By Doug Cameron

Boeing Co. said Monday that it hired a General Electric Co. executive to run its commercial aircraft business as the company seeks to boost production and cut costs while branching into profitable areas such as selling spare parts.

The company said Ray Conner would step down as head of its commercial aircraft unit, with Kevin McAllister joining from GE to take over immediately atop the company's largest business unit.

The move cements Boeing's shift to generate more sales and earnings from providing aircraft services such as spares, data and maintenance, with Mr. McAllister having served as CEO of GE Aviation Services, the support arm of its big aircraft engine business.

It is unusual for Boeing to reach outside the company for executives, and Mr. McAllister, aged 53, is the most senior external hire since Jim McNerney was hired from 3M Co. as CEO in 2005.

It continues the series of senior management changes since Dennis Muilenburg took over as chief executive in July last year which have included the head of Boeing's defense arm and other leaders of its military and commercial aircraft units.

Mr. McAllister joined GE as a product engineer in 1980 and initially worked on developing commercial and military engines before moving into its customer support operation in 1998. GE is the exclusive engine provider for some Boeing jets, including the new 737 Max.

Mr. Conner, aged 61, will remain as Boeing's vice chairman before retiring at the end of 2017,and the company said he would work with Mr. McAllister -- who is head of GE Aviation Services -- on a transition "in the months ahead".

Boeing also said it would combine the service arms of its commercial and defense and space units in a new business unit led by Stan Deal, a senior executive in its existing shared services support business. Mr. Conner will assist in establishing the new unit, which is expected to be operational within a year.

The planned change comes as Boeing simultaneously boosts aircraft production and cuts jobs and costs to compete with Airbus Group SE.

Mr. Conner had been president and CEO of Boeing Commercial Airplanes since June 2012, and oversees its main aircraft manufacturing facilities around Seattle. He is on the board of Johnson Controls Inc.

Mr. Conner, who received $9.1 million in total compensation last year, joined Boeing in 1977 as a mechanic on its 727 jet program and rose through the ranks to lead its 747 and 777 jet lines.

Write to Doug Cameron at doug.cameron@wsj.com

(END) Dow Jones Newswires

November 21, 2016 17:52 ET (22:52 GMT)

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