Boeing chief unshaken by turbulence
| • | A brief look at Boeing Co's chairman and CEO |
By Dave Carpenter
Associated Press
CHICAGO — The televised plume of smoke from an airplane crash in New York this month was a familiar but sickening sight for Phil Condit, who was watching during a treadmill workout at a Detroit hotel.
Associated Press
"It stopped my day cold," recalls the Boeing Co. chairman and chief executive officer, so attuned to disaster he can pick out the words "plane crash" on a radio broadcast across a noisy room.
Despite turmoil within the commercial jet business since Sept. 11, and the recent loss of the biggest defense contract in history, Boeing's Phil Condit isn't panicking. He says his company is in strong shape to ride out the storm.
Running the world's largest aircraft manufacturer can be a tense and troubling job these days.
The solace for Condit is that the turbulence rocking the commercial jet business since September would have been far more damaging to his company had he not moved to create a more balanced Boeing — one that is steadily reducing its historic dependence on planes.
"Had we stayed in that mode, Sept. 11 would have been a really dramatic event for us," Condit said in an interview in his corner office atop Boeing's new world headquarters, overlooking the Chicago skyline and Lake Michigan beyond.
This was to have been a showcase year for the 60-year-old technocrat and his grand plan for a new, more diversified Boeing, capped by the symbolic shift away from its airplane roots in Seattle. Instead, it turned nightmarish just a week after the Chicago corporate offices opened.
Four Boeing planes went down in the terrorist attacks, air travel declined precipitously, the company's stock sank and has lost half its value since May, and Condit was forced to lay off as many as 30,000 people. The plane that crashed in New York this month was an Airbus, not a Boeing, but the disaster stung the entire aircraft industry.
On top of that, Boeing lost out to Lockheed Martin last month for the biggest defense contract ever, the Joint Strike Fighter, wiping out years of development and $1 billion in projected revenue from 2002 alone.
Now the longtime Boeing engineer faces more tinkering with his reinvented company. And the turmoil is certain to slow its push into some of the "new frontiers" he wants to pioneer — including technology-intensive enterprises such as its in-flight Internet venture, Connexion by Boeing.
Yet Condit believes the upheaval has confirmed the wisdom of his bold company makeover. He is convinced Boeing has made a much more fruitful transition to well-balanced aerospace giant than Wall Street gives it credit for.
"It's actually been very gratifying to see that the strategies we set were robust," he said.
Many industry experts agree, calling Boeing particularly well-positioned to take advantage of an increase in U.S. military spending. The company now derives nearly 40 percent of sales from its defense and space businesses, with airplanes' share down to about 60 percent.
An engineering whiz with early leadership skills, Condit seems to have been programmed for one of the nation's premier aerospace management jobs.
Bloomberg News Service
Brilliant and ambitious from a young age — he was an Eagle Scout in California and got his pilot's license at 18 — he picked up a patent for inventing a new kind of wing in his very first year at Boeing, 1965. Soon he became the lead engineer for the 747's performance, and later oversaw development of the 777.
James Guyette, former chief operating officer at United Airlines, says Boeing’s Phil Condit showed courage when he picked up and moved company headquarters from Seattle, above, to Chicago.
Rising steadily to become chief executive in 1996 and chairman in '97, he made the corporate change-in-course an early hallmark of his tenure, acquiring McDonnell Douglas to turn Boeing into the nation's second-largest defense contractor.
This year he asserted his role as corporate titan when he announced he would select a new headquarters city for the $51 billion company, setting off frantic lobbying in Chicago, Dallas and Denver.
After picking Chicago in May, Condit indulged in pomp and pizazz, descending from his corporate jet to a red carpet greeting from the governor and mayor.
But that wasn't really his style. Business colleagues and friends describe him as collegial, approachable, professorial, sometimes cautious, private, even shy.
And casual. Former Boeing vice president Lawrence Clarkson, now an aviation consultant, recalls him changing clothes at work up to four times a day — greeting European and Asian customers in coat and tie and switching back to sweater and stockinged feet when they left.
Those down-to-earth traits have served him well in labor relations, where union officials call him much more open and responsive than most CEOs. He has remained popular with the rank-and-file even through tens of thousands of layoffs and sometimes tough labor tactics — partly by delegating firing duties to his second-in-command, Harry Stonecipher, Boeing-watchers say.
The affable Condit also has built up enough trust to close deals on his own. James Guyette, former longtime chief operating officer of United Airlines, recalls working out a handwritten agreement with Condit in the middle of the night during negotiations for 777s — without lawyers.
"If you have a deal with him, you have a deal," says Guyette, now president and CEO of Rolls-Royce of North America, which supplies engines for Boeing planes.
Associates suggest Condit's role model for transforming Boeing is his friend Jack Welch, who turned General Electric into a powerhouse conglomerate that can thrive even in tough times. Asked if that's true, Condit smiles and acknowledges: "Jack has been an influence. GE has been an influence."
Boeing's boss has had his share of rough spots.
The company had its first unprofitable year in a half-century in 1997 after airplane production was accelerated to record levels and foul-ups ensued. Critics have accused him of moving too fast away from planes and ceding too much ground to rival Airbus. Boeing engineers went on a crippling strike last year.
"He had a difficult shift up to become chairman and CEO. The job is more visionary" than his earlier posts, says Guyette, who has known Condit more than 15 years.
"But he has matured in the job. He's had some great successes: the acquisition of McDonnell Douglas, setting up three distinct businesses and allowing them to operate as such, and having the courage to pick up and leave Seattle."
With this fall's dramatic events, Condit has plenty more work to do, including a re-evaluation of the changing airplane picture and an intensified focus on two areas the company already was involved in: air travel security and air traffic management.
One thing's certain: It likely will be years before his mission to transform Boeing is complete.
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