updated 10/17/2007 8:13:37 AM ET 2007-10-17T12:13:37

Less than a week after announcing a delay in its new 787 jetliner, Boeing Co. said Tuesday it is replacing the executive who has led the program for the past three years.

Pat Shanahan, who served as head of two previous widebody jet programs at Boeing before moving over to the company's military unit five years ago, will replace Mike Bair as vice president and general manager of the 787 Dreamliner program.

Bair was named vice president of business strategy and marketing for the company's Seattle-based commercial airplanes division, the same job he held a few years before being named head of the 787 program. He'll replace Michael Cave, who is taking a similar job at the company's corporate headquarters in Chicago.

In a statement announcing the moves, Scott Carson, chief executive of Boeing's commercial airplanes unit, praised Bair while saying Shanahan is now the right person for the job.

"Pat's experience and proven record managing demanding and complex programs will allow him to build on the 787 team's success as we tackle the challenges we face bringing our new production system fully on line," Carson said.

Boeing would not have kept Bair in a high-level position if it had lost complete confidence in him, but replacing him is a strong statement that new leadership is needed, said Richard Aboulafia, an analyst with the aerospace and defense research firm Teal Group.

"Given the timing, they might have decided that a fresh face would be best, would inspire confidence," Aboulafia said.

Boeing shares rose $1.11, or 1.2 percent, to $95.94 on Tuesday, then added another 40 cents in after-hours trading.

Boeing's stock had been slipping since Oct. 10, when the company announced it was delaying its first delivery of the 787 by six months to November or December 2008 because of problems it's encountered assembling the first few planes.

Boeing has had to do more work on the final assembly line than its production process was designed to handle because suppliers making large sections of the plane have sent them to the factory without first installing electrical wiring and other systems.

Boeing rescheduled work to give suppliers more time, so the plane can simply be fastened together on the assembly line — a process the company has said eventually will take only three days.

Flight testing is scheduled to begin by the end of first quarter 2008. Boeing said it expects to deliver 109 787s through the end of 2009, three fewer than its original plan.

Shanahan, 45, was named head of Boeing's 767-400ER program in 1999, then became chief of the 757 program the following year, succeeding Bair.

He moved to Boeing's Integrated Defense Systems unit in 2002, leading the Philadelphia-based division that makes helicopters and other rotorcraft. In 2004, he became head of the company's missile defense systems unit, headquartered in Washington, D.C.

In his new role, Bair will remain closely involved with the 787 program "and will take that expertise and track record to leading our next steps on future products, services and strategy," Boeing spokesman Jim Schlueter said.

Bair, 51, started out at Boeing in 1979, working as an aircraft noise engineer on the 767, and rose up through several management jobs in marketing before being named vice president and general manager of the 757 program in 1999.

Bair was named head of business strategy and marketing for Boeing's commercial unit in 2000. He spent about a year and a half leading the commercial aviation services department before being named head of the 787 program in 2004, the year Boeing won its first order for the plane.

Carson gave Bair credit for taking the 787 "from a concept to a market-leading position," noting that the company has won 710 orders from 50 airlines. The plane is sold out through late 2013, the same year Airbus' competing A350 is expected to hit the market.

Airbus has won 176 orders plus 98 nonbinding commitments from 16 customers for the A350, which it had to invest heavily in redesigning after airlines weren't happy with the original plan.

The 787 will be the first large commercial jetliner made mostly of light, sturdy carbon-fiber composites rather than aluminum, making it more fuel-efficient and cheaper to maintain. Airbus's A350 will also be made largely of composites.

Boeing declined to make either Bair or Shanahan available for interviews Tuesday.

In other moves announced Tuesday, Boeing named Shephard Hill as president of Boeing's international division, replacing Laurette Koellner, who is retiring. Cave, whom Bair is replacing, will become senior vice president of business development and strategy at Boeing's corporate headquarters, assuming the job Hill is vacating.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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