Airbus and Boeing products running behind schedule

[Samsonite 181]

Who cares?

Anyone that hasn't become so twisted they can't tell night from day....

Edited October 19, 2007 by Scalawag

[CheshireTom 1,377]

BTW, Cheshire, who were you quoting. Do you have a link to the source to go with your cut and paste?

 

Jon Markman on MSN Money. Pretty good call by him, don't you think?

 

Can you please try and post in the correct threads though. This is about aircraft delays. There is another thread (the kicking Euro butt thing) for the WTO nonsense etc etc. It would be a shame if people got sidetracked.

Edited October 19, 2007 by CheshireTom

[BigDUSA 71]

Lets get back on topic ....... how's the home made ship coming along?

Is that BigD's home made ship that he's going to pilot to Laem Chabang to start his new life ........

 

Once again ILMAOAY.

[CheshireTom 1,377]

BigD,

 

You started a thread praising the fact the 787 was on schedule to fly in 2007. It seems to me that you have had precious little to contribute since that was proved to be just another one of your Walter Mitty moments.

 

Don't you ever get anything right?

[BigDUSA 71]

BigD,

Don't you ever get anything right?

 

Yes when I LMAOAY.

[wacmedia 277]

Anyone that hasn't become so twisted they can't tell night from day....

 

Hi,

 

My friend, he has a legitimate grievance against the company and is entitled to get recompense.

[eltib 54]

Hi,

 

My friend, he has a legitimate grievance against the company and is entitled to get recompense.

 

Don't' worry about Scally. Well I just called the job shop. They closed out the position. Probably because my job shop overbid again, after i told him to drop my labor price to $20-22 per hour, I have also filled out my complaint against Boeing, and initiated it as of now..

Edited October 22, 2007 by eltib

[wacmedia 277]

Hi,

 

Historic day for aviation.

 

[BigDUSA 71]

Hong Kong's Cathay Pacific Airways has ordered 10 of Boeing Co.'s new 747-8 cargo planes and seven long-range 777 passenger jets, the companies said Thursday.

 

Terms of the deal were not disclosed. Boeing said the planes were worth $5.2 billion at list prices, though airlines typically negotiate substantial discounts.

 

Cathay Pacific said the 747-8 freighters will replace seven older Boeing 747-200 aircraft in its fleet, boosting the airline's total cargo capacity.

 

The airline's current fleet includes 19 Boeing 747 freighters. Eight others were on order before Thursday's order for 747-8s, a stretch version of the four-engine jumbo jet which Boeing is scheduled to deliver to its first customer in late 2009.

 

To date, Boeing said it has received 73 orders for the 747-8 from eight customers.

 

Cathay Pacific's 777-300ERs will fly nonstop routes to North America and Europe. Chief Executive Tony Tyler told reporters in Hong Kong that the airline plans to buy more 777s sometime in the future because of robust demand on those routes.

 

Cathay Pacific has said the Boeing 777-300ER will become the backbone of its long-haul fleet, replacing the slightly larger Boeing 747-400.

 

Boeing said Cathay Pacific's latest 777-300ER purchase adds to a previous order for 19 of the widebodies, the first of which came in September. The airline's previous order included four 777-300ERs it plans to lease.

 

Cathay Pacific said it also has taken purchase rights for 14 additional 747-8 freighters. Purchase rights are commitments that do not reserve slots in the production line and are subject to availability.

 

Cathay Pacific said its current fleet of 110 planes will grow to 147 planes by 2012.

[CheshireTom 1,377]

Your article doesn't mention any delay to the 748F .........

 

Anyway, since MM locked your Boeing is Kicking Euro Butt thread (you know the one where Boeing was going to overtake Airbus as th No1 commercial aircraft producer) I thought it might be nice to highlight that you have probably managed to retain your consistency to get your all predictions hopelessly wrong ...

 

 

Airbus Still The Biggest Aircraft Manufacturer In 2007, Beating Boeing For The Fifth Straight Year

November 12, 2007 8:49 a.m. EST

 

 

Dubai, United Arab Emirates (AHN) - European aircraft manufacturer Airbus SAS said it will remain the biggest jetliner maker in 2007, beating American archrival Boeing for the fifth straight year.

