Boeing CEO Flies Right

 | Mar 14, 2014 | 11:48 AM EDT
  • Comment
  • Print Print
  • Print
Stock quotes in this article:


What is a "bankable CEO" and why does it matter? I introduced the concept in my latest book, Get Rich Carefully, because I wanted to show how a strong CEO can pilot a company higher through adversity. These CEOs are like NFL coaches; they don't get down and give up after a couple of losses. They bounce back with a new game plan. They put together winning teams. They have triumphed through adversity before and they will triumph again.

I picked the 21 bankable CEOs for Get Rich Carefully (which I will be signing Saturday at the Costco on Route 10 in East Hanover, N.J., from noon until 2 p.m.) only after careful scrutiny and guest appearances on Mad Money. That's where I hope to size up the man or woman at the top, and make a judgment about how that person will handle the vicissitudes of business and all the trials and tribulations that occur at any modern-day company.

One of my favorites on the list is Jim McNerney because he's been able to handle some of the toughest reversals during his tenure as Boeing's (BA) CEO, turning events that might buckle a lesser CEO into opportunities to buy the stock at a lower price than you would otherwise get under the normal course of business.

Right now is one of those moments. Boeing's stock is under assault by three different news stories. First is word that there is an inventory glut of 787 Dreamliners. Second is a report that there are cracks in the wings of some still-to-be-delivered 787 aircraft. Third is the possibility of problems related to the Malaysia Airlines' Boeing 777 that mysteriously disappeared last Saturday.

First, I highly question if there is a real inventory glut. McNerney said on Mad Money that the queue is many years long because the plane reduces fuel consumption dramatically, and fuel is about as much as 50% of an airline's cost.

Second, we focus on anything involving problems, solvable or otherwise, with the problem-plagued Dreamliner even as these cracks haven't been found on planes that have left the factory. I am sure the wing cracks will be dealt with in the same fashion as other issues that have popped up, and it is a solvable problem. As McNerney said about earlier Dreamliner glitches, "The response with the people of our company was to roll up their sleeves and go to work to solve the problem." I doubt these wing cracks -- which stem from manufacturing woes not of Boeing but of Mitsubishi, to which Boeing outsourced the job -- will take long to fix.

Finally, the Malaysian Airlines incident is 100% speculation and has nothing to do with questioning one of the safest planes Boeing ever built.

McNerney says that one of his jobs is to "keep the distractions away from the people doing the real work in the company and satisfying investors and satisfying customers." He's not going to let these distractions derail his 20-year-opportunity plan for this great American company, as aircraft demand is one of the great long-term themes of this market.

That means this weakness in Boeing creates exactly the kind of opportunity I suggested would come up with all companies. And with McNerney at the helm, I believe you should be buying, not selling, shares of Boeing as it gets dragged down by problems that will be fleeting, even as they seem endless in the heat of the moment.

Columnist Conversations

today is a good day to lighten the load and take some positions off the table. SOLD WB OCT 85 CALL AT 11 (i...
I reached out last week to my close friend Ken Shreve, who is a prominent writer for the IBD.  I asked Ke...
I reached out last week to my close friend Ken Shreve, who is a prominent writer for the IBD.  I asked Ke...
View Chart »  View in New Window »



News Breaks

Powered by


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.