By Jon Ostrower And Doug Cameron 

Dennis Muilenburg, Boeing Co.'s incoming chief executive, spent years working in the company's defense unit managing programs that often didn't come to fruition.

But people who follow his career say his experience brings two skills that could be critical to running the aerospace giant that is increasingly focused on the commercial jet business: an engineer's feel for tackling tricky design problems and a proven record for keeping costs down.

Mr. Muilenburg, 51 years old, takes over on Wednesday from Jim McNerney, 65, who has helmed Boeing since 2005 and will stay on as chairman indefinitely. Both men in an interview this week emphasized continuity in the transition, and analysts don't expect any immediate or sharp departures in strategy.

Still, Mr. Muilenburg has a very different background from his predecessor that is likely to shape how Boeing deals with big challenges in coming years, including sustaining its defense unit, profitably delivering a half-trillion dollars of jetliners that its customers have ordered, and possibly developing an all-new jet model.

Mr. McNerney, who graduated from Yale University and earned a master's in business administration from Harvard, worked at McKinsey & Co., Procter & Gamble Co., and bulk of his career at General Electric Co. before becoming CEO of 3M Co. He joined Boeing's board of directors in 2001.

Mr. Muilenburg holds a bachelor's degree in aerospace engineering from Iowa State University and a master's in aeronautics and astronautics from the University of Washington. He started at Boeing as an engineering intern in 1985, and returned after completing his senior year.

Since December 2013 he has served as president and chief operating officer, helping lead Boeing's push to use automation to cut the costs of developing and building commercial jets and weapon systems. People briefed on Boeing's decision-making say he also has been focused on addressing the looming challenge from China, viewed as a major long-term threat to Boeing's commercial-jet business as well as a key factor for its defense arm as the Pentagon focuses more resources on forces in Asia.

"First of all, he's an engineer," said Jim Albaugh, a retired chief executive of both of Boeing's commercial and defense and space businesses. "He likes to gather all the facts and data and to the extent that he can get a consensus he'll go for that. But at the end of the day he understands he's got to make the tough call."

Mr. Muilenburg, say those who have worked with him, has enormous energy. The Iowa-born engineer-turned-executive is known for guzzling fluorescent yellow Diet Mountain Dew in lieu of coffee and rides his bike 120 miles each week around Chicago. Mr. Muilenburg said recently that he is on pace for riding 6,000 miles this year.

Prior to becoming president and chief operating officer, he headed Boeing Defense, Space & Security--a job he inherited from Mr. Albaugh in 2009. That division's share of Boeing's revenue declined to about 34% last year from roughly half five years ago, amid dwindling defense budgets and the phasing out of some of its big products like the C-17 military transport jet.

But Mr. Muilenburg is credited with increasing the unit's operating margin to 10.8% in 2013 from 9% in 2009. He did so, in large part, by cutting jobs--9,000 staff, or 15% of the unit's workforce, in his first two years--and closing facilities, but he also maintained higher research spending that drove efficiency gains.

"Dennis showed that he could take cost out of the business, hold margins through declining rates," said Byron Callan, an analyst with Capital Alpha Partners LLC.

Those financial skills are essential for Boeing's commercial business, which is under pressure to bring down the cost of its flagship 787 and the rest of its products amid intense competition with Airbus Group SE for sales to global airlines that have become acutely price-conscious.

At the same time, Mr. Muilenburg demonstrated a willingness to take some risks during his years in Boeing's engineering ranks.

Mr. Albaugh said Mr. Muilenburg first came to his attention during work on the planned Joint Strike Fighter. The young engineer held various positions organizing Boeing's bid for the Defense Department's biggest-ever acquisition project, in which the company faced off against Lockheed Martin Corp., which ultimately won the bid.

Mr. Muilenburg was featured prominently in a documentary by the public television program NOVA on Boeing's fight against Lockheed, which showed him in his mid-30s having a bit of swagger.

"When I daydream, I see it hovering; I see it taking off from airfields; I see it operating around a ship," said Mr. Muilenburg of Boeing's design for the fighter. "And sometimes I even see it shooting down the Lockheed airplane."

Mr. Muilenburg presided over one of the Boeing program's crucial design decisions, about whether the planned fighter should include a new design for its tail that some engineers thought could make it harder to detect but others argued might not be practical to build. Taking the pulse of the assembled engineers in one scene in the documentary, Mr. Muilenburg was the tiebreaking vote in favor of the new design.

"We're nervous about some things, so let's go figure out how to make it work," Mr. Muilenburg said in the scene. His decision was overruled by more senior executives in the program, who chose the more conventional, less-risky approach. But his effort had made an impression on senior leaders, recalled Jerry King, former head of Boeing's defense business. Mr. King said in an interview that Mr. Muilenburg was acutely aware of the big picture, while balancing all the competing requirements for the advanced jet.

Boeing frequently moves its most-promising younger executives from project to project, exposing them to different areas of the company. After 14 years designing jets and military systems in Seattle, Mr. Muilenburg was pulled from the fighter team to lead a new unit near Washington, D.C., selling air-traffic management services.

He drove across the country with his young family and seven pets. Ten days after he arrived, the terrorist attacks of Sept. 11, 2001 delivered a crushing blow to air travel, leading Boeing to sharply scale back the fledgling unit.

A month later, Boeing lost the fighter contest to Lockheed, leaving Boeing out of the world's largest military program. Such misses aren't uncommon in the high-stakes defense business. Mr. Muilenburg later said the move from Seattle actually helped his career.

"Looking back on that time period I probably grew more as a leader during that year than any other time in my career," Mr. Muilenburg said at a conference in 2012. "And it was something that, originally, I didn't even want to do."

Mr. Albaugh promoted Mr. Muilenburg to head the Future Combat Systems project, a sprawling $160 billion effort to modernize the U.S. Army's ground vehicles.

The project didn't succeed. It was canceled in 2009 after projected costs spiraled, and the fallout has been largely limited to the Army's changing requirements rather than missteps by Boeing.

"He's been groomed well, enjoyed successes and confronted lackluster outcomes as well," said one former military leader who worked closely with Mr. Muilenburg.

Mr. Muilenburg faces a tightrope walk between competing interests, being a shareholder darling while carrying the banner for American innovation.

"It's what their shareholders want, generate a lot of cash, don't take big risks," said Mr. Callan. "It's different from the Boeing of old, it's different from the aerospace industry of old."

Write to Jon Ostrower at jon.ostrower@wsj.com and Doug Cameron at doug.cameron@wsj.com

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