 

Airbus Chief Executive Officer Tom Enders said it could clinch more than 1,111 orders this year, topping the record it set in 2005. But more importantly, it would have delivered more than 450 airplanes by yearend, compared with Boeing's 445 planes. Boeing was already 60 orders behind Airbus at the end of October.

 

The Toulouse-based company even widened the lead over the U.S. competitor when it secured a whopping $46 billion worth of commitments at the Dubai Air Show which opened on Sunday.

 

Boeing only managed to corner at least $25 billion worth of orders from Emirates, recognized as the world's fastest-growing airline, Dubai Aerospace Enterprise, and Qatar Airways.

 

The U.S. company remains hopeful it will give Airbus a good fight for the No. 1 spot next year when North American airlines replace older planes.

 

No wonder the EU taxpayer is laughing all the way to the bank

Edited November 12, 2007 by CheshireTom

[BigDUSA 71]

No wonder the EU taxpayer is laughing all the way to the bank

 

Once again the Eu taxpayer is being asked to pony up 'launch aid' for the 350 and the break even point on the 380 is hugh. Me thinks their crying to the bank. EU taxpayer Airbus

[CheshireTom 1,377]

Once again the Eu taxpayer is being asked to pony up 'launch aid' for the 350 and the break even point on the 380 is hugh. Me thinks their crying to the bank. EU taxpayer Airbus

 

hugh .......... is that somewhere between high and huge?

[wacmedia 277]

Anyway, since MM locked your Boeing is Kicking Euro Butt thread (you know the one where Boeing was going to overtake Airbus as th No1 commercial aircraft producer) I thought it might be nice to highlight that you have probably managed to retain your consistency to get your all predictions hopelessly wrong ...

 

Hi,

 

Go easy on the big guy. At least he is consistent. Consistently wrong.

[eltib 54]

Hi,

 

Go easy on the big guy. At least he is consistent. Consistently wrong.

 

[sabang 0]

Both Boeing and Airbus are having record years, but the Dubai airshow has minted it for Airbus, $85bn worth of orders.

 

"Airbus signs Yemenia as Dubai orders soar

Tue Nov 13, 2007 12:32 PM GMT

By Jason Neely, European Aerospace & Airlines Correspondent

 

DUBAI (Reuters) - Airbus (EAD.PA: Quote, Profile , Research) said on Tuesday it expects at least 290 plane orders from the Dubai Air Show, where its battle with Boeing Co. (BA.N: Quote, Profile , Research) has dominated some $85 billion in announcements this week....

 

"We're having a record year, Boeing is having a record year," said Airbus sales boss John Leahy.

 

"It looks like quite the record show. It's 290 orders, over half of which are firm. The others will be firm within 30 days," he told reporters.

 

The show, which ends on Thursday, has already dwarfed the total of $21 billion in new business announced when last held in 2005 and has put Dubai among the world's biggest aerospace events alongside shows in Paris and in Farnborough, England.

 

Such demand has put the Dubai Air Show among the world's top aerospace events. The Paris show in June was also surprisingly large, with France-based Airbus announcing deals for 425 planes versus 81 for Boeing."

 

http://investing.reuters.co.uk/news/articl...-AIRSHOW-DC.XML

 

As the article points out, Airbus tend to hold up their order announcements until Airshows, Boeing announces them as they come. 425 orders for Airbus in Paris, 290 from Dubai. You would have to be a brave person to be predicting their demise.

[CheshireTom 1,377]

As the article points out, Airbus tend to hold up their order announcements until Airshows, Boeing announces them as they come. 425 orders for Airbus in Paris, 290 from Dubai. You would have to be a brave person to be predicting their demise.

 

That's really only half the story. In most cases it's up to the airlines when the announcements are made, not the manufacturer. Because a large chunk of Airbus business comes from private or state-owned businesses the announcements can be timed to maximise the "news". However, in the case of listed companies they have no option but to make the announcements as they come because of stock market rules on disclosure, particularly in the case of significant orders such as British Airways.

Edited November 14, 2007 by CheshireTom

[BigDUSA 71]

A French inquiry into possible insider trading at EADS, the parent company of Airbus, has gained momentum after the country's financial market regulator submitted documents about the investigation to prosecutors.

