Tuesday, October 08, 2013

Boeing's Top Salesman Works to Rebuild Customer Trust, Fend Off Airbus: WSJ

October 8, 2013, 9:17 p.m. ET


The Wall Street Journal

In January, when burning batteries on two Japanese-owned 787 Dreamliners grounded the jetliner world-wide, Boeing Co. sales chief John Wojick flew to Tokyo to try to reassure two of his most loyal customers.

On Monday, he learned that Boeing's efforts to keep them both firmly in its corner weren't enough. Japan Airlines Co. announced its first-ever order from rival Airbus, a deal for at least 31 widebody A350s valued at as much as $9.5 billion.

The order is a setback in Mr. Wojick's efforts to defend Boeing's turf from Airbus and build a more aggressive, customer-focused sales culture since he took the top sales job just over a year ago. It puts heavy pressure on the 56-year-old executive to avert a similar Airbus deal with the second of its two key Japanese clients, All Nippon Holdings Inc., which is said to be nearing a decision on a major purchase.

Mr. Wojick, a former competitive downhill skier with a history of sales comebacks, has spent the year working to regain the trust of Boeing's customers—some of whom were already skeptical of the Dreamliner after years of production glitches and delays.

To fend off Airbus, he is pushing three aircraft whose improved fuel efficiency makes them vital to Boeing's future, the narrow-body 737 Max, a stretched version of the Dreamliner, and the twin-aisle 777X, the company's planned competitor to the A350s bought by JAL.

"Our failure on the 787 has caused people to want to understand why we believe the 737 Max and the 777X will be a different story," Mr. Wojick said in a rare interview earlier this year.

Through a spokesman, Mr. Wojick declined to comment on JAL's Airbus order. Boeing said it was "disappointed with the selection," but aims to continue the "strong relationship" with JAL it has built over the past 50 years.

Pitching jetliners is among the toughest jobs in sales. Multibillion-dollar orders for big passenger aircraft can take years to nail down. The process requires patience and a deep understanding of the strategic needs of the airline in question. And it depends on product-development cycles that can last up to a decade. Airbus began test flights of the A350 in June. Boeing's 777X is still five years away.

Mr. Wojick's playbook, say Boeing customers and industry executives, has included offering deeper discounts on its planes and greater flexibility on delivery timing. Inside Boeing, he also has been an advocate for customers' needs, which he says the company hasn't always adequately grasped.

Mr. Wojick "asks the right questions to understand the right metrics for [an aircraft-purchasing] decision," says Nico Buchholz, executive vice president of Deutsche Lufthansa AG. Last month, after years of deliberation, the German carrier awarded Boeing most of a $19 billion order that included 34 777Xs, an update of the company's long-range 777. Lufthansa also ordered 25 jets from Airbus, a unit of European Aeronautic Defence & Space Co.

Winning the Lufthansa commitment was Boeing's opening salvo against Airbus. The industry widely expects it to take advantage of next month's Dubai air show to give the official go-ahead to the 777X, and to snap up a wave of orders.

But the real test for Mr. Wojick will be which plane maker "has the stronger position in the widebody market five years from now. We don't know the answer today," says Howard Rubel, aerospace analyst and managing director of equity research at Jefferies LLC.

Mr. Wojick, whose boyish face is topped by graying hair, is an unusually low-key player in the big-ego world of jet sales. His counterpart at Airbus, John Leahy, is famous for firing rhetorical missiles at competitors. One of Mr. Wojick's predecessors at Boeing drove a red Porsche with the license plate JETDLR.

"I have no idea what my license plate number is," says Mr. Wojick, who drives an Audi TT.

"He's blissfully happy under the radar," says John Feren, executive vice president of aircraft lessor Aviation Capital Group, and Mr. Wojick's former boss at Boeing.

Mr. Wojick, the son of an airline pilot, studied aerodynamic engineering at the University of Colorado, then took a Boeing job in 1980.

He returned to Colorado to get his M.B.A., meeting his wife Beth in 1982 while he worked part time as a ski instructor. He later rejoined Boeing, rising through the ranks.

In a pivotal early sales deal in 1996, he beat out McDonnell Douglas, which later merged with Boeing, and Airbus, then much smaller than it is today, to replace the aging fleet of Continental Airlines.

Continental's then-Chief Executive Gordon Bethune, a former Boeing executive, says Boeing won in "large part…due to the care, attention and focus that Wojick put on the account."

Mr. Wojick's understated manner belies a sometimes-fiery temper, according to those who know him.

Amid 3½ years of delays in producing the Dreamliner, Boeing executives debated how to compensate customers who ordered the plane. Mr. Wojick, then the head of Asia-Pacific sales, argued that Boeing needed to do more for his customers, including JAL and ANA, the jet's first buyers.

In 2010, Mr. Wojick stormed out of an internal meeting after a heated discussion with Marlin Dailey, then Boeing's sales chief, according to people who attended.

"Quite frankly we were failing at meeting our commitment to our customers," Mr. Wojick recalls. "Some of us may have been able to handle our emotions a little better than others."

Mr. Dailey, now chief marketing officer at aircraft lessor AWAS, said Boeing was doing the best it could with limited resources. Both men have long since reconciled.

Boeing hasn't disclosed how it compensated Dreamliner customers for delays. Industry officials say it included cash payments and steep discounts on other jets, among other accommodations.

In July 2011, Boeing was caught off guard when American Airlines parent AMR Corp. split orders for 460 new airplanes between Airbus and Boeing in the largest aircraft order ever. The deal was a triumph for Airbus, which got its first orders from American in two decades.

Mr. Wojick says Boeing failed to understand American's needs. "For many, many years [American] struggled, and for many, many years we probably could have been better partners with them," he said.

The month after the debacle, Boeing replaced its sales chief, Mr. Dailey, with Ray Conner, who moved Mr. Wojick from Asia to head North American sales. In June 2012, Mr. Conner was named head of Boeing's commercial airplanes division.

The following month, Mr. Wojick landed an order from United Continental Holdings Inc. for 150 planes valued at around $14.7 billion at list prices, a critical win after allowing Airbus to make inroads with American. Mr. Wojick was named global sales chief that August.

Mr. Wojick's tenure started strong. Four months after he took over, Boeing reclaimed the title of world's biggest aircraft maker from Airbus, capturing the No. 1 spot in orders and deliveries for the first time in more than a decade.

But within days, the Dreamliner battery crisis surfaced. Mr. Wojick leaned on his relationships with JAL and ANA, trying to reassure customers while Boeing sought a solution to get the Dreamliner flying again.

"It takes hard work to have a clear conversation with a customer about what you do and don't know," he said. The Dreamliner resumed flights in April.

Investors seem sanguine about this week's JAL setback. Boeing's shares, up more than 50% this year, have fallen about 1.5% this week but are still trading near an all-time high.

But Boeing's status as top jet seller is tenuous: Airbus was outselling it this year even before the JAL deal, with 1,062 net orders through September to Boeing's 890, including more than 100 orders and commitments for a new version of its Dreamliner launched in June.

The battle to win orders for the long-range 777 against Airbus's A350 is especially intense. That fight threatens the Boeing cash cow and has turned into a "personal vendetta" between the two sales teams, said Steven Udvar-H├ízy, chief executive of Air Lease Corp.   "There's been a lot of venom that's built up fighting for campaigns" over the years.

Source:  http://online.wsj.com

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