top executive said the company soon hopes to put its tainted past behind it and repeated his forecast for a robust commercial plane market.
The aerospace giant expects to move forward later this month to resolve ethics scandals over Pentagon contracts, said Harry Stonecipher, Boeing's president and chief executive, who came back from retirement to restore the company's reputation following the December 2003 departure of former CEO Phil Condit.
Speaking Tuesday at an S.G. Cowen investment conference in New York, Stonecipher said Boeing would seek an overarching resolution to the scandals and suggested recent media reports that the company is seeking a settlement with the government are correct.
But Stonecipher contradicted reports that Boeing had switched from an aggressive court defense to a settlement strategy, saying the aerospace giant all along wished to "settle" all issues with the government. He said he had told officials: "You define the problem, and there's just one answer. We're going to fix it. If we have contracts that are tainted, we're going to cure them. If we owe you money we're going to pay."
Stonecipher said Boeing had been waiting for investigations into the scandals to conclude so that it understood all the issues. Now the only remaining event appears to be the planned Feb. 18 sentencing of Michael Sears, he said.
Sears is the company's former chief financial officer, who helped negotiate a Boeing job for Darleen Druyun, a former Air Force acquisitions official. Druyun admitted she favored Boeing while negotiating a $250,000-a-year Boeing job for herself as well as employment for family members. She received a nine-month prison sentence in October.
A separate scandal revolves around Boeing's bidding on government rocket launches. The Pentagon suspended Boeing from bidding after it found the company acquired documents from rival
After the Sears sentencing, Boeing should be able to "move forward" toward a resolution with the Pentagon, Stonecipher said, adding that while the company prefers an "overarching" strategy, it is prepared to resolve issues separately.
Looking ahead, Stonecipher remains confident about Boeing's ambitious forecast for 375 to 385 commercial plane deliveries in 2006. The forecast, which accompanied the company's earnings release last week, prompted investors to scoop up Boeing shares.
The CEO said Boeing was seeing traffic and demand sufficient to support its outlook. The "interest level" in airplanes is as high as it has been in a "long time," he added.
The Middle East, India and Russia are markets where demand will be high, Stonecipher said, with traffic rising more than 30% a year in the United Arab Emirates and Qatar, and forecasts for 25% traffic growth for India.
Meanwhile, large jet leasing companies are saying that every plane they have is being used, he added.
Boeing is working hard to notch sales and avoid past missteps, Stonecipher said. Repeating comments he made in 1997 that Boeing was "arrogant and insular," Stonecipher suggested those attributes more recently caused the company to lose business to archrival Airbus. Boeing has been sending out top executives to meet with customers in an effort to change that perception.
"Taking good care of the customers you have is very important, because getting new ones is very difficult," Stonecipher said.
The CEO said Boeing is looking both outside and inside the company for his successor, but there's no rush. Stonecipher said he's willing to stay until the company's annual meeting in May 2006, and would even work longer if the Board were to ask.
Boeing shares were up 79 cents, or 1.5%, at $53.29, after Stonecipher's remarks.