Boeing
Boeing Gets a Second Chance, And a Third
Boeing is the world's largest aerospace firm, providing goods and services for military and industry buyers around the world. The company makes jets, helicopters, missiles, satellites, and more, and is the United States' largest exporter. With 153,000 employees and net earnings exceeding $1.5 billion in 2005, Boeing is one of the largest corporations in the world. Surely such a well-known and visible firm would not be able to get away with unethical actions. Yet an examination of the last five years reveals a company deeply troubled by immoral and illegal behavior, fostered by a culture that overlooks wrongdoing. The problems stem from much earlier, but the extent of Boeing's troubles began to surface in 2002. At that time, Boeing was led by CEO Philip Condit, an engineer with a Ph.D. and 37 years of experience at Boeing. Following its 1997 acquisition of competitor McDonnell Douglas, Boeing experienced problems integrating the two firms' operations and cultures. A $2.6 billion loss related to the merger triggered a lawsuit from angry shareholders, who alleged that the firm covered up its true financial condition. In February 2002, Boeing settled the suit for $92 million but admitted no misconduct. In 2003, Boeing managers were found to be in possession of documents that were stolen from rival Lockheed Martin. The documents may have given Boeing an advantage in bidding for defense contracts. The Pentagon revoked the resulting order, costing the firm
$1 billion in sales, and barred them from bidding on federal contracts for 20 months. Boeing CFO Michael Sears was fired later that same year for illegally hiring an air force officer, Darleen Druyun, who had responsibility for Boeing's Pentagon contracts. Druyun purchased $20 billion of aircraft from Boeing just before she left the Pentagon. Sears and Druyun were later jailed for their roles and the contract was cancelled. Facing a growing crisis, the board of
Boeing is the world's largest aerospace firm, providing goods and services for military and industry buyers around the world. The company makes jets, helicopters, missiles, satellites, and more, and is the United States' largest exporter. With 153,000 employees and net earnings exceeding $1.5 billion in 2005, Boeing is one of the largest corporations in the world. Surely such a well-known and visible firm would not be able to get away with unethical actions. Yet an examination of the last five years reveals a company deeply troubled by immoral and illegal behavior, fostered by a culture that overlooks wrongdoing. The problems stem from much earlier, but the extent of Boeing's troubles began to surface in 2002. At that time, Boeing was led by CEO Philip Condit, an engineer with a Ph.D. and 37 years of experience at Boeing. Following its 1997 acquisition of competitor McDonnell Douglas, Boeing experienced problems integrating the two firms' operations and cultures. A $2.6 billion loss related to the merger triggered a lawsuit from angry shareholders, who alleged that the firm covered up its true financial condition. In February 2002, Boeing settled the suit for $92 million but admitted no misconduct. In 2003, Boeing managers were found to be in possession of documents that were stolen from rival Lockheed Martin. The documents may have given Boeing an advantage in bidding for defense contracts. The Pentagon revoked the resulting order, costing the firm
$1 billion in sales, and barred them from bidding on federal contracts for 20 months. Boeing CFO Michael Sears was fired later that same year for illegally hiring an air force officer, Darleen Druyun, who had responsibility for Boeing's Pentagon contracts. Druyun purchased $20 billion of aircraft from Boeing just before she left the Pentagon. Sears and Druyun were later jailed for their roles and the contract was cancelled. Facing a growing crisis, the board of