 

A spokeswoman for the Paris prosecutor confirmed Wednesday that Xavière Simeoni, the investigating magistrate who began looking into the share transactions a year ago, had received the report from the regulator, the Financial Markets Authority, or AMF. She declined to discuss its contents because the investigation was continuing.

 

A spokeswoman for the regulator said, "French law requires us to transmit this information, without delay, once there is evidence likely to qualify as a crime." She declined to specify when the evidence that prompted the notification was obtained. The regulator said in a statement that the documents, which it filed in early September with prosecutors, formed part of a continuing inquiry that was not expected to conclude before the beginning of 2008.

 

The case centers on whether executives of EADS, formally European Aeronautic Defense & Space, and Airbus were aware of serious problems with the production of the Airbus A380 superjumbo jet when they exercised stock options from November 2005 to March 2006 - months before the plane's difficulties became public in June 2006.

 

The French newspaper Le Figaro reported Wednesday that it had been shown copies of a "preliminary note" filed by the AMF indicating that the investigation was focusing on 21 top managers, including the two co-chief executives of EADS at the time, Noël Forgeard and Thomas Enders, as well as Arnaud Lagardère and Manfred Bischoff, who were the co-chairmen. Le Figaro said the regulator had identified as many as 1,200 individuals who had engaged in suspect trading of EADS shares.

 

The regulator also cited a December 2005 memo addressed to Thierry Breton, then the French finance minister, warning that EADS would soon enter a "zone of turbulence" and advising the government to pare its 15 percent stake, the newspaper said.

 

The AMF declined to comment on the details reported by Le Figaro.

 

EADS said that it was "most surprised" by the publication of details of the agency's report and said it considered the leak an unlawful breach of the investigation's confidentiality and the principle of the presumption of innocence. EADS already is in the middle of a restructuring of Airbus in which it plans to cut more than 10,000 jobs across Europe and sell up to seven factories.

 

Airbus is scheduled to deliver its first completed A380 jet to Singapore Airlines on Oct. 15, nearly two years behind schedule. EADS has said manufacturing delays will probably reduce its earnings by more than $6 billion from 2006 to 2010.

 

A number of the individuals named in the regulator's report continue to hold senior positions at Airbus - notably Enders, who is now Airbus chief executive; his No. 2, Fabrice Brégier; John Leahy, the head of customer relations; and Tom Williams, the head of aircraft programs. An Airbus spokeswoman said all four executives had declined to comment on the regulator's report.

 

EADS has consistently maintained that share trading by its executives was in line with company regulations and was done with the approval of the company's compliance officer. But the regulator's findings, if true, suggest that a far larger circle of company insiders may have been involved in suspect trades than was initially believed.

 

In June 2006, when EADS acknowledged that deliveries of the A380 would be delayed by six months - sending its shares tumbling 26 percent - attention focused on Forgeard and his children, who together exercised options worth nearly €10 million from March 9 to March 15, 2006, earning more than €2.5 million, or $3.5 million at current exchange rates, in profit, according to regulatory filings. Forgeard, who has insisted that he did nothing wrong, was ultimately pressed to resign his EADS post.

 

A lawyer for Forgeard did not return calls seeking comment Wednesday.

 

Lagardère, who stepped down as the EADS co-chairman in July, is chairman of the Lagardère Group, which owns 7.5 percent of EADS. On Wednesday, he swiftly rejected what he said were unfounded accusations. In a statement, the Lagardère Group said that it would pursue "all legal actions needed" to obtain compensation for damages suffered by the leaking of the report's contents.

 

Breton, the former minister, dismissed the report, telling Le Monde: "The state's conduct was irreproachable."

 

Le Figaro cited a memo submitted to the regulator by an unidentified author in which Breton was advised, following a board meeting on Dec. 2, 2005, that it would be "opportune for the state to profit from the current value of the shares, which incorporates only the good news of the last financial year."

 

France continues to hold a 15 percent stake in EADS.

 

Frederik-Karel Canoy, a lawyer representing individual French shareholders of EADS, said that the group had filed a complaint Wednesday against Breton, alleging his "complicity" in concealing the A380's troubles.

 

"If he had knowledge of the problems, then as the minister he was obliged to inform the public and all shareholders," Canoy said.

