Condit At Boeing Controls -- New President Aims To Pilot Company Through Turbulent, Competitive Times
Most of your customers are losing money.
Your order backlog slid $4 billion in three months.
You just reported a decline in profits.
Wall Street is selling your stock down to levels untouched in years.
Production is being cut back.
You've just laid off more than 2,100 workers locally and are on the way to trimming more than 8,000 jobs overall this year.
You're last in the field launching a new product, potentially giving away a bit of your market to an aggressive competitor.
More than 10 percent of the products you and your rivals have manufactured - some of them relatively new - have been put into storage by your customers.
Some of your business is in defense, not exactly a growth industry.
And you are trying to turn your company inside out, pushing for a new corporate culture that stresses your company's role as a world-class competitor that needs to change to stay in that class.
Welcome to Philip Murray Condit's new job as president of The Boeing Co.
Making airplanes always has been a turbulent business, with continued tough times ahead. Yet, these, and more, challenges face the 27-year Boeing veteran as he takes the helm of a company, known more for its ability to manufacture airplanes and win defense contracts than for progressive new styles of leadership.
If Condit can do it, guiding Boeing through another of its boom-bust cycles and growing competition, he could win the
Northwest's most coveted corporate job, Boeing chairman.
For now, that's Frank Shrontz's job, but Shrontz is taking steps to plan his succession, tapping Condit for a post that has been unfilled for several years. In fact, the last president was Shrontz himself, before he moved to chairman and chief executive. Shrontz, just named Financial World magazine's Man of the Year, already has started reforms, cost-cutting and streamlining. And Condit is optimistic.
"This company is extremely well-positioned in defense and space, and commercial business," Condit said. This year it is expected to reap record profits, though earnings will be pinched next year as aircraft deliveries slow. Production cuts of the 737 and 757 already have been announced. The 1994 outlook remains hazy.
Condit said he believes Boeing is weathering this latest recession better than past slumps, partly because it had such a large ($90 billion-plus) order backlog to help maintain production levels. Another reason, he said, is that Boeing didn't expand production to excessive levels during the order frenzy in the late 1980s, dictating harsh cuts later.
"We are getting signals that 1994 may show improvement," he said, including "fare increases in the U.S. and healthier Southeast Asian and South China airlines that help the overall market. Some parts of the world are very strong."
Still, he said, "We clearly have areas to improve, such as continuous quality and processes. If we're going to be competitive in 10 years, we have to be better. Inventories have to be lower, cycle times shorter, quality better."
Condit's interest in aircraft started early. At 16, he earned his pilot's license, encouraged by his grandfather, James Murray, who was licensed at 60.
"Every Sunday we would have dinner early and then go to the San Francisco International Airport to watch the airplanes," Condit said.
But it was awhile before he made his living working with aircraft. Early summer jobs included packaging detergent his father bought wholesale and reselling it in smaller lots, picking pears, cutting wood and digging ditches.
It was when he was doing roofing work that he decided that after college he'd rather spend his days in an office.
His new digs at Boeing headquarters are big, but unpretentious. On the walls are photographs of Northwest sights. His windows overlook East Marginal Way South; Boeing Field is in the distance. His wooden desk is tidy.
He dresses unpretentiously, too. Some even say he lacks sartorial taste. One day recently, he was wearing a navy-blue blazer, brown pants, navy-blue socks, black shoes and a purple-and-green tie. But co-workers say he can get it all together for important events. Besides, said one: "He's got other things on his mind, and he likes to be casual."
References to his wardrobe are about the only remotely negative thing anybody would say about him.
Friends laugh when they talk about Condit's great impersonation of Inspector Clouseau, from the Pink Panther movies.
Indeed, Condit, who clearly enjoys a good laugh, isn't all business. For example, he likes to windsurf and sail, and he spends all the time he can in the forest. He and his wife, Jan, are building a new house in a woodsy area near North Bend.
Friends and co-workers also admire his honesty, though they say it can get him into trouble.
