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Mike Bair replaced by Boeing Co

After announcing a delay in its new 787 jetliner, Boeing Co. is replacing Mike Bair, who has led the program for the past three years.

Pat Shanahan, who served as head of two previous widebody jet programs at Boeing before moving over to the company's military unit five years ago, will replace Bair as vice president and general manager of the 787 Dreamliner program.

Bair was named vice president of business strategy and marketing for the company's Seattle-based commercial airplanes division, the same job he held before being named head of the 787 program in 2004. He'll replace Michael Cave, who is taking a similar job at the company's corporate headquarters in Chicago.

In a statement announcing the moves, Scott Carson, chief executive of Boeing's commercial airplanes unit, praised Bair while saying Shanahan is now the right person for the job.

"Pat's experience and proven record managing demanding and complex programs will allow him to build on the 787 team's success as we tackle the challenges we face bringing our new production system fully on line," Carson said.

Boeing would not have kept Bair in a high-level position if it had lost complete confidence in him, but replacing him is a strong statement that new leadership is needed, said Richard Aboulafia, an analyst with the aerospace and defense research firm Teal Group.

"Given the timing, they might have decided that a fresh face would be best, would inspire confidence," Aboulafia said.

Boeing shares rose $1.11, or 1.17 percent, to $95.94 in trading Tuesday.

Boeing's stock has been slipping since Oct. 10, when the company announced it was delaying its first delivery of the 787 by six months to November or December 2008 because of problems it has encountered assembling the first few planes.

Shanahan, 45, was named head of Boeing's 767-400ER program in 1999, then became chief of the 757 program the following year. He moved to Boeing's Integrated Defense Systems unit in 2002, leading the Philadelphia-based division that makes helicopters and other rotorcraft. In 2004, he became head of the company's missile defense systems unit, headquartered in Washington, D.C.

In his new role, Bair will remain closely involved with the 787 program "and will take that expertise and track record to leading our next steps on future products, services and strategy," Boeing spokesman Jim Schlueter said.

Bair, 51, started out at Boeing in 1979, working as an aircraft noise engineer on the 767, and rose up through several management jobs in marketing before being named head of the 757 program.

Carson gave Bair credit for taking the 787 "from a concept to a market-leading position," noting that the company has won 710 orders from 50 airlines. The plane is sold out through late 2013, the same year Airbus' competing A350 is expected to hit the market.

Airbus has won 176 orders plus 98 nonbinding commitments from 16 customers for the A350, which it had to invest heavily in redesigning after airlines were not happy with the original plan.

The 787 will be the first large commercial jetliner made mostly of light, sturdy carbon-fiber composites rather than aluminum, making it more fuel-efficient and cheaper to maintain. Airbus's A350 will also be made largely of composites.

In other announcements Tuesday, Boeing named Shephard Hill as president of Boeing's international division, replacing Laurette Koellner, who is retiring. Cave, whom Bair is replacing, is assuming the job Hill is vacating, senior vice president of business development and strategy.

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