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WHEN: Today, Tuesday, June 23rd
WHERE: CNBC's "Fast Money "
Following is the unofficial transcript of a CNBC EXCLUSIVE interview with CNBC's Phil LeBeau and outgoing Boeing CEO James McNerney and incoming Boeing CEO Dennis Muilenburg on CNBC's "Fast Money" (M-F, 5PM-6PM ET) today. Following are links to the video on CNBC.com: http://video.cnbc.com/gallery/?video=3000391033, http://video.cnbc.com/gallery/?video=3000391034 and http://video.cnbc.com/gallery/?video=3000391035.
All references must be sourced to CNBC.
SIMON HOBBS: BREAKING NEWS IN THE AFTER HOURS SESSION. LONG-TIME CEO JAMES MCNERNEY IS LEAVING THE COMPANY EFFECTIVE JULY 1st, AND HIS COO WILL TAKE OVER, THOUGH I'M NOT SURE THAT'S STRICTLY TRUE. I BELIEVE HE'S STAYING ON AS CHAIRMAN. LET'S GET TO THE FAST LINE AND TO CNBC'S PHIL LEBEAU, WHO IS JOINED NOW BY BOTH GENTLEMEN. PHIL, TAKE IT AWAY.
PHIL LEBEAU: THANK YOU, SIMON. I AM JOINED BY JIM MCNERNEY, WHO IS THE CURRENT CEO AND CHAIRMAN OF BOEING, WHO WILL BE LEAVING AND STEPPING DOWN AS CEO EFFECTIVE JULY 1st. AND HIS SUCCESSOR IS THE CURRENT COO, DENNIS MUILENBURG. THEY'RE JOINING US ON THE FAST LINE. AND JIM, LET'S START FIRST OFF WITH YOU. WHY NOW? WHY THE TRANSITION TO SAY IT'S TIME TO HAND OVER THE REINS TO DENNIS?
JAMES MCNERNEY: WELL, I THINK IT'S A LITTLE BIT OF A GENERATIONAL SHIFT. I, IN A MONTH OR SO, I'M GOING TO BE 66. DENNIS IS 51. THIS IS A VERY LONG CYCLE BUSINESS WHERE LIVING WITH YOUR DECISIONS IS IMPORTANT. DOESN'T ALWAYS FEEL GOOD, BUT IT'S IMPORTANT. I THINK I'VE HAD A DECADE, 14 YEARS IF YOU COUNT MY TIME ON THE BOARD. I THINK IT'S TIME FOR DENNIS, WHO HAS BEEN WORKING WITH ME OVER THE LAST COUPLE OF YEARS TOWARD THIS DATE. WE'VE BEEN THINKING THIS WAY, THE BOARD HAS BEEN, FOR A PERIOD OF TIME NOW. SO THIS IS, I THINK, IN THE CATEGORY OF SORT OF A STABLE MANAGED TRANSITION WITH A PRETTY FIRM BUSINESS BASE.
LEBEAU: AND WE APOLOGIZE FOR THE ANNOUNCEMENTS YOU HEAR IN THE BACKGROUND, GUYS. I'M CALLING FROM THE DETROIT AIRPORT. DENNIS, THE TRANSITION. OBVIOUSLY YOU'VE BEEN WITH BOEING FOR WHAT NOW? 30 YEARS, AND YOU ARE SOMEBODY STEEPED IN UNDERSTANDING THE VARIOUS FACETS OF THE COMPANY. WHAT ARE YOUR THOUGHTS AS YOU TAKE OVER FOR JIM EFFECTIVE JULY 1st?
DENNIS MUILENBURG: PHIL, FIRST OF ALL, IT'S REALLY A PRIVILEGE TO TAKE ON THIS LEADERSHIP ROLE FOR THE COMPANY. I'VE HAD THE CHANCE TO WORK VERY CLOSELY WITH JIM OVER THE LAST YEAR AND A HALF. SO AS HE SAID, THIS IS REALLY ABOUT STABILITY AND CONFIDENCE IN OUR PATH FORWARD. I'VE ALSO HAD THE OPPORTUNITY TO WORK VERY CLOSELY WITH OUR OTHER SENIOR EXECUTIVES HERE AT THE COMPANY INCLUDING RAY CONNER, WHO'S DONE A FANTASTIC JOB OF RUNNING OUR COMMERCIAL AIRPLANE BUSINESS. AND AS A RESULT, WE ARE WELL POSITIONED AS WE HEAD INTO OUR SECOND CENTURY AS A COMPANY, RAMPING UP OUR COMMERCIAL AIRPLANE BUSINESS, GROWING OUR DEFENSE BUSINESS INTERNATIONALLY, AND WE'RE INVESTING IN PRODUCTIVITY AND INNOVATION FOR THE FUTURE. SO WE HAVE A STRONG STRATEGY IN PLACE AND WE'RE GOING TO CONTINUE TO EXECUTE THAT WITH PACE AND CONFIDENCE.
