit compared to the A330. The 787 would beat the A330 on range, usable cargo carried (fuel and/or cargo), and weight. The KC-787 would certainly demolish the KC-30 on life cycle costs and this metric can certainly make the Air Force stand up and seriously look at the 787 as a tanker.

Secondly, because Boeing would probably have to strengthen the 787 in order to carry the weight of fuel and other cargo required by the Air Force as well as a cargo door, Boeing would essentially have designed the 787F. Wow two birds with one stone though Airbus certainly would have a lot to say about DoD Tanker money going to design a commercial cargo aircraft.

Lastly, the Air Force would not have to modify airfields due to the weight of the 787 vs the A330 which is heavier. This was a bone of contention with Boeing as the Air Force underestimated the cost of modifications in operating the KC-30 from existing airfields.

CONS

Production - Boeing is already suffering from the production problems with the 787 and then the ramp up of production is looking to be long and painful. They would have no capacity at all to build tankers based on the 787. In order to do so would require 1) additional investment by Boeing and its suppliers to support increased production of the 787 (more autoclaves, larger facilities, more LCFs), 2) a second assembly line that is ITAR compliant. Now the Air Force would probably take anywhere from 12 to 24 tankers a year meaning a rate of 1 to 2 airplanes, these airplanes can be constructed on the existing assembly line but that would mean up to 2 less commercial 787s being delivered to customers who would none too pleased about their delivery slots going to the Air Force. A second line would be required and later can be used to support commercial production if needed.

Development - Boeing will need significant investment in terms of time, money, resources and personnel to turn the 787 from a commercial passenger aircraft into a military air refueler. Right now they're still grappling with the fall out from the production and supply issues that hurt them over the past year. They will still need a lot of these same resources in order to finish the 787-8 development as well as to develop the -3, -9 and -10 variants for commercial customers. Now since this product would come from Boeing IDS, it is possible to transfer engineering resources from the KC-767 and to work on the KC-787 along with a few of the 787 program engineers. Boeing had earlier transfered some engineers and other resources at IDS to the 787 to help alleviate the issues due to the travelled work and production problems. They could do this again to help develop the 787 into a tanker platform.

Boeing might need to develop a new refueling boom (though I wonder if they could adopt the KC-767 boom for the KC-787) as well as floor strengthening and perhaps landing gear strengthening.

Lastly, timing - the Air Force needs these tankers 4 years ago. There would be little to no timing to get a KC-787 design, tooling, and production going. My guess is that it would take up to two years to get the design going and then another 2-4 years for development, testing and operational evaluation. This on top of doing the rebid (which I think would take another 2 years). So assuming the rebid takes place and that Boeing wins the rebid with the KC-787, it would be another 6 to 8 years before a KC-787 is in the hands of USAF pilots. The KC-30 won't certainly take as long.

These are some broad brush strokes...no details...those can be filled in by people who would certainly know better and more information but the KC-787 might be an option that Boeing can look at if they can effectively reduced the risks, timing and costs of doing a KC-787.