OKLAHOMA CITY -- This week,

Force Protection

(FRPT) - Get Report

took aim at its own CEO.

The military vehicle maker

announced the "retirement" of Gordon McGilton late Tuesday with the company's stock -- once a $30 highflier -- hovering near a 52-week low. But the damage has already been done.

Less than a year ago, Force Protection monopolized a lucrative niche industry as the leading seller of mine-resistant ambush-protected vehicles. Since last summer, however, the company has steadily lost market share to larger rivals managed by veterans in the manufacturing industry.


( NAVZ) and

BAE Systems

now rank as the leaders of the multibillion-dollar MRAP program.

McGilton cashed out most of his Force Protection stock when the company was still on top. Early last year, he exercised 1 million options -- right after they vested -- and sold the underlying stock at nearly five times the current share price. He retains just a minor stake in the company.

Force Protection showered McGilton with stock options just days before adopting a new compensation policy that abolished option grants for employees.

Force Protection has favored McGilton in other ways as well. Perhaps most notably, the company has paid the

CEO's firm -- known as APT Leadership -- more than $1 million for consulting and training services. In addition, a lawsuit filed by former executives claims, the company shelled out $50,000 for early-stage APT software that was still being tested for bugs.

"Drew Felty, formerly an accountant at Force Protection, reported that the APT system did not work as well as the current Excel system being used by Force Protection," the complaint states. "When McGilton learned that Felty was questioning Force Protection's use of APT's system, McGilton sent Felty an email where he scorned Felty for not being able to use the APT system correctly."

But "the reason that Felty -- or anyone else at Force Protection -- could not use the APT system properly was because it did not work."

Thomas Thebes, Force Protection's CFO at the time, felt that the APT deal violated the company's code of ethics and noted his concerns in a written complaint. He and Garth Barrett, Force Protection's original founder, resigned soon afterward and went on to form a competing company.

Force Protection sued that company, known as Protected Vehicles, for allegedly stealing its secrets. The new company and its leaders countersued, going public with complaints about alleged financial shenanigans last fall, but the company has since shut down.

Force Protection has weathered accounting problems in the meantime. In its latest quarterly report, Force Protection revealed that government audits "have generally been highly critical" of the company's financial system, and it warned that future audits could threaten its entire operations.

Since then, Force Protection has lost out on major MRAP awards despite a rapid delivery schedule that beat tough deadlines. It has also struggled to hire and retain qualified financial managers.

At this point, some experts fear that only a buyout can save the struggling company. However, a former employee says, McGilton has scared away potential suitors already.

"McGilton insists that the rest of the world -- including companies such as BAE and

General Dynamics

(GD) - Get Report

-- has been doing things wrong forever, and that Force Protection is the first company to do things right," the former employee says. "So everyone who gets involved with Force Protection winds up hating the company and McGilton" in the end.

Even bullish shareholders have started to lose their faith. They have lost plenty of money, too, with the stock now down 85% from last summer's record highs.

Analysts, who once embraced Force Protection's stock, have largely given up on the company as well. Only one major analyst still recommends the stock, down from five just 30 days ago.

Critics blame McGilton and fret over the fallout from his reign.

"He has been milking the company and using it as a huge experiment," one former executive complained to


late last year. "It's just sheer madness ... Force Protection had a terrific future as a business -- and this country had a terrific resource -- until McGilton came in" and took charge.