Daunting Difficulties

Photo: Anthony P. Bolante

Darleen Druyan

Ethical lapses

Boeing's standing in the military/aerospace market, which has propped the company up as its commercial jet business faltered, is in jeopardy: the company was twice caught last year with proprietary documents detailing a rival company's products or pricing strategy related to a competitive bid for a military contract. Even as those scandals were reverberating, it was revealed last November that Boeing influenced another bid by offering a job to the military procurement officer [photo: Darleen Druyan] who would decide the winner of a lucrative U.S. Air Force tanker deal. The tanker deal, though not dead, has been pushed back until after the upcoming presidential election. The upshot is that more Boeing workers will be laid off, because there will not be enough orders for 767s to keep the production line going.

Fancy new jets

With the midrange, midsize 7E7, Boeing antes up in order to stay in the civil aviation game. But will the plane be able to recapture customers lost to Airbus? The 7E7 is Boeing's way of saying it still has the capacity and the will to maintain dominance. But some still fear that Boeing will drift off-message in search of Pentagon and NASA contracts. Will Airbus's new 555-passenger A380 superjumbo jet, poised to end the 747's reign as the biggest passenger jet in service, help show Boeing the door?

Labor pains

Enmity between Boeing and its workforce continues to mount as the manufacturer goes from self-contained parts and assembly conglomerate to large-scale systems integrator. Some senior managers are seen as anti-union. A bid to decertify the union at a Wichita, Kan., facility did not help. Divestiture of manufacturing facilities is considered a mistake by some engineers who say quality is being sacrificed.

Leadership woes

Photo: Reuters

Harry Stonecipher

After scandals led to the ouster of CEO Philip M. Condit and CFO Michael Sears, Boeing's executive succession plan remains up in the air. The board of directors brought former chairman and fiscal conservative Harry Stonecipher [photo] out of retirement, naming him the new chief executive. Although he is widely seen as a proven manager in a crisis, his track record suggests consideration of short-term profit could trump long-term investment in new planes.