"He assumes that others are like him," said Chris Longridge, commercial group vice president, sales. "Sometimes he trusts too much. But I wouldn't change him."
Jim Johnson, vice president/manager of Boeing's Everett division, also gives Condit high marks for integrity. Johnson said his new boss - and longtime friend - has "great values, tremendous ethics and is setting a standard for everybody to look up to."
Boeing engineers join in the praise. The 777 design team gave him a standing ovation when he appeared before them for the first time after his September promotion.
Engineers are pleased to have one of their own at the top. (Former Chairman T.A. Wilson, who retired in April 1986 was the last.) Shrontz is a laid-back lawyer and Harvard MBA.
Condit became head of Boeing's New Airplane Division in late 1989. Less than a year later, the unit became the 777 Division after that program was launched in the fall of 1990. Condit was in charge of a new process for designing and developing the 375-seat 777 jetliner that will go into service in mid-1995.
The design-build process tried on the new jet has turned out better than he hoped, he said. With the aid of a sophisticated computer system, engineers are completing design without detailed paper drawings or the need to build complete mockups.
A cross-functional approach also lets designers talk with production people, suppliers and even the users, from the beginning.
For the first time, the airlines contributed ideas in the design stage, rather than later, when a mockup or even the initial airplane was built. The process is expected to save Boeing millions of dollars and a year of development time in launching the airliner. Condit said it will provide a successful product without excessive reworking.
Gordon McKinzie, United Airlines' 777 program manager, said the approach also has saved time and money for United, a launch customer.
"We were apprehensive when we were invited to discuss design issues. It was a little like going into the women's locker room," he said.
McKinzie said he sensed Condit was concerned at first about admitting to customers that Boeing didn't have all the answers.
"But with the risk of new technology today, one can't do it alone," McKinzie said. His team also is working with Boeing on other potential new designs, including one for a jetliner larger than the 747.
Condit's competitiveness and leadership started early. He was president of his Acalanes, Calif., high school class.
The 51-year-old executive is praised for his steadiness and ability to see the big picture, cutting through detail to get to the heart of a problem. "You need to step back and determine how something fits in and how it relates," he said.
Condit, who got his undergraduate degree at Berkeley, joined Boeing immediately after earning a master's degree at Princeton in 1965. He later earned a master's at MIT. His first assignment was working on the never-built supersonic transport. He was based at Langley, Va., using the Dash 80, the first 707, as a simulator for pilot-handling tests for the proposed SST.
He chose Boeing over offers from Lockheed and McDonnell Douglas, he said, because it was a good offer and because he had a good feeling about Boeing.
Condit had planned to pursue a doctorate degree but his adviser urged him to get on with doing the work he loved - building airplanes.
After the SST, he worked on the 747 and then 727 marketing management. In 1974, he entered the Sloan Fellowship program at Massachusetts Institute of Technology, where he concentrated on business courses, and returned as manager of new program planning.
`It was obvious then that Condit had leadership potential," said Ben Cosgrove, a 44-year Boeing veteran, now a senior vice president in the Commercial Airplane Group. `"e's extremely bright, patient and listens - that's half the battle here."
Condit worked on several commercial programs in the 707/727/737 Division until 1978, then on the 757, and became vice president of the Renton Division, which designed and developed all of those models.
He learned another side of the business as sales and marketing vice president from 1984 to 1986, and later, executive vice president of the commercial airplane group.
"Phil is good with customers, people warm up to him right away because they can see he is a no-nonsense guy who knows what it takes and has no hidden agenda," Longridge said.
Longridge added that he was immediately impressed with Condit when they first met 22 years ago.
When they were out trying to sell 737s, "Phil told us to put all the Boeing stuff aside and pretend we worked for Douglas - the Douglas DC-9-50 was our competitor," he said.
After learning everything they could about the DC-9, they were prepared to show customers why the 737 was better.
At Boeing, Condit said he had many mentors, including the late Dick Welch, a financial expert, and well-known engineers, Ken Holtby, now retired, and the late, legendary Ed Wells.
