Posted on 03/09/2005 9:34:36 PM PST by Paleo Conservative
NEW EXECUTIVE: The firm needs to make a fresh start after several scandals, but there are limited people outside the company who are qualified for the job
AP , SEATTLE
Wednesday, Mar 09, 2005,Page 12
With its chief executive's office vacant for the second time in less than two years, Boeing Co faces a tough choice: whether to promote an executive familiar with the company's complex inner workings, or turn to an outsider who is perceived as completely clear of its ethics scandals.
It's a difficult decision that analysts say could end up pitting experience against image.
"When you have a situation that's just one scandal after another after another after another, [then] sometimes you have to go outside to bring in someone who is recognized to be a squeaky Mr Clean, to have a complete break with the corporate culture," aero-space analyst Scott Hamilton said.
But analyst Paul Nisbet with JSA Research said that a push to find someone who cannot possibly be tied to Boeing's ethical lapses could also force the company to pass over internal candidates who are ultimately better for the job.
"The one possible impact is that in their quest to find a squeaky-clean guy, they may have to take someone who's not as well-qualified," Nisbet said.
On Monday, Boeing said Harry Stonecipher -- brought back from retirement to help clear Boeing's tainted name -- was forced out after revelations that the married executive violated the company's code of conduct and had an affair with an unnamed female Boeing executive. Stonecipher had replaced Phil Condit, who resigned in December 2003 amid defense contracting scandals that ultimately sent two executives to jail.
Hurdles ahead
The difficulties in finding a new leader are compounded because Chicago-based Boeing faces several big business hurdles in the coming months.
Boeing has said it will decide by mid-year whether to halt production of its 767 airplane. The fate of the production line is in limbo while the Pentagon reconsiders an air refueling tanker contract marred by the scandal that forced Condit out.
The company also may decide soon whether to sell a new version of its jumbo 747, and is also working feverishly to win orders for its new 787, due to enter service in 2008.
"The timing of this couldn't have been worse,'' said J.B. Groh, an analyst with DA Davidson in Portland, Oregon.
Boeing has said it will consider candidates both inside and outside the company, and the company reassured investors that it intends to move quickly.
Top candidates
Many analysts believe the top inside candidates include Alan Mulally, who runs Boeing's Seattle-based commercial airplane division, and Jim Albaugh, who heads the company's defense operation.
Groh said Mulally may have an edge over Albaugh because he has managed to make the commercial airplanes operation much more efficient, while also dealing with a long and fierce downturn in the airplane market. The international airplane market is beginning to improve, but Mulally -- and Boeing -- face tough competition from rival Airbus SAS.
Albaugh, in turn, may see his chances hurt by lingering concerns about ethics lapses in the defense side of the business. Besides the tanker scandal, Boeing was barred for 20 months from bidding on satellite launch contracts after accusations that it stole information from competitor Lockheed Martin in 1998. The US Air Force lifted that ban on Friday.
Boeing declined to comment on whether Albaugh or Mulally were in the running.
Analysts noted it will be especially difficult to find an outside candidate with the multinational manufacturing and operational experience needed to run an operation as complex as Boeing.
"It's a pretty limited pool of people," Groh said.
One possible candidate is board member Jim McNerney, who heads St Paul, Minnesota-based 3M Co but has experience in aerospace because he served as head of GE Aircraft Engines.
3M spokeswoman Jacqueline Berry said that was "speculation."
"Mr McNerney says he's very happy at 3M and has no plans to leave in the foreseeable future," she said.
* Alan Mulally, who runs Boeing's Seattle-based commercial airplane division. He has been lauded for improving efficiency* Jim Albaugh, who heads the company's defense operation. His candidacy may be marred by some ethical scandals
* Jim McNerney, head of St Paul, Minnesota-based 3M Co. His experience in the industry as head of GE Aircraft Engines has drawn attention
The firm needs to make a fresh start after several scandals, but there are limited people outside the company who are qualified for the job
Jimmy Carter and Bill Clinton are available.
If you want on or off my ping list, please contact me by Freep mail not by posting to this thread.
Ok, I'll do it.
