AEROSPACE INDUSTRY Boeing-Pentagon pact remains in question

Boeing's board persuades former president to return.
CHICAGO (AP) -- Boeing Co. is under new leadership after the sudden resignation of Phil Condit, but the company still faces the same tough questions about the methods it used to secure a lucrative tanker contract from the Pentagon.
New CEO Harry Stonecipher, who was rushed back from retirement in Florida to restore order to the embattled aerospace manufacturer, said Monday that answering those questions -- and fixing Boeing's dented reputation -- will be his chief objective.
At risk is the fate of the controversial $17 billion contract Boeing won this fall to have the government acquire 100 of its 767 jets for refueling tankers, as well as other contracts in its huge defense business.
"Getting the tanker program going and reassuring the government that we are not only compliant but an exemplary supplier is one of the first, foremost and immediate tasks that I have," said Stonecipher, who had retired last year. "This hiccup we've had will cause us to have to do a lot of reassuring with the government."
Asked to return
The 67-year-old former president of the company was asked to return by Boeing's board, where he has served as a director since joining Boeing from McDonnell Douglas when the two companies merged in 1997. Also, former Hewlett-Packard Co. CEO Lewis Platt, who serves on Boeing's board, was named as nonexecutive chairman as the company split Condit's former duties in two.
The legislation authorizing Boeing's tanker contract with the Pentagon was signed by President Bush last week after it won approval in Congress, but it could be delayed from being carried out if Congress calls for additional hearings.
Critics of pact
Two critics of the deal -- Republican Sens. John McCain of Arizona and Peter Fitzgerald of Illinois -- already called last Friday for Defense Secretary Donald Rumsfeld to postpone the deal in light of the recent firings of two Boeing executives.
Those dismissals were made Nov. 24 after Boeing said it learned in an internal inquiry that chief financial officer Mike Sears had negotiated to hire Air Force procurement official Darleen Druyun at a time when she was in a position to influence military contracts involving the company.
The tanker dispute isn't the only controversy to have marred Condit's tenure.
Most recently, the Pentagon punished Boeing for stealing trade secrets from rival Lockheed Martin to help win rocket contracts. Boeing has been indefinitely banned from bidding on military satellite-launching contracts, which has already cost it seven launches worth about $1 billion.
Seven months before that, the General Accounting Office found that Boeing had obtained and misused proprietary information from rival Raytheon as they competed for a missile-defense contract.
Condit's explanation
Condit, 62, said he ended his 38-year career with the company to try to prevent it from getting "bogged down" after a year of upheaval.
"In the end, I concluded that the controversies and distractions of the past year were obscuring the great accomplishments and performance of this company," he said on a conference call.