Associated Press
Boeing Ousts CEO Due to Relationship
Monday March 7, 9:42 am ET
By Dave Carpenter, AP Business Writer
Boeing Board Ousts Stonecipher As President and CEO Due to
Relationship With a Female Executive


CHICAGO (AP) -- Boeing Co. on Monday said its board forced out
president and chief executive officer Harry Stonecipher because of a
relationship the married, 68-year-old Stonecipher had with a female
executive at the company.
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The unexpected ouster makes Stonecipher, who spent just 15 months in
the top job, the second consecutive CEO to depart the Chicago-based
airplane maker and defense contractor in disgrace.

His predecessor, Phil Condit, resigned Dec. 1, 2003, as a result of
the defense contracting scandals that ultimately sent two Boeing
executives -- ex-Air Force procurement official Darleen Druyun and
chief financial officer Mike Sears -- to jail.

Chief financial officer James A. Bell, 56, was named president and CEO
on an interim basis.

Boeing shares fell 88 cents, or 1.6 percent, to $57.50 in early
trading on the New York Stock Exchange.

Boeing said an internal investigation prompted by information sent
anonymously to chairman Lew Platt and the company's legal and ethics
leaders 10 days ago revealed a "consensual" relationship between
Stonecipher and the female executive that the board determined was in
violation of the company's code of conduct.

"The board concluded that the facts reflected poorly on Harry's
judgment and would impair his ability to lead the company," said
Platt, who is to assume an expanded role at the company.

He said the requested resignation "was in no way related to the
company's operational performance or financial condition, both of
which remain strong."

Spokesman John Dern said the female executive, who was not identified,
did not report to Stonecipher and remains with the company. He
declined to provide further details.

"This raises a lot more questions than it answers," said analyst
Richard Aboulafia of the Fairfax, Va.-based Teal Group.

Stonecipher also was dismissed from Boeing's board, which he had been
a member of since joining the company from McDonnell Douglas when the
two companies merged in 1997.

The tough-talking son of a Tennessee coal miner, Stonecipher had been
credited with helping Boeing to clean up its ethical behavior and with
improving its sullied reputation in Washington. The company's stock
surged 52 percent during his tenure.

He also is one of its largest stockholders as a result of the
McDonnell Douglas deal.

Stonecipher failed, however, to win back the tainted $23 billion
air-refueling tanker contract that the Pentagon pulled from Boeing
because of conflict-of-interest violations involving Druyun and Sears.

He turns 70 in May 2006 and had been expected to retire early next
year.

Stonecipher and his wife, Joan, are well-known contributors to the
arts in Seattle and to some colleges, including Tennessee Technical
University, his alma mater.