Chicago ? Boeing Co. turned to an aerospace veteran to help repair the company’s strained government relations and lead its market-share battle with rival Airbus SAS, naming 3M Co. Chief Executive W. James McNerney Jr. its new CEO Thursday.

McNerney, 55, becomes the third chief executive of the airplane maker since December 2003, when former CEO Phil Condit resigned in the wake of a defense contracting scandal. His successor, Harry Stonecipher, was forced from his post in March after admitting he had an affair with a female Boeing executive.

Investors sent Boeing’s share price up $4.29, or 7 percent, to close at a four-year high of $65.96 Thursday on the New York Stock Exchange.

The appointment of McNerney – a Boeing director since 2001 who once ran General Electric Co.’s airplane engine business – bypassed two internal candidates who head Boeing’s largest business units.

Boeing had whittled its list of prospects to five or six earlier this month, including Alan Mulally, head of the commercial division, and Jim Albaugh, head of the company’s space and defense business.

On Thursday, outgoing Boeing Chairman Lew Platt, who will remain a director, said both Mulally and Albaugh have “expressed … their personal commitment to the company and to working closely with Jim.” Mulally is a graduate of Lawrence High School and Kansas University.

Many analysts said the selection of McNerney was a surprise only because he had publicly tamped down rumors in April that he was a top prospect, saying he would stay at 3M.

“He was someone who everyone wanted to be the guy,” said J.B. Groh, an analyst at D.A. Davidson & Co. “He has a great aerospace background and experience on the leasing side, too.”

McNerney said Thursday he was sincere in rebuffing Boeing’s advances this spring to stay at 3M but began having second thoughts earlier this month.

“It was a difficult decision, a late change of heart,” McNerney told analysts and reporters on a conference call. He also was named board chairman and president.

McNerney inherits a company performing well financially and gaining momentum in its commercial airplane business but still struggling to smooth over lingering tensions with the Pentagon and Capitol Hill.

Condit resigned in December 2003 as a result of defense contracting scandals that ultimately sent two Boeing executives to jail.

McNerney said he realized Boeing has a “bit of a hole to climb out of in a few places” but stressed he would place a large emphasis on business ethics.

Despite the recent turmoil, Boeing’s defense sales rose nearly 10 percent annually in 2003 and 2004, its commercial airplane orders are surging and its stock price has doubled in two years.

The Chicago-based company is engaged in a high-stakes battle for supremacy in the passenger jet industry with Airbus, which surpassed Boeing in commercial airplane sales the past two years.

Boeing has pitted its new, fuel-efficient 787 Dreamliner against its rival’s A380 “superjumbo,” betting that the airline industry eventually will favor long-distance, direct routes instead of the traditional hub-and-spoke model.

McNerney said he had no plans to tinker with Boeing’s commercial strategy, which has made big strides lately. Boeing has announced orders totaling 580 new airplanes already this year – more than double the 277 planes it sold last year.

He said Boeing was strong financially and its “strategy is in good shape,” indicating he will focus on executing Boeing’s business plan rather than implementing sweeping changes.

“It’s less big structural or financial or strategic fixes,” McNerney said. “It’s more becoming a part of the team.”

James Bell has served as Boeing’s interim president and CEO since Stonecipher’s departure and will remain chief financial officer.

Before joining 3M in 2001, McNerney held several executive posts at General Electric Co., including CEO of GE Aircraft Engines and GE Lighting and as an executive vice president of GE Capital.

Analyst Cai von Rumohr at SG Cowen Securities said McNerney’s experience heading GE Aircraft Engines – a Boeing customer – gives him a keen perspective.

“Because he knows the customer well, I think he’s going to be setting the right tone coming in to sustain the momentum they’ve recouped recently,” von Rumohr said.

He added that McNerney’s experience as head of GE Asia-Pacific in the early 1990s will be valuable as Boeing seeks the edge over Airbus in China, Japan, India and other key Asian markets.

Bill Dugovich, a spokesman for the Seattle-area chapter of the Society of Professional Engineering in Aerospace, Boeing’s second-largest union, said workers are hopeful McNerney’s tenure will bring better job security.

“Profits are up at the company but there’s still … fear for jobs, whether it’s divestiture or outsourcing,” Dugovich said, mentioning Boeing’s recent sale of its Wichita plant and a growing trend toward having more manufacturing handled overseas.

Boeing did not disclose McNerney’s compensation package. But Platt called it a “lateral move” from McNerney’s 3M package, which paid him a salary of $1.62 million and bonus of $3.52 million in 2004, according to Securities and Exchange Commission filings.

“There were no inducements, no big numbers to convince him to move,” Platt said.

3M’s share price fell $3.74, or 4.9 percent, to close at $72.30 on the New York Stock Exchange Thursday.