Boeing's Mr. Nice Guy: Alan Mulally steps into the limelight
Seattle Times aerospace reporter
But the effervescent Mulally may soon find his upbeat ways and his standing among the rank-and-file tested, when he succeeds Chairman Phil Condit as Boeing's top executive - and its biggest target for critics - in the Puget Sound area.
When Boeing relocates its world headquarters this August to Chicago, Dallas/Fort Worth or Denver, Condit, President Harry Stonecipher and other top corporate leaders will leave Seattle as well. Until now, the cerebral, sometimes stoic Condit and the blunt-spoken Stonecipher have borne the brunt of public criticism - especially from their own employees. During a 40-day strike last year, for instance, Boeing's Puget Sound-area engineers vilified fellow engineer Condit as a corporate sellout and Stonecipher as Darth Vader.
Mulally, who built his career on consensus, not confrontation, is taking over at a time of falling aircraft orders and rising anxiety among Boeing workers. Employees question the depth of Boeing's commitment to continue building airplanes in the Seattle area, worrying that the company will siphon off more and more work to U.S. and foreign contractors. Not even the Sonic Cruiser, Boeing's latest proposed airplane, will necessarily be assembled in the Puget Sound area; Mulally says it will be built here if the job can be done competitively.
All this uncertainty could boil over in a big way next year when Boeing begins labor negotiations with the aggressive International Association of Machinists, its biggest union. Meanwhile, Boeing expects orders to fall by nearly a third this year as airlines hold back purchases amid a slowdown in the world economy. Aircraft manufacturing is a mature, cyclical business, and that's one of the reasons Boeing cited in announcing its desire to move its headquarters as it branches out into new ventures.
So as Alan Roger Mulally steps into the spotlight, many are asking: Who is he, and is he up to the task?
Mulally, 55, is an aeronautical engineer whose abundant energy so impressed Herb Kelleher, the exuberant chairman of Southwest Airlines, that Kelleher likens Mulally to a nuclear reactor. Fresh out of college in 1969, with bachelor's and master's degrees in aeronautical and astronautical engineering, Mulally joined Boeing for what would become an award-winning career. He has worked on every Boeing jetliner, including the defunct Supersonic Transport and the ground-breaking 777, on which he succeeded Condit as program manager and which is now the world's best-selling twin-aisle jet.
Frequently named as a possible successor to Stonecipher when Stonecipher retires next year, Mulally's many citations include engineer-of-the-year awards from both Boeing and a nationwide professional group, and a "lifetime achievement" honor given in 1996 by the American Institute of Aeronautics and Astronautics.
Mulally landed his job as head of the Commercial Airplane Group three years ago. His predecessor and rival, Ron Woodard, was ousted during an internal struggle over where to place blame for production problems that led, in 1997, to the company's first financial loss in 50 years.
Some say Mulally's performance since then proves the promotion was more than opportune.
"He is extraordinarily charismatic. He really believes in working together," said Jim Jamieson, executive vice president of airplane programs and a top Mulally lieutenant in the fall of 1998. "He has a way of making people feel good about themselves."
Mulally took over his division at a particularly traumatic time. The company had tried to double production rates overnight to cope with a surge of orders, many secured with deep discounts. Shortages of parts and experienced workers forced Boeing to temporarily halt production -- agitating airlines and infuriating shareholders. The commercial-airplanes group lost $1.6 billion in 1997, despite selling $24.5 billion worth of jetliners. Boeing's stock became known as the Dog of the Dow the following year.
Mulally's first task was to gather and share data about every facet of Boeing's operation: inventory, parts costs, overtime, plane-assembly time. He began holding all-day problem-solving and strategy sessions every Thursday, from 8 a.m. into the evening. As many as 75 people - sometimes more - would pore over 200 or 300 charts.
It wasn't long before Mulally began streamlining, cutting jobs and looking to outsource work.
Barely a year after Mulally's arrival, the commercial-airplanes group was comfortably back in the black, possibly saving Condit's job. By the end of 1999, Boeing had produced a record 620 planes and managed to subdue investors' ire.
"If you look at where Boeing was 30 months ago and where it is today, it's a remarkable story," said Joe Gullion, who left Boeing earlier this year as president of its airplane-services division. "I sat and watched it. I give whole credit to Alan."
Out of Condit's shadow
Mulally said he's ready to be Boeing's chief honcho in the Puget Sound area.
"I'll be the CEO" for the region, Mulally said, as he sat for an interview in his fifth-floor office suite at the Longacres complex in Renton. "I hope I become an integral part of this community and this state."
Condit, whom Mulally considers a mentor, said Mulally will have wide autonomy to run his division - Boeing's largest, generating 60 percent of the company's revenues. But major investment decisions, such as whether to launch a new airplane - or to kill one - will have to pass muster with top corporate executives as well as Boeing's board of directors.
