Boeing's Big Change

This is a partial transcript from Your World with Neil Cavuto, December 1, 2003, that was edited for clarity.

Watch Your World w/Cavuto weekdays at 4 p.m. and 1 a.m. ET.

BRENDA BUTTNER, GUEST HOST: He’s been with the company since 1965. Now Phil Condit of Boeing is going. The CEO of the aerospace giant stepping down in a surprise move Monday. Over the past year, a lot of fingers have been pointed at Boeing for the way it has won some lucrative defense contracts. Condit has not been accused of any wrongdoing, but he says his resignation will be for the better of the company.

Did he leave, or was he forced out? And is this all Boeing needs to get better? Phil Condit joins us now from Chicago along with the man who succeeds him, Harry Stonecipher.

Thanks so much for joining us, both of you, gentlemen.

Mr. Condit, you are leaving, in a surprise move. Nobody had expected it. Why are you leaving?

PHIL CONDIT, OUTGOING BOEING CEO (BA): Well, I think you said it exactly right. I looked at where the company was and how it could best go forward. I have committed almost 40 years of my life to this company. I want to see it succeed. And, my thought was, the best way to move this company forward is for me to step aside, say, OK, that is behind us, now let’s go forward. That’s where I am.

BUTTNER: This was your decision.

CONDIT: Yes.

BUTTNER: Mr. Stonecipher, you used to be with Boeing for many, many years. You take over during very tough times. The company suffering in nearly all of its core businesses. It faces investigations into illegal activities, into unethical conduct in military contracts. What is your first move?

HARRY STONECIPHER, BOEING PRES. & CEO: First move is to strengthen our reputation with our customer and get the tanker program going. I need to convince all the constituencies that we have that we really are a company with high integrity, our people have great ethical values, and behave that way. And so we need to be sure that we answer every question that is out there. And do it in a way that instills confidence. Because, getting this tanker program going with a whole bunch of naysayers on the sidelines will be a festering thing forever, and, we want to do it right. We want to satisfy people and get on with being the great company that we are.

BUTTNER: And Airbus is about to eclipse you as the world’s largest aircraft maker.

STONECIPHER: The largest civil aircraft maker -- yes. That’s what I hear. And we are still very happy, in fact we are extremely pleased with our commercial airplane business, and as the market turns, we’ll be turning and growing with it. And we’re very pleased with the base we’re starting from.

BUTTNER: Mr. Condit, your resignation comes after the top financial executive was fired. Based on unethical conduct, does this come as a result of any of that?

CONDIT: No, that is one piece in this equation of what are the issues, and how can we put them behind us? But you know, the majority of this company, in fact, is performing extremely well. And that is exactly what I want to get over, is a focus on a small piece that is dragging the company down, get that behind us, and let all this great-performing part really show up.

BUTTNER: But under your tenure, though, the Pentagon did punish Boeing for stealing trade secrets from Lockheed Martin?

CONDIT: There was an incident with the EEOV, occurred in 1997, in which there were documents brought by an employee from Lockheed Martin. We have taken action, in fact we took it right then. We have continued to take action. But, you know, those are the kinds of things we want to get behind us, because they are in fact behind us.

BUTTNER: All right. It has hurt, though, your business?

CONDIT: It hasn’t hurt the business as much as it has hurt the reputation. And we are proud of the reputation of this company and we want it to be stronger. That is what both Harry and I are committed to.

BUTTNER: And Mr. Stonecipher, how do you get over that kind of business loss?

STONECIPHER: Business loss, you mean, reputation loss or business loss? You’re talking about the...

BUTTNER: That was both. I mean, you lost reputation and you lost business from the government.

STONECIPHER: But, you know, we are a very large and successful company, I might add, and, yes, it hurts, it hurts a little bit. But we have lost a lot bigger contracts. And we’ll get on to the next one. We wanted to do the right thing with this thing. As Phil said, we fired the people back when it happened. And unfortunately, we say the company did something wrong, it is that the company’s policies and procedures are really pretty darned good. It is having people who violate them that gets us in trouble, and dealing with that is what you have to do. Because it really besmirches the reputation of the company and doesn’t make the employees feel too good about it, either.

BUTTNER: Well, this month a proposed commercial jet is going to be considered for development. How do you stand on that?

STONECIPHER: Oh, I think it is a great idea. I think we need a new airplane program and I think the guys have done a good job, a very thoughtful job and they’re going to be bringing it to the board. And I’m going to be right there beside them helping them present the thing to the board.

BUTTNER: So you back it?

STONECIPHER: Absolutely.

BUTTNER: OK. So...

STONECIPHER: Does that surprise you, you said OK?

(LAUGHTER)

BUTTNER: No -- well, I mean, it was rather controversial. So I wanted to get your take on that. All right. Thank you both very much, gentlemen, we appreciate your appearing with us and your insights.

CONDIT: OK.

STONECIPHER: You bet.

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