When Boeing chairman and chief executive Phil Condit resigned at the end of last year following allegations of unethical conduct by two senior executives, colleagues must have prayed that his act of principle would draw a line under a bad year for the firm.

Their prayers were not answered.

New year figures for 2003 saw civil aircraft arch-rival Airbus beat Boeing Commercial on both new orders and deliveries for the first time.

Now Boeing has been dealt a major blow on the defence side with the Pentagon's killing of the $39 billion Comanche helicopter programme.

In a statement, Boeing said yesterday that the cancellation "is not expected to have a significant financial impact on the company" though it admitted that it would have a major impact on the team working on the programme.

However, it is the latest in a string of setbacks for Boeing, affecting its defence, space and civil aircraft businesses.

The old core business of civil aircraft has been losing market share to Airbus in recent years. It has suffered a string of false starts with plans for new aircraft that were later scrapped. A great deal is riding on the planned 7E7 Dreamliner.

Last year was characterised by allegations of scandals.

In July, Boeing was punished by the Pentagon when it was found to have improperly used thousands of pages of documents belonging to Lockheed Martin in order to win space launch business.

Boeing was indefinitely banned from bidding on military satellite launches, a move that has probably cost the firm in excess of $1 billion.

But it was the winning of the $22 billion US Air Force 100-tanker "lease to buy" deal and its subsequent suspension over new allegations that led to Condit's resignation.


Immediately prior to his quitting, chief financial office Mike Sears and another executive were fired over allegations - which they denied - of unethical conduct. Sears was alleged to have offered a job to a Pentagon official involved in the contract.

The contract was suspended pending investigations. Given the scope of the problems, it is an irony that Condit should fall on his sword. He was the architect of Boeing's successful transition from a firm associated primarily with commercial aviation to one clearly positioned as a global technology supplier.

His successors (his dual roles were split on his departure), Harry Stonecipher as president and chief executive and Lewis Platt as chairman, have their work cut out.

Source: Flight Daily News