Its amazin' BA lasted this long before... About time they're taught the basics...
dailynews.yahoo.com
Thursday January 28 3:13 PM ET
Boeing's new CFO on mission to teach workers the numbers
By Polly Lane
Seattle Times aerospace reporter
Deborah Hopkins is getting ready to put Boeing through basic training - her own version of cost-accounting boot camp.
Hopkins, the company's frank new chief financial officer, wowed Wall Street this week with her deft handling of financial discussions following the company's annual earnings report.
But as the keeper of Boeing finances, her sights are set on an audience even closer to home than the investment community.
After only five weeks on the job, she's planning extensive business-education programs that will reach from the executive corridors to the factory floors at the aerospace company.
She said she wants everyone at Boeing to understand business practices, profit-and-loss issues, return on assets and the way Wall Street values the business. She wants even factory mechanics to know how their jobs produce profit for the airplane maker.
"Clearly the role of a finance organization is to take the magic out of numbers for everybody involved," Hopkins told analysts. "We're going to break it up into pennies so everybody understands their role."
Hopkins, who came to Boeing from the European division of General Motors, seems to have swiftly grasped what is needed to make Boeing more profitable and attractive to investors. She has "moved quickly to take a proactive role," Boeing Chairman Phil Condit told reporters in a Tuesday phone conference.
Her initial educational effort will focus on the commercial-airplane unit. It has generated virtually no profit for more than a year because of production problems. The snarls delayed deliveries, causing oeing to post its first loss in 50 years in 1997. Even last
year's delivery of a record 559 jets brought in little profit.
Hopkins said she is meeting with Alan Mulally, president of Boeing Commercial Airplane Group, for an in-depth review of how his unit operates. A key issue to decide: what world-class production methods and lean-manufacturing principles can mean to profitability. Mulally's group is pressing ahead to improve efficiencies in lean manufacturing and change its processes.
Details of Hopkins' in-house education plan still are being worked out but it clearly has the support of the investment community. Previously, analysts say, there had been no tracking of costs or profit until an airplane was sold.
"What she is suggesting is a cutting-edge idea - thinking out of the box," said Aaron Gellman, a transportation expert at Northwestern University in Evanston, Ill. He said the approach has the potential to make Boeing "a more effective competitor."
Several other large corporations have used the strategy, including General Motors and Ford, said Rick Hurd, professor of labor studies at Cornell University in Ithaca, N.Y.
With cooperation from their unions, these companies have educated the work force about the general economy, who the competitors are and how their industry fits into the emerging global economy, he said.
"It is extraordinarily important in building understanding among workers and management about what exactly is going on in the company," Hurd said. "Workers can see how improving their performance matters to job security."
Hopkins, who is Boeing's top woman executive, acknowledged that "we didn't get here overnight and we can't fix it overnight."
She said she has to plow her way through understanding what it will take for the whole organization to achieve the desired financial results and gain confidence to work in a new way.
Analysts already are seeing some results because Boeing was moving in this direction before Hopkins' arrival.
"They can tell the profitability of every airplane," said Cliff Ransom, analyst for State Street Research in Boston. "They are prepared to communicate it with the people on the floor . . . and they are the ones who need to know."
Byron Callan, aerospace analyst for Merrill Lynch in New York, said he gives Hopkins' education plan his "100 percent
endorsement."
But he cautioned that results won't happen quickly and that Wall Street is taking a wait-and-see attitude.
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