 

The market regulator's submission follows a similar move in July by Germany's financial market regulator, which submitted evidence of possible illegal share trading to prosecutors in Munich, where EADS has its German headquarters. The German case appears to be far more limited in scope, however, and concerns just five individuals, none of whom are company managers.

 

Louis Gallois, the chief executive of EADS, who did not sell shares at the time, tried to play down the findings, saying his job was to ensure that managers are not distracted by the negative publicity, according to The Associated Press.

 

"We are entering the period of convalescence," Gallois said.

 

 

 

Interesting story of possible top level mangement at Airbus involved with insider trading. Is this an example of Euro ethics, I had explained to me in a previous post????????????

Edited November 15, 2007 by BigDUSA

[eltib 54]

Big D,

 

Since you're pointing out history of Airbus transgressions. Let me post one on Boeing.

 

Boeing What Really Happened

Flawed strategy. Lax controls. A weak board. Personal shortcomings. CEO Phil Condit lasted longer than he should have

 

Business Week 12/15/03

author: Stanley Holmes

(Copyright 2003 McGraw-Hill, Inc.)

 

 

 

 

The really surprising thing about Philip M. Condit's resignation as chairman and chief executive officer of Boeing Co. (BA ) was not that his seven-year tenure ended so abruptly on Dec. 1, but that it lasted so long. Recent allegations of questionable conduct by a Boeing executive involved in negotiating an $18 billion deal with the Pentagon was only the latest mishap in a series of ethical lapses and managerial blunders that marred Condit's tumultuous reign from the start.

 

Condit's resignation has been portrayed as the selfless gesture of a leader who put the company's interests before his own. In fact, Condit had survived an array of crises before this latest upheaval, and the chairman had no intention of bailing out this time, according to people who are close to the company. But with its crucial defense business in jeopardy, a board that had overlooked missteps before finally took firm action. The CEO had to go. Under pressure from the board, Condit offered his resignation. According to an old friend who talked to him on Monday night, the CEO was distraught. Condit and Boeing insist his exit was voluntary.

 

A BOLD VISIONARY The story of Philip Murray Condit, 62, is the tale of a manager promoted beyond his competence and blind to his own shortcomings. The skills that made him a brilliant engineer -- obsessive problem solving and an ability to envision elegant design solutions -- were of less use in an executive position. Although always a bold visionary, Condit was frequently indecisive and isolated as a CEO -- in stark contrast to his predecessors. Starting with founder William Boeing, the company has been led by a succession of strong, commanding leaders who enjoyed near-total autonomy, displayed unwavering devotion to a culture of engineering and manufacturing excellence, and led modest personal lives. Condit may have enjoyed a similar degree of latitude, but he was further removed from the company's operations. He also developed a reputation as a womanizer, often with Boeing employees, and an appetite for the high life. In a hiatus between one of his four marriages,Condit took up residence in the Boeing suite at Seattle's Four Seasons Olympic Hotel, where he had the suite remodeled at company expense to add a bedroom, say some people who are familiar with the matter.

 

His troubles started almost as soon as Condit moved into the CEO's office. Within a year, he had steered Boeing into a manufacturing crisis that took Wall Street -- and the board -- by surprise and ultimately caused the company to take a $2.6 billion write-down. Last year, in a telling coda, Boeing paid $92.5 million to shareholders who accused the company of using accounting tricks to hide the damage prior to the crucial merger with McDonnell Douglas (BW -- May 20, 2002). Even worse, through most of his tenure, Condit badly misread the rising threat from Europe's Airbus. And some of the acquisitions he made to diversify away from commercial aircraft were plagued with integration problems. This year alone, Boeing has taken more than $1 billion in deal-related write-offs. Company officials point out that "in the midst of the worst downturn in the history of commercial aviation," Boeing is profitable in all its businesses. However, revenues have been declining since 2001 and will slip to an estimated $49 billion this year with estimated earnings of $790 million. The result: Boeing's stock has fallen 6.5% under Condit -- while the Standard & Poor's 500-stock index rose 61.8%. "That was a difficult record to run away from," says Richard Turgeon, research director of Victory Capital Management, which owns 2 million Boeing shares. "It was unacceptable."

