Boeing names GM official chief financial officer Hopkins tapped to help modernize production, overhaul accounting

November 17, 1998|By BLOOMBERG NEWS

SEATTLE -- Boeing Co. named General Motors Corp.'s Deborah Hopkins as chief financial officer, hiring from an industry that the jet maker hopes to emulate as it modernizes its production lines and overhauls accounting practices.

Hopkins, 44, vice president for finance at GM's European unit, will start Dec. 14 and will be the highest-ranking female executive ever at the world's biggest plane maker. Hopkins replaces Boyd Givan, 62, who said in July that he would retire.

The appointment of an outsider is rare for Boeing, which is trying to remake production lines in the mold of carmakers like GM.

Boeing last year suffered its first annual loss in five decades and has racked up $3 billion in production-related costs since October 1997. Analysts partly blame outdated accounting practices.

"Boeing today can tell you the exact weight of an airplane to the pound on a daily basis, but it can't tell you the cost of that airplane," said Pierre Chao, an analyst with Morgan Stanley Dean Witter. "That's a problem; its financial reporting systems just aren't designed to provide the type of data that modern investors need."

Boeing Chairman and Chief Executive Phil Condit emphasized Hopkins' "track record as an agent of change."

As GM's general auditor in 1995, he said, Hopkins introduced a system that lets line managers better track the costs and risks of business initiatives.

Seattle-based Boeing missed out on a record surge in orders last year when it faced unprecedented parts shortages and couldn't train enough extra workers in time. That prompted the company to shut down the 747 and 737 lines for a month, airlines complained about late deliveries and in September the company ousted the head of its commercial airplane business, Ron Woodard.

Investors pushed the plane maker to release more financial details after its stock plunged 40 percent and it began a series of monthly updates on production. The new civil airplane chief, Alan Mulally, has set up each airplane program as a separate profit-and-loss center.

Boeing spokesman Larry McCracken said the appointment of Hopkins, who wasn't available for an interview, is another step in revamping its accounting practices.

"It's about people in the trenches getting a clear vision about exactly what their program costs and how it impacts the bottom line," he said. "In the past, they shipped it up to the CFO's office and somebody else added up the costs."

Boeing shares rose 62.5 cents yesterday to close at $42.750.

Pub Date: 11/17/98

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