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Wednesday, October 17, 2007 - Page updated at 12:00 AM

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787 visionary out; new chief must make it fly

Seattle Times aerospace reporter

Pat Shanahan

The new general manager of the 787 program has experience in commercial airliners, although his latest post was in missile defense.

Age: 45

Education: B.S. in mechanical engineering, University of Washington (1985); dual M.S. degrees in engineering and management from MIT's Sloan School of Management (1991)

Career path: Joined Boeing in 1986; previously led 757 and 767-400ER programs; moved to the defense side in April 2002, taking charge of the rotorcraft programs in Philadelphia, with responsibility for Apache and Chinook helicopter programs and the revolutionary V-22 Osprey tilt-rotor airplane; took over company's ballistic-missile-defense program in December 2004.

Personal: Married with three children.

Sources: Boeing, University of Washington College of Engineering

Boeing's surprise ouster of 787 program chief Mike Bair on Tuesday was hailed by some industry observers as the tapping of a fresh leader who can mop up the mess behind the six-month delay announced last week.

Others saw it as a sign that the 787's problems run deeper than Boeing has admitted.

The removal of Bair, 51, deflects the rocketing career arc of a man seen as a leading candidate to head Boeing's commercial division some day. He led the Dreamliner program from its conceptual stage to the unprecedented sales success before its first flight, now expected next spring.

For his replacement, Pat Shanahan, 45, the new position is a glorious opportunity, as well as a return home to Washington state and to the commercial-airplane business. Shanahan will transfer from Washington, D.C., where he's been heading Missile Defense Systems.

Last week's delay pushed out the Dreamliner's first flight until the end of March and the first customer delivery until the end of 2008.

Boeing spokesman John Dern said Tuesday's executive move puts in place a leader with direct experience running "technically demanding and complex programs that involve working with partner suppliers" — the sort of supplier tangles that have dragged the 787 program behind schedule.

But Shanahan never has led a new-airplane program.

Morgan Stanley analyst Heidi Wood called replacing Bair "the right call for the 787."

"Mike Bair has done a solid job quarterbacking the program, with 730 orders in backlog," Wood wrote in a note to clients. "Now, however, it's down to program execution, and completing a myriad of in-the-weeds issues, which points to a person with 'devil in the detail' strengths."

The stock market reacted positively, too. After a slide of more than $7 last week, Boeing's shares closed Tuesday up $1.11.

But hearing the news Tuesday morning at an airplane conference in the Westin Hotel, aviation analyst Scott Hamilton of Leeham.net was more skeptical.

"One guy can't just wave his hand and fix the program," Hamilton said. "Nobody I've talked to believes they can do it in six months. Everyone I've talked to believes there'll be another delay."

"Someone had to take the fall for a program that's in disarray," Hamilton added, referring to production problems at Boeing's major supplier partners that caused the first couple of airplanes to arrive in Everett incomplete and required the final assembly steps to be done out of the normal sequence.

Still, Hamilton said he believes the globalized supply chain likely will work well once Boeing irons out the production system.

Robert Stallard, an analyst with Bank of America, warned that there's a downside to moving out the man who shepherded the 787 Dreamliner through early production of the jet's innovative carbon-fiber plastic airframe.

"A significant body of knowledge will depart with Mike Bair, and it will take time for Mr. Shanahan to get up to speed on the program," Stallard wrote.

Boeing said neither Bair nor Shanahan was available for interviews.

Shanahan "a great guy"

Shanahan, a Washington state native and a University of Washington engineering graduate, joined Boeing in 1986. He worked on the 757, 767 and 777 programs.

One Machinist union member remembers him well from the Auburn fabrication plant, where he became director of the tooling division in 1995.

"He's a great guy," said the machinist, who asked not to be identified for fear of appearing too friendly to management. "He was very friendly. He'd try to show you how things were."

When there was a problem that needed solving, the machinist recalled, Shanahan walked him around the factory floor, introducing him to people who could help and telling him how he could approach the issue.

"He tried to make everybody a partner," the machinist concluded. "He was a heck of a leader."

Shanahan's most recent position put him in charge of a unit that had been struggling.

Boeing's missile-defense unit is developing several complex technologies, including a ground-based system of missile interceptors and an airborne laser program.

Various pieces of the ground-based system are developed by several major defense contractors. Boeing must integrate the many technically complex and distinct elements. But critics have said the technology simply won't work.

Recently, though, Boeing has been trumpeting some successes, including a missile interception in a test last month.

Bair had been a star

Bair had been considered a star executive, and he can claim credit for the success of the 787 so far.

In an interview last spring, former Boeing Commercial Airplanes (BCA) chief executive Alan Mulally — now CEO at Ford Motor in Detroit — said he was one of Bair's mentors at Boeing.

At work, Mulally said, Bair is "a proven performer," a strategist who "looks around the corner, looks at the trends, ... looks at the way the world is going to change."

And socially, Mulally said, "He's sincere. He's thoughtful. He's fun. He's very grounded. No airs. Just a terrific human being."

Mulally recalled one of his regular Thursday executive meetings early in the 787 program when Bair began his report with bad news: "We had a little campfire last night."

An inspector at 787 supplier Janicki Industries in Sedro-Woolley, which makes high-tech molds out of carbon-fiber composite for production of certain fuselage sections, had left a wooden crate inside an autoclave — a high-pressure oven — then walked out and switched on the oven to bake the mold to hardness.

The wood, then the fuselage mold, caught fire. Everything was ruined.

But Mulally was impressed by Bair's sang-froid.

"He made it OK that things like that can happen, and you just have to deal with it," Mulally said.

Because Bair led the 787 program since its inception in January 2003 — a role that Mulally had filled in the early 1990s on the 777 program — he was considered a leading candidate for the top job at BCA when current Chief Executive Scott Carson reaches retirement age in four years.

Mulally confirmed that Bair, who started out as an engineer, was deliberately cycled through a variety of high management positions, grooming him for top leadership.

Now that the 787 has run into serious trouble, Bair's career arc has gone shooting off to the side. He will become vice president for business strategy and marketing at the commercial-airplanes division, looking ahead to future products.

Meanwhile, his chief rival in the succession race, Mike Cave, 47, was promoted Tuesday to the 12-person executive council, the top leadership of Boeing in Chicago, as senior vice president of business development and strategy. There, he will develop growth plans for both commercial and military units, oversee merger-and-acquisition activity and set annual business-plan goals.

Boeing Commercial Airplanes spokesman Jim Schlueter, however, suggested it's hardly time to write Bair off.

"Mike has led the development of the best-selling commercial airplane in history," Schlueter said. "He'll take that expertise into the job of leading our next steps on future products and strategy. It's one of the key senior positions."

Bob Bogash, a retired director in Boeing's supplier-purchasing organization, waggishly suggested that Bair's removal is one of six typical stages of an aerospace program. He recited them: euphoria, disillusionment, panic, search for the guilty, punish the innocent, reward the uninvolved.

"You pick where we are now," Bogash wrote in an e-mail.

Dominic Gates: 206-464-2963 or dgates@seattletimes.com

Copyright © 2007 The Seattle Times Company

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