Boeing Punishes Workers in Scandal
Boeing Co. has begun punitive action against as many as six management employees in its space launch division as it scrambles to reestablish its ability to bid on lucrative government satellite launch contracts.
The company declined to identify those disciplined as part of an ongoing probe of an alleged 1990s corporate espionage spree in which proprietary documents from competitor Lockheed Martin Corp. ended up in Boeing’s files.
The Air Force indefinitely banned Boeing from competing for rocket launch contracts in July because of the industrial spying case.
Boeing spokesman Dan Beck confirmed Friday that the company is engaged in ongoing talks with the Air Force regarding the case. If “further remedial actions are suggested, we will certainly consider them,” he said. “We want to do whatever we can” to have the ban lifted.
Beck would not comment on a published report that one employee involved in the latest round of disciplinary actions was head of the Delta IV military rocket program, Thomas Alexiou. The Wall Street Journal reported Friday that the veteran manager was removed from his position and reassigned. Alexiou could not be reached for comment.
Beck said that Boeing intended to inform employees as early as next week of the actions it has taken. Boeing hopes such actions would persuade the Air Force that the company has cleaned house. “We hope to have the suspension lifted in the next month or so,” he said.
Previously, the company fired two engineers, Kenneth Branch and William Erskine, alleging that they stole secrets from Lockheed Martin in the late 1990s that enabled Boeing to gain the upper hand in a five-year battle to win a high-stakes contract to build the so-called evolved expendable launch vehicle for the Air Force.
In 1998, Boeing landed a contract to build 21 of the 28 satellite launch vehicles for the Air Force. Lockheed, which had been a prime military launch vehicle contractor for years, received a contract for just seven of the rockets.
The U.S. attorney’s office in Los Angeles filed criminal charges against Branch and Erskine in June, and the two men -- who worked at Boeing’s Huntington Beach facility -- have since entered not guilty pleas to the felony charges of conspiracy, theft of trade secrets and violation of the federal Procurement Integrity Act.
Their trial in U.S. District Court in Los Angeles has been set for Oct. 14, but the U.S. attorney’s office said it was likely the trial would be postponed.
Lockheed has also filed a civil suit against Boeing over the alleged espionage, claiming that it gave Boeing an unfair advantage in the Air Force bidding. Bethesda, Md.-based Lockheed is the nation’s largest defense contractor, while Boeing, based in Chicago, is the third-biggest defense contractor and the largest commercial aircraft manufacturer in the world.