LEBEAU: JIM, WITH NO DISRESPECT TO DENNIS, I WAS JUST READING A NOTE THAT WAS PUT OUT BY AN ANALYST, AND HE WROTE THE TITLE OF THE NOTE "THE KING IS DEAD, LONG LIVE THE KING," TALKING ABOUT YOUR TENURE AT BOEING. THERE IS A KNEE-JERK REACTION ON WALL STREET, WHENEVER A SUCCESSFUL CEO STEPS DOWN TO SAY, WELL, THAT WAS A GOOD RUN, THE BEST THAT WE'RE GOING TO SEE FOR A WHILE. WHAT DO YOU SAY TO WALL STREET TO CONVINCE THEM THAT DENNIS IS GOING TO CONTINUE THE PATH THAT YOU'VE SET FOR BOEING SINCE 2005?
MCNERNEY: WELL, I THINK DENNIS IS WELL KNOWN TO OUR INVESTOR GROUP, AND QUITE FRANKLY I'VE HAD MANY OCCASIONS TO PRESENT TO THEM NEXT TO DENNIS AND HE'S PRETTY DARN GOOD. HE HAS THE CONFIDENCE OF MOST OF THEM. HAVING SAID THAT, I MEAN, DENNIS AND I HAVE BEEN WORKING SIDE BY SIDE FOR THE LAST YEAR AND A HALF. HE'S BEEN MAKING DECISIONS WITH ME THAT HE'S NOW GOING TO LIVE WITH, I'M NOW GOING TO BE PART OF IN THE CHAIRMAN'S ROLE, AND I THINK WHAT THE ANALYSTS ARE REALLY LOOKING FOR, BECAUSE I THINK MOST OF THEM THINK WE HAVE A WINNING HAND, THE COMPANY'S BEEN DOING WELL, THE FUTURE'S BRIGHT IF WE EXECUTE – I THINK THE SOURCE OF REASSURANCE THAT THEY CAN DRAW ON IS THAT WE HAVE CRAFTED THAT STRATEGY TOGETHER AND IN MANY WAYS THERE'S NOT GOING TO BE A CHANGE EXCEPT GENERATIONALLY AND IT'S TIME FOR THAT.
LEBEAU: DENNIS, WHAT'S THE NUMBER ONE CHALLENGE IN YOUR OPINION RIGHT NOW? I MEAN, I KNOW YOU'VE GOT A NUMBER OF THEM IN FRONT OF YOU. YOU'VE GOT THE TRIPLE 7 BRIDGE. YOU'VE GOT POSSIBLE REPLACEMENT FOR THE 757. YOU'VE GOT SOME DEFENSE PROGRAMS THAT OBVIOUSLY SOME TOUGH CHOICES ARE GOING TO HAVE TO BE MADE. WHEN YOU LOOK AT YOUR PORTFOLIO AT BOEING AND YOUR TENURE OVER THE NEXT, LET'S JUST SAY THE FIRST COUPLE OF YEARS, WHAT DO YOU LOOK AT AS BEING THE BIGGEST CHALLENGE?
