Scandals have hurt us, admits top Boeing executive

A TOP BOEING executive has admitted the firm’s reputation has been damaged by the series of scandals that have rocked the company over the last two years.

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By  David Robinson Published  April 24, 2005

A TOP BOEING executive has admitted the firm’s reputation has been damaged by the series of scandals that have rocked the company over the last two years. The sudden ousting last month of Boeing’s former chief executive Harry Stonecipher for having an affair with an employee was the latest blow to the aerospace giant, whose previous CEO, Phil Condit, resigned 19 months ago in the face of an US Air Force contracting scandal. “There’s no question that our reputation has been impacted by the events over the last couple of years. It’s been a difficult time for everybody,” Jim Albaugh, Boeing’s executive vice-president and head of company’s the defence business, told Arabian Business. “The Boeing company is not defined by any one or two individuals,” he added. Albaugh is considered a front-runner for the top job following Stonecipher’s departure. But the actions of the last two individuals to head the firm cast a long shadow over its recent history. Condit presided over several controversial dealings with military contracts during his time in charge, including an air tanker-leasing deal designed to get around federal budget restrictions and an ill-timed offer to a government official before his seven-year reign came to an abrupt end in December 2003. The subsequent appointment of Stonecipher, who came out of retirement to return to work at the age of 67, was always intended to be short term. But nobody predicted that the widely admired executive would be toppled 14 months earlier than expected by the discovery of potentially embarrassing emails that he had written to a female executive with whom he was having an affair. Boeing’s stock price had, after all, soared under his short period at the helm. Stonecipher had been appointed specifically to put ethics back on the agenda at the firm after some of the murky dealings under Condit’s control. It therefore came as something of a surprise that his demise should occur because he breached the high ethical standards he himself had imposed on the company. The last couple of years have been “tough”, Albaugh said. “I’ll acknowledge that they’ve been tough and I’ll acknowledge that we’ve got to go forward and put this stuff behind us,” he said. Albaugh, who was in Dubai last week as part of a regional tour, is considered a leading internal candidate to replace Stonecipher, along with Alan Mulally, Boeing’s head of commercial aircraft. Albaugh, 54, is said to have earned the respect of lawmakers and US Defense Department officials for his efforts to embrace the continuing transformation of the military by improving communications and technology. However, his star may have faded somewhat over the past few years because most of Boeing’s high-profile missteps have been in the defence unit. Tim Coombs, managing director at London-based consultancy firm Aviation Economics, said the executive departures at Boeing had affected investors more than airline customers themselves. “Clearly, when you unexpectedly lose a CEO that will raise concerns and damage confidence of shareholders,” he said.

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