In the race for supremacy in the global passenger-jet market, Boeing is gaining quickly, but its pilot wants to keep the company's attitude grounded.

``Only the paranoid survive,'' said Boeing Chief Executive James McNerney, borrowing the famous line from former Intel Chief Executive Andy Grove. ``It's my job to keep everybody paranoid.''

It's hard to stay humble when the stock price jumps more than 30 percent in your first year at helm. Especially when, during the same period, the company's new airplane, the 787 Dreamliner, has sold like a dream come true. Then there's the icing: Archrival Airbus is living a nightmare of delays and setbacks.

Still, McNerney is keeping his enthusiasm in check, at least publicly.

``The business equation is pretty strong right now,'' he said in his typical understated manner in an interview with the Chicago Tribune.

But looking ahead to his second year and beyond, the math gets harder. Like it or not, McNerney's reputation is staked to an on-time first test flight of the Dreamliner next year, followed by the first delivery to a customer in 2008.

A successful rollout would give Chicago-based Boeing the upper hand for years to come and help erase any tarnish left from a series of high-profile ethics scandals.

Boeing is struggling with some manufacturing issues out of the gate with the 787. It's hardly an unusual occurrence on a new plane, but it nevertheless raises doubts about the plane's ambitious schedule.

With Airbus reeling on its two major development programs, McNerney also is coming under pressure to kick Airbus when it is down.

Booming orders for the 787 have prompted calls from inside and outside the company to increase production and sop up demand before Airbus can get its answer to market. Some also would like to see Boeing target Airbus' popular A320 by accelerating development of a new narrow-body plane to replace the 737.

``Airbus is vulnerable right now,'' said Brian Hollnagel, president of BCI Aircraft Leasing in Chicago. ``It is not nimble enough to respond to any change that Boeing can present them with. It's a good time to pick a fight.''

McNerney, who played hockey and baseball at Yale University, seems ready.

``I don't want us to be happy with ourselves,'' he said. ``I want us always to be striving for more no matter how successful we are.''

McNerney has lived by that philosophy since earning a master's degree from Harvard Business School in 1975. He started in brand management at Procter & Gamble before hopping to McKinsey. He didn't make his mark until landing at General Electric in 1981. In 19 years at GE, he steadily climbed the ranks before losing out in a three-way race to succeed Jack Welch as CEO.

His disappointment didn't last. It wasn't long before 3M snagged him to turn around the struggling manufacturer. In 2001, McNerney joined Boeing's board.

As a director, he saw firsthand how swiftly stellar companies can lose their direction, and not just financially. After the Sept. 11, 2001 terrorist attacks, Boeing saw demand for its commercial airplanes disappear, putting pressure on its military business to win new contracts. The burden, along with internal rivalries left over from a series of defense acquisitions, created a win-at-any-cost culture in pockets of the company, McNerney said.

The tab came due during a string of ethics crises that left Boeing's reputation in tatters, a chief financial officer in prison and two CEOs without jobs. The company last week finalized a $615 million settlement with the Justice Department on two separate criminal investigations into its defense business. The deal exacts one of the largest financial penalties ever imposed on a military contractor but allows the company to avoid criminal charges or any admission of wrongdoing.

When McNerney took the job in July 2005, replacing Harry Stonecipher, his priorities were what he calls ``hearts-and-minds kinds of issues,'' such fuzzy management concepts as culture, values and leadership.

``Command-and-control structures are good in some situations like the battlefield, but they can make people mute because they are used to taking orders,'' McNerney said. ``What you want is everyone's best ideas.''

He also addressed the cultural problems by tying executive compensation, in part, to ethical leadership.

McNerney has had the luxury to zero in on Boeing's cultural issues because the business is in good financial shape. The company booked a record 1,002 commercial aircraft orders last year, as airlines in Asia and the Middle East bought new planes to keep up with growing passenger and cargo traffic.

While the 737 was the biggest seller, the buzz was all about the Dreamliner, Boeing's first all-new plane in 10 years. Airlines are enamored with its lightweight structure and new engines that promise 20 percent better fuel efficiency than similar planes carrying more than 200 passengers.

In sharp contrast, Airbus' woes escalated last month when it revealed further production delays with its two-deck A380 super-jumbo jet, the world's largest passenger aircraft. The problems could pose a distraction to the European plane maker's plans to redesign the A350, its answer to the Dreamliner that has been criticized by some airlines for not measuring up to the 787.

While Boeing officials say the 787 is on track for delivery in two years, the company recently acknowledged a setback in the innovative manufacturing process being used to build the carbon-fiber-reinforced plastic barrel that will house passengers. Some have questioned whether Boeing can deliver the plane on time because it has outsourced more than half the structure of the plane to suppliers around the world.

The Dreamliner is McNerney's first big test of his management prowess.

For McNerney, building the plane on time and on budget comes down to leadership and accountability.

``When you get to the root cause of most failed programs, it's the leadership issue that's at the center of it,'' he said. ``That's why I'm so focused on it here.''

There's no room for cockiness even at a time of prosperity.

``The single biggest danger I see,'' McNerney said, ``is that your success becomes the seed of arrogance and then failure.''