MUILENBURG: YEAH, HEY, PHIL, WE SEE THOSE CHALLENGES AND OPPORTUNITIES IN THOSE AREAS THAT YOU JUST MENTIONED. ONE, THE COMMERCIAL AIRPLANE BUSINESS. WE'RE VERY WELL POSITIONED THERE. WE'RE BRINGING MORE INNOVATION TO THE MARKET NOW THAN WE HAVE AT ANY TIME IN THE PAST. WE DO HAVE CHALLENGES RELATED TO CONTINUING TO RAMP UP THAT BUSINESS AND DO IT SUCCESSFULLY AND PROFITABLY, AND WE BELIEVE WE HAVE A STRONG PLAN IN PLACE TO DO THAT. IT'S ALL ABOUT EXECUTION. WE DO NEED TO DELIVER ON OUR NEW DEVELOPMENT PROGRAMS LIKE THE TRIPLE 7 X AND THE 737 MAX AND BUILD A BRIDGE TO THOSE FUTURE PROGRAMS. AND AS YOU SAW RECENTLY AT THE PARIS AIR SHOW, WE CONTINUED TO MAKE VERY STRONG PROGRESS ON BUILDING THE TRIPLE 7 BRIDGE. SO, CHALLENGES THERE, BUT ALSO CONFIDENCE WE CAN EXECUTE. THE DEFENSE MARKET A LITTLE MORE CHALLENGING RIGHT NOW BUT AGAIN, I THINK WE'RE WELL POSITIONED AND WE'RE SEEING CONTINUING SIGNS OF INTERNATIONAL GROWTH IN PARTICULAR. AND WE'RE GOING TO CONTINUE TO INVEST IN PRODUCTIVITY AND INNOVATION FOR THE FUTURE, AND THAT'S A STEADY PART OF OUR STRATEGY AND ONE WE'RE GOING TO CONTINUE TO DELIVER WITH PACE.
LEBEAU: JIM, ONE LAST QUESTION. YOU'RE FAMILIAR WITH WHAT IT'S LIKE TO BE PART OF A STRONG BENCH, WHEN YOU WERE AT GE AND YOU WERE ONE OF THE FINALISTS TO REPLACE JACK WELCH. YOU'VE GOT A STRONG BENCH NOW AT BOEING, AND YOU ARE NOW THE CEO WHO HAS SAID, OKAY, DENNIS MUILENBURG IS IN THE EYES OF THE BOARD THE RIGHT MAN TO LEAD THIS COMPANY IN THE NEAR FUTURE. PERHAPS FOR A LONG TIME. BUT YOU'VE GOT A STRONG BENCH. HOW DO YOU CONVINCE WALL STREET THAT THAT BENCH, THAT TALENT, WHETHER IT'S RAY CONNER RUNNING COMMERCIAL OR THE OTHER EXECUTIVES IN THE OTHER DIVISIONS, THAT THAT BENCH IS GOING TO STAY IN PLACE AND THAT YOU WILL REMAIN WITH A DEEP BENCH?
MCNERNEY: I THINK WE HAVE EXPOSED OUR INVESTOR GROUP TO US WORKING TOGETHER AS A TEAM IN MANY DIFFERENT VENUES. THAT'S ONE WAY TO DO IT. I THINK THEY SEE US WORKING TOGETHER. I THINK RESULTS AT THE END OF THE DAY ARE THE THING THAT COUNT. AND I THINK THAT THE SAME FACES FOR A COMPANY THAT IS NOT ACHIEVING RESULTS IS NOT A GOOD THING. SAME FACES WORKING TOGETHER FOR A COMPANY THAT IS ACHIEVING RESULTS IS A GOOD THING. I THINK RECENTLY THE SAME FACES HAVE BEEN WORKING TOGETHER, AND WE HOPE TO KEEP THAT GOING.
LEBEAU: GUYS, I WANT TO BRING IN STEVE GRASSO. HE'S GOT A QUICK QUESTION FOR YOU. STEVE, GO AHEAD.
STEVE GRASSO: MR. MUILENBURG, FIRST OF ALL YOU LOOK YOUNGER THAN 51. I'LL START THERE. SECONDLY, WHEN YOU LOOK AT YOUR COMMERCIAL FLEET IN SALES, IT'S ROUGHLY A $60 BILLION NUMBER. WHEN YOU LOOK AT THE FENCE, IT'S ROUGHLY HALF OF THAT. WHEN YOU LOOK AT THE STRONG DOLLAR, IS THAT YOUR NUMBER ONE CONCERN, BEING AS THOUGH YOU EARN ABOUT 37, 38 BILLION DOMESTICALLY AND THERE'S AN ASSORTMENT OF OTHER COUNTRIES THAT YOU EARN ABOUT 12 BILLION FROM, IS THE DOLLAR YOUR NUMBER ONE CONCERN RIGHT NOW?
