More Turbulence Ahead For Boeing
Harry Stonecipher
(right) is stepping up as Phil Condit's in the top spot at Boeing.
He says his first job will be to restore the Defense Department's
faith in his company. That may not be easy.
Boeing is being shadowed these days by at least three scandals
involving its defense business. One centers on the recent
procurement of a $16 billion contract to sell the Air Force
modified 767s as air tankers. Boeing's CFO and a former Air Force
official who went to work for the company have been fired as the
investigation continues.
A second scandal involved Boeing's possible industrial sabotage
against Raytheon in the competition for a missile shield contract
in 2002.
The third scandal is the oldest. In 1997, Boeing won out over
Lockheed Martin in the race to build the military's Evolved
Expendable Launch Vehicle (EELV). A later investigation showed that
Boeing had thousands upon thousands of confidential Lockheed
documents with which the Chicago based company could outcompete its
rival.
Speaking with anchor Neil Cavuto on Wednesday, Stonecipher
admitted to Fox News the EELV incident still hurts Boeing.
"But we have lost a lot bigger contracts. And we’ll get on
to the next one. We wanted to do the right thing with this thing,"
he said. "As Phil said, we fired the people back when it happened.
And unfortunately, we say the company did something wrong, it is
that the company’s policies and procedures are really pretty
darned good. It is having people who violate them that gets us in
trouble, and dealing with that is what you have to do. Because it
really besmirches the reputation of the company and doesn’t
make the employees feel too good about it, either."
In spite of reassurances from both Condit and Stonecipher, the
stain on Boeing's reputation with the Pentagon continues to grow.
Last week, chief financial officer Michael Sears was fired for
behaving unethically. The Pentagon's inspector general is
investigating former USAF Deputy Assistant Secretary Darleen
Druyun. The probe centers on whether she gave Boeing inside
information on Airbus's bid on the "supertanker" project. The Air
Force, desperate to replace its decrepit KC-135 fleet, finally
awarded the $16 billion contract to Boeing. Investigators want to
know if Druyun traded the information for an executive gig at
Boeing.
In style, the suspicions are very similar to the Lockheed-Martin
scandal that began in 1997. Back then, a Lockheed executive jumped
ship and turned up at Boeing -- right around the time all those
documents showed up. The employee and his supervisor were drummed
out of the building.