Boeing Loses $1B in Rocket Contracts

Something just doesn't seem to be right with Boeing any more. Phil Condit was a great program manager (the 777 was originally his baby), but he just doesn't seem to be too hot as a CEO. Politically he is tone deaf (Chicago over Dallas or Long Beach for the HQ?). And now Boeing, that great symbol of American industry, is losing $1 Billion in rocket contracts to Lockheed Martin as a penalty for the illegal theft of documents.

The Air Force is really taking some pretty harsh shots at Boeing. Lockheed is certainly a capable alternative in the industry and it really won't do too much damage to the viability of the US launch capacity to change the contracts. But this is the stiffest penalty that anyone can find on record and the Undersecretary was indicating that they had been lenient on Boeing.

And all this because of the actions of two former McDonnell Douglas employees (Boeing acquired McDD and eventually fired the two for a lack of ethics). But of course, Boeing didn't make things any better by being less than completely truthful with the Air Force. And therein lies the difference between former Boeing CEO Bill Allen and Phil Condit.

Allen didn't tolerate such actions, and if they did occur he would take decisive and ethical action, up front. Here, Allen would have sanctioned Boeing before the AF ever got a chance. Heads would have rolled and a complete and thorough reporting would have been made to AF immediately.

Instead, we get Condit apologizing for his company's actions and claiming to be "disappointed by the circumstances." He then hired former Senator Rudman to help review the company's ethics.

The review needs to start at the top. Maybe I'm wrong, but Condit doesn't seem, to me at least, to really be too contrite about the whole thing. Boeing has been aware of this since 1999 and has understated the significance of the situation and the quantities of documentation they had in their possession. After four years and being caught in their understatement, saying sorry isn't really the right answer.

Boeing knows where the problem lies. After four years they should know if it lies with one person condoning this in his department or if it is a product of the corporate culture. Sorry doesn't correct the problem. Sorry isn't enough. Changes need to be made. They've had four years in which to determine what to do. There aren't too many acceptable reasons for not having acted by now.

Boeing is a special company in American industry. They are like a GE, a Coca-Cola, or an IBM. We hold them to a higher standard and we expect them to exceed that standard. And we should. As one of our biggest exporters, they are an example to the rest of the world of what America is all about. It may not be fair to Boeing to expect more of them than we do from most other companies, but that's life. They hold a powerful position in US industry and therefore also have powerful responsibilities.

And one of those responsibilities is to conduct themselves in the most ethical manner possible.