 

CLOSE TO THE EDGE Equally damning was the heavy damage done to Boeing's reputation on Condit's watch. A company that had long been a paragon of American industrial excellence has ensnared itself in one scandal after another in recent years. "Under Condit, engineering skills and ethics seemed to lose sway over senior management," says Loren Thompson, a defense analyst at the Lexington Institute in Arlington, Va. "Condit booked a huge amount of defense business by allowing his subordinates to play business close to the edge." Boeing has said that there is no evidence linking Condit to the scandals.

 

The decision to steer the company more deeply into defense contracting represented a historic shift. The most crucial step in that process was the 1997 acquisition of McDonnell Douglas. Not only did that deal make defense contracting a much bigger part of Boeing's mix but the smaller McDonnell also had an outsize effect on the Boeing culture. Boeing, the jewel of its hometown of Seattle, had always prided itself on treating employees -- from designers to line workers -- as family. But the values most esteemed at McDonnell were the ability to schmooze with Washington power brokers and win the contract. Building planes sometimes seemed to take second place.

 

And with McDonnell came a new No. 2 exec, Harry C. Stonecipher. The decisive, brutally candid Stonecipher was the temperamental opposite of the aloof, nonconfrontational Condit. Many inside the company came to view him as an enforcer. The relentless bottom-line focus Stonecipher brought to bear during his stint as president antagonized many managers on the Boeing side of the house. Condit's 2001 decision to move the company headquarters to Chicago completed the cultural uprooting, leaving many of those left behind in Seattle feeling a bit like unloved stepchildren.

 

Condit had been steeped in the Boeing culture for more than 30 years. He caught the eye of Boeing's top brass almost as soon as he arrived at the company in 1965, fresh out of Princeton with a master's degree in aeronautics. Early in his career, he solved a vexing problem by calculating the force of the vortex created when jumbo jets take off. This allowed the Federal Aviation Administration to develop rules for safe spacing between jumbos and smaller aircraft, rules still in effect today. It was that problem-solving skill that attracted the attention of Thornton A. "T" Wilson, then Boeing's chairman and CEO, who took the engineer under his wing. "It was clear that young Condit was a standout engineer and person," recalls Granville Frazier, a retired Boeing senior exec and longtime friend who first met Condit in the mid-1960s.

 

Later, Condit's design leadership on the 757 and 777 programs positioned him to take over the top job. But although he won great praise for his engineering prowess, some say both programs were riddled with problems that resulted from poor management. On the 777, for example, Condit made some inspired design breakthroughs, most notably switching to software that allowed Boeing to go directly from a design on the computer screen to the factory floor, avoiding expensive mockups. But Condit wildly overshot his initial budget. The plane was budgeted for $6 billion in development costs but ultimately cost $12 billion, say close observers. "We were milking money from the 767 and the 737, and that money was going right into the 777," said one former high-ranking Boeing exec. "Even though it's a wonderful machine, on a stand-alone basis, the 777 is not a commercial success." Boeing declined to discuss development costs, saying they are proprietary.

 

Once he reached the top spot, Condit's shortcomings as a manager became more worrisome. Within a year of taking office, Condit overreached in trying to step up airliner production even as the company was shifting to a more automated manufacturing system -- the equivalent of replacing the engine on a race car as it wheels around the track at 200 mph. Boeing's massive Seattle assembly lines nearly broke down in 1997, a year after he assumed office. By the time order was restored, the company had lost most of its credibility on Wall Street -- a humiliation that seared the new CEO. In a meeting on Aug. 5 of that year -- with more than two dozen senior execs in the board room of Boeing's then- headquarters in Seattle -- Condit complained about the embarrassment he had suffered while trying to soothe angry investors on the East Coast, recall execs present at the meeting. He had been called a liar by shareholders fed up with broken promises, the production fiasco, and a slumping stock. With tears welling, Condit vowed he would never suffer such indignity again. In a talk this year to plant workers, Condit took responsibility for the stumble, saying: "I give myself a very poor grade. It happened, and so it's my responsibility. There's my F."

 

THE FALL GUY But Condit's problems were far from over. By the spring of 1998, with earnings struggling, global markets in a nosedive, and the stock under pressure, investors were calling for Condit's head and pressuring directors to do something. Condit saved his own position, but others were not so lucky. On a Saturday in early September, he called Ron Woodard, then president of the commercial airplane division, and asked him to come to the office. Condit told Woodard this hurts me more than it hurts you -- and fired him. Woodard became the fall guy for the manufacturing collapse. "He told me he had a real close brush with the board, and he was almost dumped two months before," Woodard told BusinessWeek.