Outside Boeing, he particularly admires Herb Kelleher, chairman of profitable Southwest Airlines, because "he understands how important his customers and his people are. Those are two attributes I admire a lot."
Condit looks beyond Boeing for ideas. He recently participated in a University of Washington symposium on global teaming.
Condit said he wants to get individuals, with specific training and experience, to work more in teams.
"None of us is as smart as all of us," he said.
He also has an excitable side, particularly when it comes to events such as the 777 launch, his colleagues said.
When Boeing was in final negotiations with United for a major order, Condit was attending a school event with his daughter. He ordered Boeing officials to phone him every 20 minutes with a progress report and then left early for Chicago to be there for the conclusion.
Condit said he loves good food, art and music. He formerly owned a sailboat and enjoys windsurfing. In high school, he taught fifth and sixth graders an introductory science course, demonstrating experiments he learned from his dad, a research chemist.
He starts work at about 7:30 a.m. and continues until about 6:30 p.m., attending dinners about three times a week.
"I try hard not to take work home," he said. He watches television news in the morning with his coffee and reads a Boeing news summary at the office and clips throughout the day.
Recent books he's liked included "A Better Way: Redefining the Way American Companies Work," by Donald Petersen, a Boeing board member and University of Washington graduate, who is a retired chairman of Ford Motor Co.; and "Head to Head," by Harvard economist Lester Thurow.
But Condit said he's more of a talker than a reader.
Condit finds time for community work and, like Shrontz, wants to improve education in this state. "Involvement at a level where things get done is important to me," he said.
He is on, or has served on, the boards of John Fluke Manufacturing Co., the Museum of Flight, Camp Fire's Seattle-King County Council, Chief Seattle Council 609, Boy Scouts of America and A Contemporary Theater.
"Our organization looked to him for leadership because he could look at a tough issue and get to a reasonable conclusion, " said Mason Sizemore, a past Camp Fire president and president of The Seattle Times. "It was clear he was there because he was concerned and not just fulfilling an assigned responsibility."
Condit also serves industry as chairman of a National Aeronautics and Space Administration advisory council and on engineering councils at Princeton and MIT. He has won numerous industry awards.
He works with scientists and engineers at the UW and other schools, encouraging education at all levels.
The executive was fascinated with machinery as a child and took clocks apart to find out how they worked. He also was good at home repairs, said his mother, Bernice Condit.
"It was no surprise," she said, when her only child decided to study mechanical engineering at the University of California at Berkeley. Condit began studying physics at the UC at Riverside but said he soon "decided I liked to design things that worked and switched to engineering."
He's spent plenty of time designing and figuring out why things work - especially airplane parts - ever since.
He said he loves the woods and still hikes several times a year.
He laments not having time to become proficient enough to pilot Boeing's big jetliners, or even smaller aircraft today. He said, though, he sometimes climbs into a simulator and has a whirl at the controls.
A thorny situation Boeing executives must deal with is Boeing jet crashes, where faulty design may be a factor.
Condit said crashes become "very personal events" for him. "I think about it a lot," he said. But he said Boeing uses such situations to learn.
When previously he might have been involved "hands on" in finding solutions, he said as president he now has to keep from getting in the way. "It's not always easy to stand back."
Cosgrove said engineers used to grumble when former chairman Wilson got involved in their tasks, but were glad one who understood the technical side was at the top. With Condit at the helm, that same feeling thrives.
Longridge said the enthusiasm about Condit's appointment was felt outside Boeing as well.
"This choice is what makes us admire Boeing so much," Longridge said a British Airways executive told him. "In your company, a guy can get to the top on raw ability."
------------------------------- PHIL CONDIT ------------------------------- -- Title: President, The Boeing Co.
-- 1992 estimated sales: $30 billion.
-- 1991 Profits: $1.6 billion.
-- Employees: 144,000.
-- Salary: Estimated near $750,000.
-- Age: 51.
Copyright (c) 1992 Seattle Times Company, All Rights Reserved.