MUILENBURG: NO, STEVE, IT'S NOT. WE DO KEEP A VERY CLOSE EYE ON CURRENCY FLUCTUATIONS. IT'S PART OF THE ANALYSIS WE DO. IT'S PART OF OUR DAILY BUSINESS. BUT WE DON'T SEE CURRENCY FLUCTUATION AS BEING A STRONG DRIVER FOR THE COMMERCIAL AIRPLANE BUSINESS. AND MOST OF OUR CUSTOMERS THERE ARE MAKING LONG-TERM FLEET PLANS, THEY ARE MAKING DECISIONS THAT STRETCH OUT OVER FIVE TO TEN YEARS, AND THEY'RE NOT CHANGING THEIR BUYING BEHAVIORS BASED ON, I'LL SAY MORE TACTICAL CURRENCY FLUCTUATIONS. SO WE CONTINUE TO KEEP AN EYE ON THAT, BUT THAT IS NOT A BIG DRIVER FOR US OR SOMETHING THAT HAS ALTERED OUR STRATEGY AT ALL. AND FURTHER TO THAT, WE HAVEN'T SEEN OUR CUSTOMERS' BUYING BEHAVIORS CHANGE AT ALL. OUR BACKLOG REMAINS SOLID AND WE ARE CONFIDENT THAT WE WILL DELIVER ON THAT QUALITY BACKLOG.
LEBEAU: SIMON, DO YOU HAVE A QUESTION?
HOBBS: I DO, ACTUALLY. MR. MCNERNEY, I APPRECIATE THE SPLITTING THE CHAIRMAN AND CEO ROLE WILL WORK WELL FOR THE TRANSITION. I JUST WONDER WHETHER THAT'S A BIT OF AN EPIPHANY FOR YOU AS WELL THAT LONGER TERM, YOU SHOULD SPLIT BOTH POSITIONS – THAT TWO ARE STRONGER THAN ONE, OR WHETHER YOU WOULD LOOK TO RETURN THE CHAIRMANSHIP TO DENNIS FURTHER DOWN THE LINE OR GIVE THE CHAIRMANSHIP TO DENNIS FURTHER DOWN THE LINE?
MCNERNEY: THAT'S A FAIR QUESTION. I THINK IF YOU LOOK BACK THROUGH BOEING'S HISTORY, WE'VE HAD INDIVIDUALS HAVE BOTH TITLES. THERE ARE TIMES WHEN WE'VE SPLIT IT, OFTEN DURING A TRANSITION LIKE THIS. BUT SOMETIMES – OTHER TIMES WHEN EVENTS DICTATED IT AND MADE THAT THE RIGHT THING TO DO FOR OUR SHAREHOLDERS. I THINK THAT'S A DECISION THE BOARD WILL MAKE IN THE FUTURE AND I DON'T WANT TO PREJUDGE IT ONE WAY OR THE OTHER. AND I UNDERSTAND THE SOURCE OF YOUR QUESTION. OUR BOARD DOES NOT HAVE ONE FORMULA. OUR BOARD TRIES TO DO THE RIGHT THING IN THIS REGARD, AND THAT COULD BE BRINGING IT BACK TOGETHER, IT COULD BE KEEPING IT APART FOR A PERIOD OF TIME. A DECISION FOR THEM TO MAKE.
LEBEAU: JIM MCNERNEY, WHO IS THE CURRENT CEO WHO WILL BE HANDING OVER THE REINS TO DENNIS MUILENBURG, WHO WILL BECOME CEO EFFECTIVE JULY 1st, THANK YOU FOR JOINING US ON THE FAST LINE. AND JIM, ONE LAST QUESTION. RELINQUISHING THOSE DAY-TO-DAY DUTIES MEAN A LITTLE MORE TIME POTENTIALLY FOR SOME POND HOCKEY?
MCNERNEY: ABSOLUTELY. MY SKATING'S GETTING A LITTLE RUSTY. SO I LOOK FORWARD TO TUNING IT UP A LITTLE BIT. THE BLACKHAWKS WERE INSPIRATIONAL.
LEBEAU: SOUNDS GOOD. THANK YOU, GENTLEMEN. AND CONGRATULATIONS AGAIN, DENNIS. SIMON, I'LL SEND IT BACK TO YOU.
MCNERNEY: THANKS, PHIL.
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