 

But if there was any lingering sense of shame, it didn't deter Condit from his taste for lavish living. In the early '90s, he built a massive medieval-style mansion outside Seattle, replete with a custom miniature train that chugged from room to room, delivering drinks to guests. Condit hosted elaborate parties that often included poetry readings and evenings of Camelot themes, featuring characters from King Arthur.

 

That extravagance soon began filtering into a company culture that had been based on modesty, fiscal restraint, and the singleminded pursuit of building big airplanes. Former CEOs Bill Allen and T. Wilson both eschewed the trappings of corporate privilege. Wilson lived in the same middle-class house during his whole career at Boeing. When Condit succeeded Frank Shrontz as CEO in 1996, Boeing had three small corporate jets, and senior execs were required to fly commercial airlines to stay in touch with their customers. Now, Boeing has a fleet of corporate jets, including a 737 for Condit, done up in English-library style.

 

RAISED EYEBROWS Condit's personal life was similarly prone to excess, and it began to raise eyebrows within the company and among directors. After his second marriage, to a Boeing secretary, broke up in 1990, Condit embarked on a relationship with a Boeing receptionist, Laverne Hawthorne. They dated for about six months -- until Condit got promoted to president in 1992. About the same time, the company's customer relations department downsized, and Hawthorne was issued a pink slip. She told BusinessWeek that she immediately went to see him in his office and reminded him of promises he had made to her. As Hawthorne recalls it, she looked him in the eye and said: "One of us in this room has balls, and it certainly isn't you." Then she stormed out. Hawthorne declines to say whether she filed a wrongful-termination suit against Condit or received a settlement from the company, but several Boeing executives say both happened. "There was a lawsuit and a settlement," said one Boeing exec. Condit declined to comment.

 

As Condit's airplane factories were imploding in 1997, so was his third marriage. That's when he moved into the suite at the Four Seasons. Condit had married Jan Condit -- his first cousin -- in the early '90s. The two divorced in 1998, and their file is sealed in the King County Superior Court in Seattle. Jan Condit now lives in the mansion.

 

As Condit rose through the ranks, his private life became more of an issue within the company. Former Boeing Chairman Shrontz had long been concerned and had confronted Condit several times about his personal relationships, say people in the know. Shrontz declined to comment. Former Boeing director Charles M. Piggott, retired chairman of Paccar Inc., had expressed concern to several senior Boeing executives about Condit's behavior. Piggott did not return calls seeking comment. Said one Boeing lawyer to a senior Boeing executive: "We have another Bill Clinton on our hands."

 

SEALED COURT FILES Boeing has other woes relating to women. A class action alleging widespread pay discrimination against women is now pending in federal court in Seattle. The suit alleges that top company officials knowingly underpaid women and denied them promotion to "enrich the corporation" at their expense, says plaintiffs' lawyer Mike Helgren. Boeing says that allegations are without merit. The documents in this suit have been sealed by the court. BusinessWeek has asked to have them unsealed. That motion is pending.

 

Although Condit often trumpeted his visionary strategic skills, they failed him when it counted most. As late as 1996, in a meeting with Boeing's legendary European salesman, Rudy Hillinga, Condit assured him that Airbus would never launch the A380 program. According to Hillinga, Condit said: "I'll give you my personal guarantee, that this time around, Airbus will not succeed." Condit not only underestimated the Airbus threat but also waffled when he needed to respond decisively. Under Condit, Boeing first proposed the 747x, a supersized 747, and then later the Sonic Cruiser, a high-speed jetliner.

 

Despite the marketing hype and strong suggestions that Boeing would launch both jetliner programs, Condit did not pull the lever. While Airbus got bigger, Boeing stagnated. The failure to formulate a strategy that could keep up with an emboldened Airbus began to tell as Boeing fell behind in both technology and manufacturing efficiency during the '90s. Boeing, once the manufacturing marvel of the world, now spent 10% to 20% more than Airbus to build a plane. The loss in market share -- from nearly 70% in 1996 to roughly 50% today -- has marked an astonishing reversal. Boeing believes that smaller planes and direct flights will prevail against Airbus' A380 jumbo jet, and says it's focusing on profits, "not market share at any cost." But while Airbus is well under way with the A380, Boeing has still not committed to its latest proposal: the superefficient 7E7 jetliner. The company says it will make a decision on whether to go forward by the end of the year. Condit recently told employees: "I would not trade strategies for any amount of money."

