Boeing boss focuses on discipline, costs

Chief executive's return boosts company's outlook

? Boeing Co.’s boss is pushy, aggressive and loath to compromise.

That’s the way Harry Stonecipher sees himself — with no punches pulled.

The plainspoken son of a Tennessee coal miner seems to be what the aerospace giant needed at a time when its defense business was drifting into trouble and uncertainty. Formerly the company’s chief operating officer, Stonecipher marched out of a golf-filled, 1 1/2-year retirement in Florida and into the chief executive’s suite last December.

So far, this old-school manager appears to have restored order. The year after Boeing was buffeted by contract scandals, the company’s stock price is up 30 percent, the business outlook has improved and so has morale at its signature commercial aircraft unit despite the protracted aviation slowdown since 2001.

Much of that resurgence is due to brightened industry prospects, heavy U.S. military spending and the new 7E7 airplane project that was conceived on the watch of his predecessor, Phil Condit. But a significant amount of the credit also goes to the craggy-faced, gravel-voiced Stonecipher, who at 68 appears to be reveling in a return to long workdays and in imposing his style of decisiveness and financial discipline at America’s leading exporter.

“I tell people ‘There’s no action items that are on my desk when I leave at night — none,”‘ Boeing’s president and CEO said in a recent interview at company headquarters. “And the first thing I do in the morning at about 4:30 or 5 o’clock is I’m on the computer. If you’re anywhere in the world and you need an answer from Harry, you’re going to get it.”

They’ll get it in all capital letters, too.

Plenty of answers were expected when Stonecipher was called in hurriedly last Dec. 1 to replace Condit, who resigned under pressure with Boeing’s integrity in question over dubious methods used to win lucrative government deals.

Besides trying to restore the company’s sullied reputation, Stonecipher’s top priority has been to save a multibillion-dollar tanker deal with the Air Force that remains in limbo amid a series of investigations. A significant portion of that work would be done at the company’s Wichita plant, which employs about 12,000 people.

Acknowledging that some employees did “really dumb things,” he has been assuring Capitol Hill and the Pentagon that the company is not “a bunch of crooks.”

He also has cut costs, reduced a top-heavy executive bureaucracy and pushed his troops to get going with 7E7 construction. And he’s not hunkering down when it comes to Airbus, which surpassed Boeing to become the world’s No. 1 airplane maker last year — Stonecipher has been on the attack against the rival recently for what he calls unfair European government support.

Boeing has a long way to go to overcome its ethical missteps even if no one else is implicated, and no CEO’s performance can be fully assessed so soon. But there seems to be a consensus that, as aerospace analyst Nicolas Owens of Morningstar Inc. put it, Stonecipher has done “a pretty good job” so far.

“His reputation for taking the bull by the horns is deserved,” Owens said. “He hasn’t minced words.”

With Boeing reeling from the ethics charges, he “took the offensive a little bit and started trying to address that issue in Washington rather than trying to wait for the next phone call from the Department of Justice,” the analyst said.

In addition to working the phones and walking the corridors on frequent trips to Washington, Stonecipher has overhauled ethics policies and required every employee to sign a new code of conduct or lose their job.

His fiery traits were forged in a difficult childhood in Scott County, Tenn., where patience was no virtue in the effort to escape poverty and avoid following his father and grandfather into the mines.

Initially a college dropout, he joined General Motors as a lab technician and spent four years with the company before going back to school to get a physics degree from Tennessee Tech. Following a quarter century at General Electric’s aircraft engine division, he served as chief executive of Rockford, Ill.-based aeronautic supplier Sundstrand Corp. and then McDonnell Douglas Corp., which he merged with the Condit-led Boeing in 1997.

An unrelenting focus on costs alienated Boeing’s unions during his stint as president and chief operating officer from 1997-2001. As a result, his appointment as CEO was greeted by employees with trepidation.

Indeed, cost-slashing and shedding noncore operations have been a characteristic of the Stonecipher administration. He has sold $2 billion in assets from Boeing Capital Corp., the company’s financing arm; trimmed travel budgets; and put operations in Wichita., on the auction block. Other cutbacks are under consideration.

But, aware of his anti-union image, Stonecipher has taken more pains as CEO to keep the work force behind him. His first call after taking the job was to Air Force Secretary James Roche; the next two were to the heads of the two biggest unions.

“I’ve been working 49 years and three months … and I’ve been through just about every job you can think of,” he said. “So, I have some feeling and some passion and some compassion for what people are trying to accomplish.”

Union officials think Stonecipher also has concluded it’s in his and the company’s best interests for him to be less abrasive in his new role.

“Harry Stonecipher as CEO is a different person from Harry Stonecipher as chief operating officer,” said Charles Bofferding, executive director of the Society of Professional Engineering Employees in Aerospace, who lauded him for establishing a new incentive plan for Wichita employees in a contract ratified this month.

“He was more of a strong-arm guy when he was focusing on financial discipline,” Bofferding said. “He’s still very direct as CEO, but I think he’s beginning to figure out that now he has to motivate an entire company to perform.”

Seemingly encouraging the notion of a “softer” Stonecipher, the CEO disputes the stern, “no-nonsense” label often applied to him, saying he tries to bring a light touch to everything he does. Witness the life-size cardboard cutout of him that greets visitors to his 36th-floor corner office.

His protest is mild, however. After all, there are benefits to having a tough-guy reputation.

“I do get pretty intense sometimes,” he acknowledged. “I won’t spend any time trying to change that (image) at all. Because quite frankly, the people who hire me and pay me, that’s what they want — they want no-nonsense.”