Boeing's Corporate Governance Crisis
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Case Code: CGOX003 Case Length: 09 Pages Period: 2004 Pub Date: 2004 Teaching Note: Not Available |
Price: Rs.300 Organization: Boeing Industry: Aerospace Countries: Global Themes: - |
Abstract Case Intro 1 Excerpts
Introduction
Towards the end of 2003, Boeing, the famous aerospace company found itself in the midst of a highly publicized scandal. On Dec. 2, the Pentagon postponed action on the $18 billion Air Force deal to acquire 100 Boeing 767 tankers. The Justice Dept., two investigative branches of the Defense Dept., and the Senate Armed Services Committee were investigating allegations that Boeing had acted improperly, in an effort to win two multibillion-dollar aerospace defense contracts. A second scandal, dating from 1998, involved the possession of 35,000 pages of competitor, Lockheed Martin's documents during the 1998 bidding for a military rocket-launch contract. The Pentagon indefinitely suspended Boeing from bidding on future rocket contracts pending a review of its ethical practices. Lockheed Martin sued Boeing over the alleged document theft. For some time it looked as though CEO Philip Condit had been able to pinpoint the blame on some senior executives, who resigned. But later, Condit himself submitted his resignation. After Condit resigned, the board appointed Harry Stonecipher, 67, as the new CEO. Stonecipher had served for five years as Condit's No. 2 after Boeing acquired McDonnell Douglas. At the same time, the board named director Lewis.E.Platt, the former chairman of Hewlett-Packard Co., as non-executive chairman.
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