New role gets Stephanie Pope closer to the top at Boeing

UPDATE - Boeing confirmed media reports on Monday that Stephanie Pope has been appointed Chief Operating Officer (COO) of the Boeing Company from January 1. As a veteran of many leadership roles, many analysts believe that her new role gets Pope even closer to becoming the new President and CEO once David Calhoun retires. As COO, Pope will directly report to Calhoun, while Stan Deal (President and CEO of Boeing Commercial Airplanes), Ted Colbert (Boeing Defense and Space), and Chris Raymond as the new President and CEO of Boeing Global Services will report to Pope. She has led BGS herself since April 2022. “As Boeing COO, Pope will oversee the performance of the company's three business units with responsibility for driving supply chain, quality, manufacturing and engineering excellence across the company,” Boeing said in a media statement on Monday. With a Chief Operating Officer, Boeing creates a new role in the top management of the company not occupied recently. However, the COO has existed before and was part of Dennis Muilenburg’s portfolio of Vice Chairman and President since December 2013. When Muilenburg became CEO in 2015, the position was left vacant. Muilenberg himself left Boeing in December 2019 after criticism of the way he handled the two MAX accidents and subsequent groundings. "Proven record of performance" Pope’s new role seems to combine positions currently taken by other members of the Executive Team. For instance, the supply chain is part of the portfolio of chair and supply chain operations council Vice President and BGS, William A. Ampofo II. Quality is part of Carole A. Murray’s position as Vice President of the Quality Operations Council at BCA. Scott Stocker is Vice President of the Manufacturing Operations Council at BCA. A Boeing spokesperson had nothing to add to the media statement and didn’t answer specific questions from AirInsight about the new role of Stephanie Pope. In the press release, David Calhoun is quoted as saying: "Stephanie brings tremendous operational, financial and customer experience to this role, as well as a proven record of performance across our commercial, defense and services business units. Next year will be a significant transitional year in our performance as we continue to restore our operational and financial strength; and Stephanie will help drive the stability and predictability necessary to ensure we deliver on our customer, employee, regulatory, investor and other stakeholder commitments." Stephanie Pope has been with Boeing for over two decades. Before her promotion to President and CEO of Boeing Global Service in 2022, she was Vice President and Chief Financial Officer of BCA from December 2020 to March 2022. Pope served a term at BGS before, helping to establish the new business unit in 2017. Before that, she was Vice President of Finance at BDS. Strong results at BGS Under Pope, Boeing Global Services has consistently produced positive earnings from operations while BCA and BDS were loss-making. BGS produced a $2.727 billion net profit for 2022 with a 15.5 percent operating margin, up from $2.017 billion and 12.4 percent in 2021. Revenues totaled $17.611 billion. For the first nine months of 2023, the net profit stood at $2.487 billion, up from $2.093 billion in the same period of 2022. The net margin was 17.4 percent. 9M revenues were $14.278 billion, of which $8.218 billion were from commercial programs and $5.793 billion from government contracts. BGS had a backlog of $18.441 billion by the end of September. While this might be attributable to the skills of Pope, it is fair to say that BGS has benefitted from the strong recovery of air travel and hence demand for aircraft services since the pandemic. BGS won various new contracts and expanded its activities in the freighter conversion market. Pope outlined the strong growth strategy in a short presentation to the media at the Paris Airshow, but most questions went to Stan Deal (main picture). Whether her new role as COO prepares Stephanie Pope for a future as President and CEO of the company she has worked for so long remains to be seen. There is no immediate urgency to replace David Calhoun, who will be 67 in April but is entitled to stay on for another three years until he becomes 70. Calhoun would be keen to harvest next year when Boeing is expected to significantly improve its financial results. By the end of next year, Boeing should have left most of the costly rework of the MAX and 787 while getting close to the entry of service of the 777-9. A transition of power seems more likely in 2025 when Boeing has set itself key financial objectives like $100 billion in revenues, at least a 10 percent operating margin, and $10 billion in free cash flow. BCA should deliver 800 aircraft again per year, numbers not seen since the MAX grounding and the pandemic, with margins in the low double-digits. BGS should see mid-single-digit growth and mid-teen operating margins, and BDS low-single-digit growth and high-single-digit margins. On December 14, Boeing announced the appointment of Chris Raymond as President and CEO of BGS from January 1. His successor as Chief Sustainability Officer will be Brian Moran, currently Vice President of Global Sustainability Policy & Partnerships.

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