The 51-year-old executive is leaving as head of General Electric's aircraft-engines business a week after being beaten by Jeffrey Immelt in the race to succeed Jack Welch. McNerney will take the position Jan. 1, said John Cornwell, a spokesman.
Minnesota Mining's CEO Livio DeSimone will retire in April. Investors have been pushing for an outsider to succeed him after the company's shares were little changed in the past three years while the Standard & Poor's 500 Index gained about 38%. McNerney is credited with helping make General Electric's aircraft engine business the largest in the world.
The appointment of McNerney breaks the 98-year-old company's tradition of promoting from within. McNerney's 10 predecessors have all been insiders. It hasn't selected a non-engineer as chief executive since 1929.
McNerney took over GE Aircraft Engines in 1997 when the industry was facing what was predicted to be the biggest commercial aerospace slowdown in 20 years. The business is now the biggest jet-engine maker, overtaking United Technologies Corp. and Rolls Royce Plc to claim 57% market share for commercial engines and $10.6 billion in sales last year.