With its chief executive's office vacant for the second time in less than two years, Boeing Co faces a tough choice: whether to promote an executive familiar with the company's complex inner workings, or turn to an outsider who is perceived as completely clear of its ethics scandals.
It's a difficult decision that analysts say could end up pitting experience against image.
"When you have a situation that's just one scandal after another after another after another, [then] sometimes you have to go outside to bring in someone who is recognized to be a squeaky Mr Clean, to have a complete break with the corporate culture," aero-space analyst Scott Hamilton said.
But analyst Paul Nisbet with JSA Research said that a push to find someone who cannot possibly be tied to Boeing's ethical lapses could also force the company to pass over internal candidates who are ultimately better for the job.
"The one possible impact is that in their quest to find a squeaky-clean guy, they may have to take someone who's not as well-qualified," Nisbet said.
On Monday, Boeing said Harry Stonecipher -- brought back from retirement to help clear Boeing's tainted name -- was forced out after revelations that the married executive violated the company's code of conduct and had an affair with an unnamed female Boeing executive. Stonecipher had replaced Phil Condit, who resigned in December 2003 amid defense contracting scandals that ultimately sent two executives to jail.
Hurdles ahead
The difficulties in finding a new leader are compounded because Chicago-based Boeing faces several big business hurdles in the coming months.
Boeing has said it will decide by mid-year whether to halt production of its 767 airplane. The fate of the production line is in limbo while the Pentagon reconsiders an air refueling tanker contract marred by the scandal that forced Condit out.
The company also may decide soon whether to sell a new version of its jumbo 747, and is also working feverishly to win orders for its new 787, due to enter service in 2008.
"The timing of this couldn't have been worse,'' said J.B. Groh, an analyst with DA Davidson in Portland, Oregon.
Boeing has said it will consider candidates both inside and outside the company, and the company reassured investors that it intends to move quickly.
Top candidates
Many analysts believe the top inside candidates include Alan Mulally, who runs Boeing's Seattle-based commercial airplane division, and Jim Albaugh, who heads the company's defense operation.
Groh said Mulally may have an edge over Albaugh because he has managed to make the commercial airplanes operation much more efficient, while also dealing with a long and fierce downturn in the airplane market. The international airplane market is beginning to improve, but Mulally -- and Boeing -- face tough competition from rival Airbus SAS.
Albaugh, in turn, may see his chances hurt by lingering concerns about ethics lapses in the defense side of the business. Besides the tanker scandal, Boeing was barred for 20 months from bidding on satellite launch contracts after accusations that it stole information from competitor Lockheed Martin in 1998. The US Air Force lifted that ban on Friday.
Boeing declined to comment on whether Albaugh or Mulally were in the running.
Analysts noted it will be especially difficult to find an outside candidate with the multinational manufacturing and operational experience needed to run an operation as complex as Boeing.
"It's a pretty limited pool of people," Groh said.
One possible candidate is board member Jim McNerney, who heads St Paul, Minnesota-based 3M Co but has experience in aerospace because he served as head of GE Aircraft Engines.
3M spokeswoman Jacqueline Berry said that was "speculation."
"Mr McNerney says he's very happy at 3M and has no plans to leave in the foreseeable future," she said.
The Ministry of Transportation and Communications yesterday inaugurated the Danjiang Bridge across the Tamsui River in New Taipei City, saying that the structure would be an architectural icon and traffic artery for Taiwan. Feted as a major engineering achievement, the Danjiang Bridge is 920m long, 211m tall at the top of its pylon, and is the longest single-pylon asymmetric cable-stayed bridge in the world, the government’s Web site for the structure said. It was designed by late Iraqi-British architect Zaha Hadid. The structure, with a maximum deck of 70m, accommodates road and light rail traffic, and affords a 200m navigation channel for boats,
PRECISION STRIKES: The most significant reason to deploy HIMARS to outlying islands is to establish a ‘dead zone’ that the PLA would not dare enter, a source said A High Mobility Artillery Rocket System (HIMARS) would be deployed to Penghu County and Dongyin Island (東引) in Lienchiang County (Matsu) to force the Chinese military to retreat at least 100km from the coastline, a military source said yesterday. Taiwan has been procuring HIMARS and Army Tactical Missile Systems (ATACMS) from the US in batches. Once all batches have been delivered, Taiwan would possess 111 HIMARS units and 504 ATACMS, which have a range of 300km. Considering that “offense is the best defense,” the military plans to forward-deploy the systems to outlying islands such as Penghu and Dongyin so that
WHAT WAS ALL THAT FOR? Jaw Shaw-kong said that Cheng Li-wen had pushed for more drastic cuts and attacked him, just for the outcome to be nearly identical to his bill The legislature yesterday passed a supplementary budget bill to fund the purchase of separate packages of US military equipment, with the combined amount of spending capped at NT$780 billion (US$24.8 billion). The Chinese Nationalist Party (KMT) and Taiwan People’s Party (TPP) used their legislative majority to pass the bill, which runs until 2033 and has two main funding provisions. One was for NT$300 billion of arms sales already approved by the US for Taiwan on Dec. 17 last year, the other was for NT$480 billion for another arms package expected to be announced by Washington. The bill, which fell short of the NT$1.25
‘CLEAR MESSAGE’: The bill would set up an interagency ‘tiger team’ to review sanctions tools and other economic options to help deter any Chinese aggression toward Taiwan US Representative Young Kim has introduced a bill to deter Chinese aggression against Taiwan, calling for an interagency “tiger team” to preplan coordinated sanctions and economic measures in response to possible Chinese military or political action against Taiwan. “[Chinese President] Xi Jinping [習近平] has directed the People’s Liberation Army to be ready to invade Taiwan by 2027. China has a plan. America should have one too,” Kim said in a news release on Thursday last week. She introduced the “Deter PRC [People’s Republic of China] aggression against Taiwan act” to “ensure the US has a coordinated sanctions strategy ready should
RSS