Boeing's hiring of James McNerney as chief executive on Thursday raised investor hopes that the company can wring bigger and more consistent profits from its operations and left 3M scrambling after McNerney's abrupt departure.
Boeing shares rose 7 percent on Thursday, and 3M's fell 4.9 percent, a combined swing in stock market valuation of roughly US$6.4 billion.
McNerney, 55, an outside director at Boeing, had previously said he wanted to remain at 3M, but in recent weeks had what he called "a change of heart" and opted for the more glamorous, more global and more troubled aircraft and military equipment maker.
Lewis Platt, who served as chairman of Boeing during the search and becomes lead director, said on Thursday in a conference call: "He really did change his mind."
There was talk that he preferred Chicago, where Boeing has its headquarters, to St. Paul, Minnesota; that he yearned for a return to the aircraft industry, a business he ran at General Electric before going to 3M; and that he wanted to close out his career at a higher-profile company that presents a bigger management challenge.
Without addressing the issues directly, McNerney said, "There was a lot that was tugging at me to stay at 3M. You don't want to admit that you want something else."
But in the last two weeks, he said, "I realized that the job was about to go away, and I realized that I did want it, and that 3M could live without me."
Platt said McNerney told him: "`I'm having some trouble living with the decision I made"' to stay at 3M.
McNerney's feelings shifted, Platt said, "as he saw the job potentially going to someone else."
To secure McNerney as chairman, president and chief executive, Boeing agreed to match his 3M salary and bonus, a combined US$5.1 million last year; to cover any portion of his stock-based compensation, which could total more than US$60 million, that 3M does not pay him; and match his pension, which could have paid him more than US$3 million a year had he stayed at and retired from 3M.
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