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BOEING CHAIRMAN, CEO PHIL CONDIT RESIGNS

01 Dec 03. Boeing Co. chairman and chief executive Phil Condit has resigned, the aerospace manufacturer announced Monday. The company’s board accepted Condit’s resignation after deciding “a new structure for the leadership of the company is needed,” according to a Boeing statement.

The board named Lewis E. Platt, former Hewlett-Packard Co. president, CEO and chairman, as non-executive chairman and Harry C. Stonecipher, former Boeing vice chairman, president and chief operating officer, as president and CEO, effective immediately.

“Boeing is advancing on several of the most important programs in its history and I offered my resignation as a way to put the distractions and controversies of the past year behind us, and to place the focus on our performance,” Condit said in a statement. Condit’s exit comes a week after Boeing unexpectedly fired its top financial executive for unethical conduct, saying he negotiated the hiring of a missile defense expert while she worked for the U.S. government and could influence Boeing contracts. The Pentagon’s Office of the Inspector General is investigating the circumstances surrounding the expert’s departure from government service.

Shares in EADS (Paris:EAD.PA – News) surged in afternoon trading after the announcement. At 1350 GMT, EADS stock was up 4.12 percent at 18.95 euros. Boeing announced earlier that Chief Executive Phil Condit had resigned in an effort to put to rest recent “distractions and controversies”.

Comment: This surprise resignation will reverberate around the international aerospace and defense industries, with EADS shares reacting accordingly. Condit was the architect of Boeing’s strong defense and space divisions in an effort to break away from reliance on the declining civil market following 9/11 and strong competition from EADS. It may also put on the back-burner any discussions with BAE SYSTEMS with regard to future co-operation.

This announcement may also affect the FSTA, UK £20bnPFI air-to-air refuelling requirement where the Boeing-led TTSC team is battling against the EADS-led AirTanker team. Recent information suggests that the AirTanker bid may have met with favourable results from the MoD, where EADS is attempting to break the Boeing monopoly on air-to-air refuelling. The US, Italy and Japan have chosen the Boeing solution whilst Germany and Canada have chosen an A300-based solution from EADS. Two factors appear to be in AirTanker’s favour, one being the reluctance to re-engineer existing used airframes and the fact that the UK Government will reive a royalty on the wings and engines for all new A330 aircraft, repaying the large grants given to Airbus and Roll-Royce.

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