More Turbulence Ahead For Boeing

Harry Stonecipher (right) is stepping up as Phil Condit's in the top spot at Boeing. He says his first job will be to restore the Defense Department's faith in his company. That may not be easy.

Boeing is being shadowed these days by at least three scandals involving its defense business. One centers on the recent procurement of a $16 billion contract to sell the Air Force modified 767s as air tankers. Boeing's CFO and a former Air Force official who went to work for the company have been fired as the investigation continues.

A second scandal involved Boeing's possible industrial sabotage against Raytheon in the competition for a missile shield contract in 2002.

The third scandal is the oldest. In 1997, Boeing won out over Lockheed Martin in the race to build the military's Evolved Expendable Launch Vehicle (EELV). A later investigation showed that Boeing had thousands upon thousands of confidential Lockheed documents with which the Chicago based company could outcompete its rival.

Speaking with anchor Neil Cavuto on Wednesday, Stonecipher admitted to Fox News the EELV incident still hurts Boeing.

"But we have lost a lot bigger contracts. And we’ll get on to the next one. We wanted to do the right thing with this thing," he said. "As Phil said, we fired the people back when it happened. And unfortunately, we say the company did something wrong, it is that the company’s policies and procedures are really pretty darned good. It is having people who violate them that gets us in trouble, and dealing with that is what you have to do. Because it really besmirches the reputation of the company and doesn’t make the employees feel too good about it, either."

In spite of reassurances from both Condit and Stonecipher, the stain on Boeing's reputation with the Pentagon continues to grow. Last week, chief financial officer Michael Sears was fired for behaving unethically. The Pentagon's inspector general is investigating former USAF Deputy Assistant Secretary Darleen Druyun. The probe centers on whether she gave Boeing inside information on Airbus's bid on the "supertanker" project. The Air Force, desperate to replace its decrepit KC-135 fleet, finally awarded the $16 billion contract to Boeing. Investigators want to know if Druyun traded the information for an executive gig at Boeing.

In style, the suspicions are very similar to the Lockheed-Martin scandal that began in 1997. Back then, a Lockheed executive jumped ship and turned up at Boeing -- right around the time all those documents showed up. The employee and his supervisor were drummed out of the building.

FMI: www.boeing.com