So what’s it all mean, the resignation of Phil Condit and the return of Harry Stonecipher to the executive suite at the Boeing Co.’s Chicago headquarters?
Good question. It will be a while before anyone has the answers.
Having Stonecipher at the helm, not Condit, won’t make much difference when it comes to decisions about the 7E7 program. The proposed new jet is a Boeing Commercial Airplanes project, which means all the planning is being done here in Everett and at Longacres — not in Chicago.
So, to me anyway, it’s pointless to speculate whether Everett’s chances of being picked for the final 7E7 assembly plant have changed. Stonecipher doesn’t have any fond memories of building jets on Puget Sound, but he wasn’t around for the red-tape-cluttered 777 plant expansion, either. It’s a wash.
The change at the top also probably won’t make much difference when it comes to the 767 tanker deal, even though the scandals surrounding those negotiations are what led to Condit’s departure.
The Air Force still needs to replace its creaking KC-135s with modern tankers, and Boeing’s KC-767 is the only real option. Airbus is working on an A330 design, but it has never built a tanker — and it will be a cold day in Texas before President Bush signs off on buying anything built by the French.
So the tanker deal will be authorized — after an appropriate delay for government auditors to pore over the books for uncrossed t’s and undotted i’s, which will allow self-proclaimed reformers in Congress a final chance for high-decibel posturing. At least, that’s what the smart guys are telling me.
So why make the change at all? Replacing Condit with Stonecipher is a long-term play with implications for the future.
The deal for the first 100 tankers has been done, but the Air Force is going to need at least 400 of those flying gas-passers before it’s through. Stonecipher’s job is to smooth over the rough patches still left on this deal, and to make good and sure that Boeing is in a position to win contracts for each and every one of the 300 tankers to come.
In the process, he also must get Boeing back in the billion-dollar military satellite launch business, and make sure that the Army has no reason to take away its billions of dollars in future combat systems contracts. For this task, he may be uniquely qualified.
Stonecipher’s first job as a chief executive officer was from 1988 to 1994, when he took over Sundstrand Corp., an Illinois aerospace company that had been caught overcharging on federal defense contracts.
Stonecipher rebuilt those battered relationships and kept Sundstrand in the business. He built further on his government contracting credentials in his years at McDonnell Douglas, where he presided over the birth of the Air Force’s C-17 cargo jet — as well as the demise of the company’s commercial jet business.
Therefore, it makes at least some sense to bring back Stonecipher to once again, in his words, put his face "right up where they can look you in the eye," and repair the Pentagon’s confidence in its No. 2 supplier.
"I know that business quite well," he said during Monday’s news conference. "That’s where I’ll spend a lot of my time."
The question is, how long does Boeing want to keep him around?
Stonecipher, said analyst Richard Aboulafia, does not have a good track record when it comes to investing in new airplane programs, as evidenced by McDonnell Douglas’ departure from the commercial jet business.
But that’s just what Boeing needs right now. The 7E7 should be a starting point for a renewal of Boeing’s commercial jet fleet. Boeing already has dropped hints of plans for a next-generation jumbo jet that would incorporate Dreamliner technology. Bringing that to market will require a willingness to spend the kind of money Stonecipher was unwilling to spend at McDonnell Douglas.
Stonecipher also may not be the right man to have sitting in the CEO’s seat come 2005, when the next round of contract talks comes up for commercial airplane workers.
Puget Sound union leaders were polite on Monday, and said they were willing to work with the new boss. But as far as the rank-and-file are concerned, Stonecipher might as well be the Grinch who sold Renton. He was more reviled than Alex Rodriguez before he retired.
But this man at the end of his career holds many of the keys to Boeing’s future.
I figure the 67-year-old Stonecipher has got about 18 months in the big chair before he goes back to his Florida retirement. Eighteen months in which all he has to do is straighten out the mess in Boeing’s space and defense business and stay supportive of the new commercial jet program. Eighteen months that could position Boeing for success and profitability for the next 18 years.
If Stonecipher succeeds, Boeing could end up building 767 tankers in Everett for a decade or more. And if that happens, maybe he’ll be remembered by Boeing workers for something other than the "Outsource Harry" picket signs during the 40-day SPEEA strike, or being the man who bought Boeing with Boeing’s money.
Reporter Bryan Corliss: 425-339-3454 or corliss@heraldnet.com.
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