Boeing Board Ousts Stonecipher As CEO
Updated 8:57 AM ETMarch 7, 2005
By DAVE CARPENTER
CHICAGO (AP) - Boeing Co. on Monday said its board forced out president and chief executive officer Harry Stonecipher because of a relationship the married, 68-year-old Stonecipher had with a female executive at the company.
The unexpected ouster makes Stonecipher, who spent just 15 months in the top job, the second consecutive CEO to depart the Chicago-based airplane maker and defense contractor in disgrace.
His predecessor, Phil Condit, resigned Dec. 1, 2003, as a result of the defense contracting scandals that ultimately sent two Boeing executives _ ex-Air Force procurement official Darleen Druyun and chief financial officer Mike Sears _ to jail.
Chief financial officer James A. Bell, 56, was named president and CEO on an interim basis.
Boeing shares fell 58 cents to $57.80 in premarket trading.
Boeing said an internal investigation prompted by information sent anonymously to chairman Lew Platt and the company's legal and ethics leaders 10 days ago revealed a "consensual" relationship between Stonecipher and the female executive that the board determined was in violation of the company's code of conduct.
"The board concluded that the facts reflected poorly on Harry's judgment and would impair his ability to lead the company," said Platt, who is to assume an expanded role at the company.
He said the requested resignation "was in no way related to the company's operational performance or financial condition, both of which remain strong."
Spokesman John Dern said the female executive, who was not identified, did not report to Stonecipher and remains with the company. He declined to provide further details.
"This raises a lot more questions than it answers," said analyst Richard Aboulafia of the Fairfax, Va.-based Teal Group.
Stonecipher also was dismissed from Boeing's board, which he had been a member of since joining the company from McDonnell Douglas when the two companies merged in 1997.
The tough-talking son of a Tennessee coal miner, Stonecipher had been credited with helping Boeing to clean up its ethical behavior and with improving its sullied reputation in Washington. The company's stock surged 52 percent during his tenure.
He also is one of its largest stockholders as a result of the McDonnell Douglas deal.
Stonecipher failed, however, to win back the tainted $23 billion air-refueling tanker contract that the Pentagon pulled from Boeing because of conflict-of-interest violations involving Druyun and Sears.
He turns 70 in May 2006 and had been expected to retire early next year.
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