Boeing’s New CFO Faces Tough Decisions on How to Reduce Debt

Boeing Co.

The new CFO, a former General Electric Co. manager with close ties to the aircraft maker’s chief executive, faces tough decisions about how to reduce the company’s debt.

Chicago-based Boeing said Wednesday that it has hired Brian West as its executive vice president and chief financial officer, effective Aug. 27. West, who currently serves as CFO of financial data company Refinitiv, will succeed Boeing’s former CFO. Greg Smith, who plans to retire this month after about a decade in office and 30 years with the company. Treasurer Dave Dohnalek will take over as interim CFO until West joins the company, Boeing said.

West has been Refinitiv’s CFO since 2018 and previously led the finances of Oscar Health Insurance Inc., a New York-based health insurance startup. Prior to that, he served as CFO and COO at rating firm Nielsen Holdings NV.

The former 51-year-old spent 16 years of his career at industrial conglomerate GE,

where he worked with current Boeing CEO David Calhoun, who headed the company’s aviation division. Mr. West served as chief financial officer for GE Aviation and GE’s engine services business.

Mr. Calhoun recruited him to Nielsen after he became CEO of the firm in 2006. “They have worked together on and off for nearly 20 years since GE,” said Jamere Jackson, AutoZone Inc.’s chief financial officer who became He was in charge of Nielsen’s finance department when Mr. West was promoted to COO in 2014 and worked with him during the transition period. “He’s very smart,” Jackson said of West.

In his new role, West will have to balance the need to reduce Boeing’s mountain of debt while investing in new aircraft and research and development, analysts said.

The company’s consolidated debt stood at $ 63.6 billion at the end of the first quarter, partly stemming from a $ 25 billion bond sale last year that outgoing CFO Mr. Smith orchestrated to help the company to overcome the pandemic.

Brian West will become Boeing’s chief financial officer on August 27.


Boeing Co.

“There are problems everywhere at Boeing,” said Ken Herbert, managing director of financial services firm Canaccord Genuity Group. INC.,

referring to the company’s capital structure, its portfolio and recent failures around the delivery of new aircraft.

Boeing should focus on reducing interest payments and increasing free cash flow to generate funds for the development of new aircraft, Herbert said.

Calhoun, at a conference earlier this month, acknowledged that the company has work to do. “We have a debt repayment scenario that we want to aggressively pursue,” he said, adding that the company’s new CFO would influence this.

The recent recovery in air travel and new orders from airlines, including United Airlines Holdings INC.,

it could help boost the free cash flow of the business. United said Tuesday it plans to buy 200 Boeing 737 MAX jets, along with new planes from rival Airbus SE, its largest order to date.

Boeing, which is waiting for major growth markets like China to recertify its 737 MAX after two fatal crashes, has lagged behind Airbus in terms of market share, said Burkett Huey, an equity analyst at research provider Morningstar Research Services. LLC. “What Boeing really needs to invest in is a half-market airplane,” Huey said.

“They have a ton of cash, a bulging balance sheet and a portfolio that is currently more of an interim solution,” Huey said. Boeing had about $ 21.9 billion in cash and marketable securities at the end of the first quarter, up from $ 15.5 billion during the prior year period. The company posted $ 15.22 billion in revenue during the first quarter, down from $ 16.91 billion a year earlier.

“Brian is the ideal executive to serve as Boeing’s next CFO given his significant experience in financial management and long-term strategic planning in complex global organizations in the aerospace, manufacturing and service industries,” Calhoun said, according to a statement. .

Boeing declined to comment beyond its launch.

Write to Nina Trentmann at [email protected]

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