Boeing Co. Chairman and Chief Executive Philip M. Condit unexpectedly resigned Monday, as the world's largest aerospace company moved quickly to restore an image sullied by scandal.
Although Boeing asserted that Condit hadn't been forced out, its board of directors made clear that it was comfortable with his decision, saying that a "new structure for the leadership ... was needed to restore the company's reputation."
Boeing's former president, Harry C. Stonecipher, 67, was brought out of retirement and named chief executive. Stonecipher headed McDonnell Douglas Corp. before it was acquired by Boeing.
Many of Chicago-based Boeing's military programs are located in Southern California, with major facilities scattered from Palmdale to Irvine. The company is the largest private employer in the Southland, with about 36,000 workers.
Condit's resignation came as the Pentagon stepped up an investigation into allegations that Boeing's then-chief financial officer, Michael Sears, began recruiting a top Defense Department procurement official to join the company at the same time it was bidding on an $18-billion contract for aerial refueling tankers. Boeing eventually hired the Pentagon official, Darleen Druyun.
Last week, Boeing fired Sears and Druyun, citing breach of company policy. Sears has denied the allegations.
Late Monday, the Pentagon announced that it might delay the deal to lease and buy 100 Boeing air tankers until defense officials thoroughly investigated the circumstances surrounding the awarding of the contract. Boeing has denied wrongdoing in the hard-fought competition for the tanker pact.
Beyond the controversy over the air tankers, Boeing has seen its reputation tarnished by a Pentagon inquiry that found two Boeing employees had illicitly obtained proprietary documents from its rival, Lockheed Martin Corp., to win a lucrative rocket-launching contract.
As punishment, the Air Force in July took away about $1 billion of rocket work from Boeing and indefinitely suspended the company from seeking rocket contracts.
Condit "created a culture where this type of activity was routine," said Steve Ellis, vice president of programs for Taxpayers for Common Sense, a watchdog group that has been critical of Boeing's tanker deal. While Condit might have not been directly responsible, Ellis said, the executive "oversaw a career's worth of scandals in just one year."
