Transcript: Damage Control

This is a partial transcript from "Your World with Neil Cavuto," March 7, 2005, that was edited for clarity.

NEIL CAVUTO, HOST: Say it ain't "Boe." Boeing's (BA) CEO is forced out of his job because of an improper relationship, but is that all there is to it?

Harry Stonecipher (search) gets fired only 15 months after his predecessor had to resign in disgrace. Back then, the issue was defense contracting scandals that eventually brought down two Boeing executives and sent them to the slammer. This is something entirely different.

Earlier, I spoke with Boeing interim chief, James Bell (search), and non-executive chair, Lou Platt (search), and asked how long they knew of Harry's sexual affair.

(BEGIN VIDEOTAPE)

LEW PLATT, BOEING NON-EXECUTIVE CHAIRMAN: Well, we did not understand the length of the relationship until we started the investigation, which actually was started not this past weekend, but the weekend before.

So, we were tipped off, basically, by an anonymous employee that there was a relationship and started the investigation — actually talked to the board about it a week ago Sunday, started the investigation on Monday. And it was only then that we learned about the length of the relationship.

CAVUTO: So, he was essentially fired for having this relationship, for fooling around on his wife?

PLATT: No, that's not correct. Basically, that's not in any way a violation of our standards of business conduct. But as we looked at the circumstances surrounding the relationship, we concluded that, basically, he had used poor judgment and that that impaired his ability to lead the company going forward.

CAVUTO: What were those circumstances that, if you don't penalize someone for having an affair, what did he do, presumably, in this relationship that compromised his staying on the job?

PLATT: Well, you know, we're just not going to disclose all of those things. Just suffice it to say that there were some judgmental things there that worried the board, and we thought that that would impair his ability to lead the company going forward.

CAVUTO: Was there coercion involved?

PLATT: No, not at all.

CAVUTO: Is she still at the company?

PLATT: To my knowledge, she certainly is. Yes.

CAVUTO: And she is welcome to stay at the company?

PLATT: As far as I know, yes.

CAVUTO: Do you know, sir, whether she was harassed or complained to any higher-ups at the company?

PLATT: I think it's very clear that she was not. She was very cooperative during the investigation, as was Harry. Both the internal and external people who conducted the investigation said there was no indication harassment. This was a consensual relationship, and they were both very open about that.

CAVUTO: All right. Mr. Bell, if I could continue with you. You are referred to as interim CEO. Does that mean that you are not interested or not being considered to be the permanent CEO?

JAMES BELL, INTERIM BOEING CEO: That's yes on both of your questions.

CAVUTO: So, you're not interested in the job?

BELL: I'm not. I'm pretty pleased with being the CFO, and I'm stepping in to help in this interim period. And I'm looking forward to getting back to my permanent job.

CAVUTO: Mr. Bell, is it safe to say that, had the company not had to endure some of the scandals that you've endured that a man having be affair with a woman would not have been enough to force his resignation?

BELL: Well, I think, as Lou said, that it wasn't the affair that caused the board to ask for the resignation. It was the violation of our code of ethics, our code of conduct.

CAVUTO: What is the code of ethics that was specifically violated here?

BELL: I think you need to ask Lou that question.

CAVUTO: All right. Lou, I'll ask you. What was the code of ethics that was violated here?

PLATT: Yes. The code of ethics clearly states that we expect people will not engage in activities that would compromise the company in any way, or would embarrass the company. And there were details surrounding this relationship that we thought would embarrass the company.

CAVUTO: So Lou, this is not to say that someone who fools around on his wife or significant other gets fired at your company. He must have done something beyond just this relationship that compromised your ethics?

PLATT: That's correct. I mean, when you look at the CEO, you definitely hold the CEO to a higher standard. There's no question about that.

CAVUTO: Yes, but, Lou, CEO's fool around. You know, they've been known to fool around, one or two of them. And I'm wondering, if that wasn't the grounds for his dismissal, specifically what was?

PLATT: Well, I understand CEO's fool around. Harry had established an incredibly high standard here at the company, and we just felt that Harry had violated our code of ethics, as I said.

He got involved in something that was potentially embarrassing to the company. We held him to the very high standard that he had helped establish.

CAVUTO: Well, do you think he was a hypocrite?

PLATT: I don't think he was a hypocrite. I think he just got involved in a relationship. These things happen. I think he believes as strongly today in the code of ethics of the Boeing company as he did last week, but he got involved in something that just — it just happened.

CAVUTO: So no secrets were exchanged or anything like that that would hearken back to the defense scandals your company endured?

PLATT: No. We are confident, based on a very thorough investigation, that there was nothing that was done that went beyond the borders of the company, that there was nothing done that will end up compromising us with the government or with any of our customers.

CAVUTO: All right. Now, I know Mr. Bell is not interested in this CEO job, but if the board were to come to you, Mr. Plat and say, "Rather than be non-executive chairman, we want you to be running the company as CEO on a daily basis," what would you say?

PLATT: Well, I guess what I'd say is been there, done that. You know, I'm about to turn 64. I think we ought to be out looking for someone who is younger, who certainly could lead this company for many years to come. So...

(END VIDEOTAPE)

CAVUTO: No word who that might be just yet.

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