Already, there are signs that Mulally is stepping out from under Condit's shadow. When Boeing announced last week that it was canceling the 747X jumbo jet program and developing a super-fast jet instead, it was a beaming Mulally who unveiled the picture of the Sonic Cruiser. Condit stayed at his office on East Marginal Way South.
"Historically, I might have been making the announcement or been there," Condit said.
Yet for a man whose division does $32.2 billion in sales - enough to outrank 451 companies on the Fortune 500 - Mulally is surprisingly little known among the Seattle area's civic and philanthropic movers and shakers. Except for the Museum of Flight and a Greater Seattle Chamber of Commerce leadership program, the only civic activity Mulally cites is his work with the Woodland Park Zoo. Leaders of The Seattle Foundation, the Rotary Club of Seattle and the Corporate Council for the Arts were barely acquainted with Mulally or not at all, although all said they were eager to know him better.
Mulally hasn't registered as sharply on the local radar as John Warner, Boeing's chief administrative officer, who has been the company's main ambassador in the community. Warner, who oversees the company's charitable giving, serves on the boards of the Chamber, the Alliance for Education and the Pacific Science Center, among others. Warner will relocate when the headquarters moves, but he plans to maintain a Seattle office.
Mulally said he is eager to build on Boeing's legacy in the community. The business environment, education and community organizations such as the United Way are among the causes he's most likely to get involved in, Mulally said.
Mulally may become Condit's proxy in Seattle, but their styles in some ways contrast sharply. Even though he's just four years younger than Condit, Mulally's rosy cheeks and his gregariousness belie the closeness in age. He plays tennis well enough to have once considered making a living at it, and still looks like a player.
Condit, by contrast, is a genial, if rumpled, professorial type. He and his wife, Geda, lead a jet-setting life, as Condit's business obligations keep him in the air constantly. Mulally tries to spend weekends at home on Mercer Island with his wife and children. His executive assistant, Kay Sigmund, knows to schedule business appointments around important family events. Mulally and his wife, Nicki, a former elementary-school teacher, spend every Saturday night alone, usually just eating out. In nearly 31 years of marriage, Mulally estimates, he has missed only a dozen of these Saturday dates.
No need for charm school
One trait Mulally and Condit share is their emphasis on teamwork and on making personal gestures. In January, Boeing honored one of its best customers, United Airlines, for taking delivery of its 50th 777 jet. About 30 Boeing and United executives dined at Belltown's El Gaucho restaurant, where chateaubriand for two tops the menu at $92.
The highest-ranking Boeing executive there was Ron Ostrowski, general manager of the 777 program. Partway through the fancy dinner, Mulally bounded in unexpectedly, clad in his trademark red windbreaker. He appeared so casual that United's new chief information officer mistook him for a Boeing engineer or a pilot.
"Alan does not need to go to charm school. A lot of executives need to," said Gordon McKinzie, United's manager of new aircraft, who attended the dinner. "Alan could probably teach them."
Jan Roskam, Mulally's engineering professor at the University of Kansas, said it was evident even in college that Mulally was "a born manager." At annual expositions put on by engineering students, Mulally always ended up as one of the leaders, and got people to have fun, Roskam recalled.
Despite his steady, rapid rise inside Boeing, Mulally says he wasn't particularly ambitious when he arrived at the company. He says he "never lobbied for a job" - and even turned down one key post. That was an unexpected offer he received from Stonecipher shortly after Stonecipher left Sundstrand in 1994 to become president of McDonnell Douglas. Mulally's now glad he was gracious in turning down the man who later became his boss anyway, after Boeing bought McDonnell Douglas in 1997.
A former Boeing executive who knows Mulally well contends Mulally simply conceals his hunger for power.
But Frank Shrontz, who retired as Boeing's chairman in 1997, puts it differently:
"He was ambitious, but I never saw that in a negative way," Shrontz said. "I don't feel he pandered to the board or the management."
His easygoing manners not withstanding, Mulally guards his image carefully. He's picky about photographs of himself, favoring a shot taken inside a 777 at least five years - and three promotions - ago. During one interview, Mulally bounds out of the room midthought then returns with a Boeing shopping bag containing videocassettes of a five-hour TV series on the making of the 777. The bag also holds a companion book to the TV show and a paperback copy of "Leading People," a book about organizational success that includes a chapter on Mulally.
The material, Mulally says half-jokingly, must be studied before his profile can be written.
He carries off the move with a smile and a handshake. But the affable gesture delivers an apt message:
If you haven't done it yet, it's time to get to know me.
Kyung Song can be reached at 206-464-2423 or firstname.lastname@example.org.