Boeing Co. (BA:US) arrives at the Farnborough air show, where billions of dollars of jet orders may be unveiled next week, lacking a sales chief as it fills the job for a ninth time since John Leahy took his post at Airbus SAS.
Ray Conner, the previous sales boss, will be at the show in his new role running Boeing Commercial Airplanes and will lead the sales team until a successor is named. Leahy became Airbus’s chief commercial officer 18 years ago, and the Toulouse, France- based company has led Boeing in annual deliveries since 2003.
The vacancy’s impact will be muted by the fact that orders are mostly completed before the show near London and by a decision-making structure at Chicago-based Boeing that is less centralized than that of its European rival, said Howard Rubel of Jefferies & Co. in New York and other analysts.
There’s a “selling-by-committee feel that Boeing has, more so than John’s individualistic, much more autonomous approach,” said Barclays Plc’s Carter Copeland in New York. “I wouldn’t necessarily say it’s good or bad, it’s just different.”
Sales chiefs have tended to move to other positions at Boeing, which emphasizes executive training. Conner held the job from 2007 to 2009, when he became vice president of supply chain management and operations. His successor was Marlin Dailey, who was then moved in August to be president of Boeing Germany, Northern Europe/EU and Africa, and was replaced by Conner.
“Part of it is just the centralized nature of Airbus sales and its reliance on Leahy, whereas Boeing is more decentralized, so there’s going to be more rotation,” said Richard Aboulafia with the Teal Group in Fairfax, Virginia.
Conner “is well-known and widely respected among our customers,” said Marc Birtel, a Boeing spokesman. “In addition, our regional sales vice presidents are fully engaged with our customers on all fronts, including at Farnborough.”
Airbus and Boeing Commercial Airplanes, which generated 53 percent of the parent’s $68.7 billion in 2011 sales, both will have new CEOs at the Farnborough International Air Show. Airbus’s Fabrice Bregier took the company’s top spot in May. The Farnborough show rotates each year with an expo in Paris as the main trade event for planemakers, suppliers and customers.
Boeing is lagging behind Airbus parent European Aeronautic, Defence & Space Co. this year in the eyes of investors. The U.S. company’s shares rose 0.5 percent this year through yesterday, while EADS climbed 16 percent.
The new leaders’ most urgent moves will be determining their strategies for the wide-body market, Aboulafia said.
The planemakers both decided to revamp their narrow-body jets with new engines rather than develop new models, and the Airbus A320neo is due to enter service before Boeing’s 737 MAX.
Now they’re vying for position in the wide-body jet market, with products such as Boeing’s composite plastic 787 Dreamliner and Airbus’s A350, scheduled to enter service in mid-2014. Boeing is also considering a successor for the 777, the world’s top-selling twin-aisle airliner.
“The real strategic direction here is refining and improving and restoring confidence in the A350 on the one side and deciding between the 787-10 and the 777X on the other,” Aboulafia said.
The hole in Boeing’s management lineup is “a missed opportunity to debut someone new at the show, but the new guy is going to have to bank a lot of frequent-flier miles when he takes the job anyway,” Aboulafia said. “Nothing substitutes for actual client visits.”
Conner fostered Boeing’s team approach to sales during his tenure, with more regional chiefs than Airbus, said Jefferies’s Rubel. “I don’t think they’ll miss a beat,” he said.
Any jet orders announced in the coming week will be the product of months’ worth of negotiations well before Conner’s predecessor as commercial airplanes chief, Jim Albaugh, decided to retire in late June.
“Air-show deals are cleared in advance,” Aboulafia said. “There’s a lot of fanfare that makes it look like someone showed up with a handful of cash, but in reality all the details were hashed out beforehand.”
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