 

Partly to deal with the cyclical nature of the airline business and the rise of Airbus, Condit took steps to diversify his company. Boeing started gobbling up big and small aerospace and information-service outfits. Condit gets high marks for the McDonnell Douglas acquisition. Although the clash in company cultures raised serious management challenges, it let Boeing expand in defense as its commercial business waned. Defense-related sales now account for more than half of the company's revenues, making Boeing the nation's No. 2 defense contractor.

 

But as Condit got the acquisition bug, some of his forays failed to bear fruit. In late 1999, Boeing bought Hughes Electronics Corp.'s (GMH ) Space & Communications Div. for $3.75 billion and later paid $1.5 billion for Tribune Co.'s Jeppesen-Sanderson Inc., the world's largest provider of flight maps and other services for pilots. Boeing hoped to capture more of the higher-margin services businesses and expand Hughes's fledgling satellite services business. Many investors at the time supported Boeing's belief that space, in particular, represented a huge growth opportunity and would add more balance to the volatile commercial airplane business.

 

SNOWBALLING SCANDAL But Condit later admitted that he was wrong. He told Everett (Wash.) employees this summer that the space market "did not turn out to be what we thought it was going to be, and we didn't perform." The $1.1 billion charge was the latest in a series of write-offs related to a collapsing space market as well as to serious quality and manufacturing problems dogging the former Hughes satellites. Boeing officials are still trying to turn it around. "I'll be the first to admit that the commercial space business was a dry hole," Jim Albaugh, CEO of Boeing's integrated defense systems unit, told BusinessWeek. "But we are in good company, and a lot of good people had the same aspirations and had the same problems."

 

But if strategic blunders and failures to execute can be overlooked by a board, scandal can't be. Not when you're a defense contractor. A snowballing ethics problem threatened to imperil the side of Boeing's business that was still growing and healthy: its lucrative government contracts. In the end, that's what did Condit in. The intense scrutiny of Boeing's misconduct is just heating up. On Dec. 2, the Pentagon postponed action on the $18 billion Air Force deal to acquire 100 Boeing 767 tankers, pending an investigation into the actions that led Boeing to sack Chief Financial Officer Michael Sears and manager Darleen A. Druyun for ethics violations. The Justice Dept., two investigative branches of the Defense Dept., and the Senate Armed Services Committee are investigating allegations that Boeing acted improperly, or even criminally, in an effort to win at least two multibillion-dollar aerospace defense contracts. A second scandal, dating from 1998, involved the possession of 35,000 pages of Lockheed Martin Corp. (LMT ) documents during the 1998 competition for a military rocket-launch contract. The Pentagon has indefinitely suspended Boeing from bidding on future rocket contracts pending a review of its ethics. Lockheed Martin is also suing Boeing over the alleged document theft.

 

Condit was not personally implicated in either of this year's Air Force scandals. But the recent fusillade of embarrassments was too much even for Boeing's famously forgiving board of directors, which had been paying out rope to Condit for years. After Condit resigned, the board awarded the CEO title to one of their own, Stonecipher, 67, who had served for five years as Condit's No. 2 after Boeing acquired McDonnell Douglas. At the same time, the board named director Lewis E. Platt, the former chairman of Hewlett-Packard Co. (HPQ ), to the new post of nonexecutive chairman.

 

Stonecipher's mettle will immediately be tested by a momentous decision. By Dec. 15, the board is expected to decide whether to commit to the development of the 7E7 jetliner, which would be Boeing's first new airplane in a decade. The decision will say much about Boeing's commitment to the commercial airplane market. "This is really a pivotal moment," says Richard L. Aboulafia, an aerospace analyst at Teal Group Corp. consultants. "Failure to invest in the 7E7 could mean the beginning of the end for Boeing's storied airplane business."

 

To many, the ascent of Stonecipher represents the de facto takeover of Boeing by McDonnell Douglas. Condit's most enduring contribution to Boeing's history may be ensuring the transformation of Boeing into a defense contractor with a commercial aviation subsidiary -- an ironic legacy for a brilliant aviation engineer.