Don't cut in line. I'll do it, then get fired and receive a generous golden parachute. Stonecipher is getting 1.8 million shares of Boeing stock worth over $103 million.
The woman with whom he was having the affair should go too.
WOW.
It's good work, if you can get it.
"there are limited people outside the company"
So .... maybe there's someone INSIDE the company who knows their way around the boardroom.
What's the woman's name? Does she pay no price for seducing the old CEO, ending his career, and possibly ruining his long term marriage? Why should Stonecipher automatically be fired? Are these policies good for American industry?
A great guy with a keen analytic mind who also happens to be a BOEING product and not an import from MD.
Whoever takes over from Harry the Horrible will have to take the gloves off Boeing's sales staff and allow the sales staff to cut deals. A MAJOR REASON why the boys from Toulouse are kicking Boeing's tail has been that while Airbus allows its sales group considerable leeway in negotiating pricing, Boeing's sale team has to go through several levels of bureaucratic approval to do so. This is an asinine way to do business.
Speaking of Airbus, I saw John Leahey, Airbus's chief commercial officer, speak yesterday. OUTSTANDING speech from a master salesman.
There is an article in the Wednesday (3/9/05) edition of
the Chicago Tribune about this titled "Boeing affair inquiry turns to other party." Here is a quote from the article:
"An investigation into her actions is continuing," said a company spokesman. Among the things being looked at is whether the executive may have traveled at company expense or spent other company money in connection with the affair.
Read this thread. Apparently Boeing is investigating this further.
Boeing investigates Stonecipher's affair
Posted on Wed, Mar. 09, 2005CHICAGO - Boeing Co. is investigating the activities of the female executive whose affair with then-CEO Harry Stonecipher led to his ouster and could take action against her, the company said Wednesday.
Spokesman John Dern said the company has no timetable for completing the investigation and declined to provide any other specifics. But a posting on Boeing's internal employee Web site acknowledged that "many employees have asked" why the woman who was involved in a personal relationship with Stonecipher remains with the company while he was asked to resign.
"General Counsel Doug Bain said that while the investigation of Stonecipher is complete, the investigation of the female executive's actions surrounding the matter is still in process," said the posting, obtained by The Associated Press. "If the facts of the completed investigation indicate that action is warranted, it will be taken, Bain said."
A Boeing source with knowledge of the investigation who asked not to be identified, said management is examining the woman's recent travel, expenses on her company credit card and any other areas where inappropriate conduct might have occurred.
The woman was identified Tuesday night by BusinessWeek Online, citing anonymous sources, as Debra Peabody, a 48-year-old divorced executive who reportedly first met Stonecipher in January at Boeing's annual executive retreat in Palm Desert, Calif. The Wall Street Journal and The New York Times also named Peabody on Wednesday, citing unidentified sources.
Peabody, who manages office operations for Boeing in Washington and worked earlier for the company in Chicago, did not return telephone calls Wednesday. Boeing declined to confirm or deny she was the female executive involved.
Stonecipher resigned Sunday at the board of directors' request after acknowledging the affair, which was initially reported to company officials in a letter from an employee that was accompanied by a packet of material as evidence.
Chairman Lew Platt, who lauded the 68-year-old chief executive's performance at Boeing even while announcing his ouster on Monday, said the dismissal was prompted not by the consensual relationship itself but by Stonecipher's conduct, which violated the company's ethics code. That code states in part that employees shall not engage in conduct that "may cause embarrassment to the company."
Boeing officials have not disclosed more details. But the company source said Wednesday that "inappropriate" e-mail exchanges between the two, included in the tipster's packet, "played a part" in Stonecipher's ouster.
"Analysts noted it will be especially difficult to find an outside candidate with the multinational manufacturing and operational experience needed to run an operation as complex as Boeing. "
Agreed.
"It's a pretty limited pool of people," Groh said. "
Oh, I dunno. . .how about every congressman and senator. . .they seem to know all.
If called, I will serve!
You have to be careful with what you allow sales to do. Worse case, they can tube a company by making deals that can't be met by engineering and production, and still make a profit. Boeing isn't as exposed as companies that do custom orders, but it's still a risk.
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