Boeing Chief: I'm Still In Charge
At the conclusion of a two-day board of directors meeting, Boeing Chairman Phil Condit took the unusual step of sending a memo to his managers telling them that he's still in charge.
Boeing has been reeling from a seemingly never-ending stream of bad news from its commercial airplane division, which has lost billions of dollars over the past year. Earlier this month, Boeing announced it would cut 48,000 jobs over the next two years, decrease aircraft production, and was forecasting lower profits for 1999 than it earlier had hoped.
A number of Boeing executives have been pushed out or taken early retirement, and speculation was heavy that Condit might lose his job during the board meeting Sunday and Monday. As it turned out, however, the only public announcement from the meeting was from Condit, that Boeing would issue a quarterly dividend of 14 cents a share.Condit, however, sent an e-mail late Monday to Boeing managers asking them to ignore the rumors and concentrate on getting the company back on track.
"Many, if not all of you, have heard or read media speculation about senior management changes. Rumors do not contribute to doing the job that we have before us, so let me put them to rest," Condit wrote.
"The senior management team is in place and dedicated to two things improving the profitability of The Boeing Company and securing its long-term future."
Condit said the board reviewed Boeing's three different business segments. The military aircraft and missile systems business is profitable, he said, and the board was looking at ways to grow the business. He said Boeing is investing heavily in space and communications, so near-term profitability would be depressed, although the future looks good.
"Commercial Airplanes is meeting delivery plans but must make significant changes to achieve its profit potential," Condit wrote.
"I expect every Boeing person to contribute to these tasks by doing what we do best focusing on our customers and working to find solutions to the problems that face us, Condit concluded. "Enough of the rumors and speculation; let's prove how good we are."
Much of the speculation has centered on Boeing President Harry Stonecipher taking over Condit's post. Stonecipher, who led McDonnell Douglas before Boeing bought the company last year, is seen by many as a tougher businessman and manager than Condit, an engineer who rose through the ranks at Boeing.
"Could Harry change the fundamentals so that the commercial margins in 2000 would be better?" asked analyst Peter Asertis of Credit Suisse First Boston. "I'm not sure. But he would be more proactive. It's not Phil's nature to walk in and tell a guy he has three months to turn this around. Harry is much more direct."
The fact is, Asertis said, "The company has not done well, and Phil's the boss. But will he be replaced? No one but the board knows."