Magazine

Boeing: A Victim of Enron Mania?


"Boeing's secret" (Cover Story, May 20) was way off target. There was no secret--Boeing Co. did not hide its production problems in 1997.

Your reporters wanted to advance the Enron Corp. story on the back of an international icon. In the process they did a disservice to Boeing's leadership and its employees. Here is a sampling of third-party reviews available:

From Goldman Sachs: "Questions raised by BusinessWeek were irrelevant...We consider Boeing's approach to program accounting to be...relatively conservative."

From Merrill Lynch: Boeing's program accounting "follows the normal accrual accounting convention of trying to match costs and revenues."

From Morgan Stanley Dean Witter: "Biz Week article misses mark."

Larry McCracken

Vice-President for Public Relations

Boeing Co.

Chicago

I feel your magazine owes an apology to the employees of Boeing, their shareholders, and the general public. It is this reader's understanding that, after the Enron scandal, Boeing was found to be one of only two companies that discloses stock option payments it makes to its executives...a problem at the very heart of what Enron did wrong.

Bruce Manning

Creve Coeur, Mo.

In your recent issues, I find more and more "rear-view mirror" articles. Case in point: "Boeing's secret" and three weeks earlier, the GE article ("The education of Jeffrey Immelt," Cover Story, Apr. 29). Every company has now become an Enron suspect until proven innocent--even though the practices of both companies can withstand current general accounting standards.

Old news at best, but another unnecessary worry for investors.

Peter C. Steimer

Mission Viejo, Calif.

As one who walked around the halls of the now-lost McDonnell Douglas Corp., I can say that most of the people here in St. Louis had no idea what was going on behind the scenes. We were all sold a bill of goods by Boeing. From the son of the gritty founder who had no will to continue the family heritage to the outsider who wanted a fast solution, one thing is certain: Compared with the personal drive that created the F-15 and sent a man to the moon, the "new generation" is soft in more places than the Pillsbury doughboy.

I. John Kozul

St. Louis

I read with great interest your excellent article on how Boeing may have concealed its production and supply problems in 1997, which might have harmed its plan to acquire McDonnell Douglas. I have done some research on the shareholder value implications of production problems. In fact, the motivation to study this issue was sparked by the news release by Boeing in late 1997 about the production problems. At that time, I found it very strange that Boeing would make the announcement after the merger was approved. Such problems do not happen suddenly, and I had a feeling that Boeing managers perhaps knew about the problems long before but did not reveal it, as the news would have scuttled the merger. This was pure speculation on my part. Your article strongly indicates that this indeed was the case.

Since senior managers were aware of the problems, it might be interesting to see the extent of insider trading by Boeing managers around the time of the merger announcement. Thanks again for a good piece of investigation.

Vinod Singhal

Professor of Operations Management

Georgia Institute of Technology

Atlanta "Murder in the Netherlands" was excellent, but it just scratched the surface (News: Analysis & Commentary, May 20). Does Europe need immigrants? If yes, what kind? Why must asylum seekers from Afghanistan end up in Germany or France, not in Pakistan or Iran where they would be better equipped to deal with the local culture and begin a new life more successfully? Any European merely asking these questions risks being labeled a racist, Nazi, or worse. I have lived in Europe for the past 14 years and have witnessed this firsthand as well as seen it in the European media.

True, many rightist politicians addressing the immigration issue have, by digressing into arcane, irrelevant, and largely incorrect discussions of World War I and World War II, given leftist politicians and the media the excuse not to address the real issue. But immigration from countries very different from those in Europe is radically changing the social fabric. Choosing not to discuss this fact has not made it go away.

Carl Alan Key

Vienna

Let's see: Pim Fortuyn was for direct election of local representatives, cutting school class sizes, and gay rights. He was against female genital mutilation and was assassinated by a left-wing animal rights activist. And yet Fortuyn is described by BusinessWeek as an "extremist"?

Pray tell, what exactly do you consider "middle of the road"?

Scott R. Rausch

Chicago

Congratulations on your excellent analysis of the Dutch situation and the European situation in general. The scary corrosion of public life in most European countries has been going on for the past 15 to 20 years. The unresponsiveness of the mainstream political parties and politicians produced Jurg Haider in my native Austria and Jean-Marie Le Pen in France.

The mainstream parties, left and right of center, have such a low tolerance for political incorrectness that charismatic figures with pronounced views of what needs to be changed will continue to thrive in formerly marginal political parties and permanently change the political landscape.

This will be even more so as Europe becomes socially more divided and altogether more heterogeneous--much more like the U.S., even if [European Commission President] Romano Prodi and others on Cloud Nine like to believe otherwise. Sad as it is, Pim Fortuyn did not die in vain.

Bernhard K. Kopp

Oak Park, Calif.

There is a perceived belief that because there are so many nonwhite faces in Europe nowadays, white Europeans fear being swamped with people from different countries sponging on their welfare states. The truth, however, is that we have a declining population in most European countries, and we need the people from outside Europe to take care of our elderly and indeed pay taxes to support those very services the aging population demands. The irony is that Pim Fortuyn paid with his life to elevate his party in Dutch politics. Let us hope that his party contributes to positive policies for all.

Talat M. Basharat

London "The PGA Tour: Where's the green?" (Sports Business, May 20) was a disappointment to the PGA Tour and its many sponsors.

Sponsors continue to be drawn to our sport for four primary reasons:

1) They appreciate the image of integrity, sportsmanship, and charity that is the foundation of the Tour.

2) Our fan base has shown steady growth that has accelerated in recent years.

3) Ratings for PGA Tour telecasts continue to buck the trend of declining ratings for sports.

4) Tour events offer title sponsors exceptional opportunities for brand exposure and client hospitality.

Given these facts, it's disappointing that BusinessWeek chose to characterize our current environment as one of "sponsor fade-out." In fact, it's one of continued strong support from sponsors.

Robert J. Combs

Senior Vice-President

PGA Tour

Ponte Vedra Beach, Fla. I liked Robert Barker's parody of Tyco International Ltd. ("10 ways to prop up Tyco," BusinessWeek Investor, May 20). I am a Tyco long, but Tyco's execs certainly deserve to have their noses tweaked a bit.

Daniel Hoffman

Philadelphia

Excellent satire. Tyco is a train wreck looking for a curve. In January, I suggested to friends to get out or short. I won't have to buy beer for months.

Paul McWilliams

Shawnee Mission, Kan.


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