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Boeing restructures commercial airplane strategy, marketing

The Boeing logo is seen at their headquarters in Chicago, April 24, 2013. REUTERS/Jim Young
The Boeing logo is seen at their headquarters in Chicago, April 24, 2013. REUTERS/Jim Young

By Alwyn Scott

NEW YORK (Reuters) - Boeing Co said on Thursday that it will restructure its commercial airplane strategy and marketing functions, just days after the company lost a $9.5 billion order in Japan, previously its most secure market.

The action, announced in a memo by Boeing Commercial Airplane Chief Executive Ray Conner that was obtained by Reuters, follows Japan Airlines Co Ltd's <9201.T> decision on Monday to pick Airbus planes to replace its Boeing 777s, rather than the next-generation Boeing 777X model.

"You probably wouldn't have seen this happen if they had won JAL," said Ron Epstein, an analyst at Bank of America Merrill Lynch.

"Boeing is looking at their sales strategy" following the Japanese loss, he added.

Conner linked the shifts to the retirement of Boeing veteran Mike Bair, who he said leave November 1, relinquishing his role overseeing the marketing and strategy groups.

In the new structure, marketing functions under Bair would be shifted to the sales group and led by marketing Vice President Randy Tinseth, who would report to global sales chief John Wojick.

Strategy and business development functions will shift to the finance group, and will be led by Kevin Schemm, who will be head of finance and strategy.

Boeing confirmed the memo is accurate but declined to comment further.

Bair, a 34-year Boeing veteran who began his career as an engineer, rose to head the 787 Dreamliner program during its initial troubled period, when the company outsourced production of major components to suppliers around the world.

Bair stepped down as head of the 787 program in 2007, when the program was about six months behind schedule, taking up his current role as chief of market and strategy.

Production problems ultimately delayed the 787's entry into service by 3-1/2 years beyond its original schedule. Since then, the plane has suffered a series of problems, including burning batteries on two Dreamliners that prompted regulators to ground the entire fleet in January. Flights resumed in April after Boeing redesigned the battery system.

On Thursday, Norwegian Air Shuttle revealed that Boeing had recently redesigned another part - a hydraulic pump that activates wing flaps that steer the plane - after the unit failed repeatedly on a new 787 that the budget Nordic airline received in August.

The plane's performance was "fantastic," when it flew, Norwegian Air Chief Executive Bjorn Kjos told Reuters in an interview.

But the plane with the faulty pump was unreliable and needed to be serviced every other day. Boeing spent two weeks overhauling it, installing a redesigned pump, he said.

(Reporting by Alwyn Scott; Editing by Gerald E. McCormick, Steve Orlofsky and Richard Chang)

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