 

By Stanley Holmes

Edited November 15, 2007 by eltib

[CheshireTom 1,377]

BigD,

 

Is that the best you can do. The story is over a month old and has moved on somewhat.

 

How about Boeing (we deliver on time and to spec) and its 18 bn USD waste of US taxpayers money ...

 

 

Boeing accused over contractor role in failed US spy satellite programme

 

Tom Bawden in New York

 

The man who spearheaded a failed American spy satellite programme that lost an estimated $4 billion has described it as “technically flawed and unexecutable the day it was signed”.

 

In an interview that will damage further the credibility of America’s surveillance capabilities, Robert J. Herman told The New York Times that the project had been doomed to failure because the US Government was unwilling to invest the necessary capital. At the same time, he alleged, Boeing, the contractor, made promises that it could not keep relating to the price and feasibility of the project, known as Future Imagery Architecture (FIA).

 

From 1979 to 1981, Mr Herman ran the National Reconnaissance Office (NRO), the government agency that oversaw the plan to create a new generation of spy satellites to keep better tabs on terrorist training camps, nuclear weapons plants and enemy military manoeuvres.

 

Mr Herman, who in 1996 led the panel that first recommended the establishment of a new satellite system, told The New York Times: “The FIA contract was technically flawed and unexecutable the day it was signed. Some top official should have thrown his badge on the table and screamed: ‘We can’t do this system at this price.’ No one did.”

 

Thomas Young, a former aerospace executive who led a panel that later examined the project, agreed with Mr Herman, saying that “the train wreck was predetermined on Day 1”. The projected cost of the programme, given a budget of $5 billion, was increased to between $7 billion and $8 billion in 2002 as the difficulties of execution became increasingly apparent.

 

By the time that it was finally killed off in September 2005, nowhere near completion and already a year after the first satellite was to have been delivered, the estimated cost had jumped to $18 billion.

Edited November 15, 2007 by CheshireTom

[BigDUSA 71]

In an interview that will damage further the credibility of America’s surveillance capabilities, Robert J. Herman told The New York Times that the project had been doomed to failure because the US Government was unwilling to invest the necessary capital. At the same time, he alleged, Boeing, the contractor, made promises that it could not keep relating to the price and feasibility of the project, known as Future Imagery Architecture (FIA).

 

From 1979 to 1981, Mr Herman ran the National Reconnaissance Office (NRO), the government agency that oversaw the plan to create a new generation of spy satellites to keep better tabs on terrorist training camps, nuclear weapons plants and enemy military manoeuvres.

 

Go back and re-read the first paragraph maybe you missed the part where the US Government was unwilling to invest the necessary capital to complete the mission.

 

EADS executives still are under investigation for insider trading. Sad day for Euro ethics.

[CheshireTom 1,377]

Go back and re-read the first paragraph maybe you missed the part where the US Government was unwilling to invest the necessary capital to complete the mission.

 

Was willing to invest more than the 18 bn USD that Boeing had already taken.

 

How's the relocation going this week?

[sabang 0]

Considering that it is widely believed that the B777 has yet to reach break even, Boeing had better hope it makes a success of the B787. I hope so too, for the sake of competition in the civil aviation market.

 

Interesting article on Phil Condit, Eltib.

[eltib 54]

Interesting article on Phil Condit, Eltib.

 

Thanx

 

I find it interesting the Boeing execs wanted us to be ethical, YET they seem to have a bigger problem living up to their words.

[wacmedia 277]

Thanx

 

I find it interesting the Boeing execs wanted us to be ethical, YET they seem to have a bigger problem living up to their words.

 

Hi,

 

Condit seems an interesting guy but not the type you want running the company. If the article is right Boeing are going for dodgy Defence contracts in the future and are leaving the commercial aircraft business to Airbus.

[CheshireTom 1,377]

Hi,

 

Condit seems an interesting guy but not the type you want running the company. If the article is right Boeing are going for dodgy Defence contracts in the future and are leaving the commercial aircraft business to Airbus.

 

You have to chuckle when they are making such a big noise about EADS tanker bid and what it means to American jobs when, at the same time, they are farming out their commercial aircraft production to any country that will subsidise accept the development costs.