Getting Boeing To Fly Right

CFO Deborah Hopkins is forcing the guarded giant to shine a spotlight on where it's losing money

On the eve of a key interview for the chief financial officer post at Boeing Co. last September, Deborah C. Hopkins learned that her 17-year-old son, Patrick, had been seriously injured in a car accident in Detroit. Thousands of miles away in Zurich, where she was based as GM Europe's CFO, Hopkins felt helpless. Unable to get a flight until the next day, she cried all night. But Hopkins kept her morning interview with Boeing President Harry C. Stonecipher, mainly to distract her from thinking about her son's shattered leg and pelvis.

That's Debby Hopkins. To be sure, her family comes first. But she's also supremely practical. Putting her son's accident out of her mind for a few hours--he has since recovered--Hopkins gave Stonecipher her take on the huge problems facing the aerospace giant. Although she says she was mightily preoccupied, Hopkins was sharp enough to emerge as the top contender for the job. To those who know her, that's hardly a surprise. A master communicator, Hopkins is known for her ability to dissect complex financial problems and offer clear solutions even the numerically challenged can understand. "She was good at selling her ideas," says former boss G. Richard Wagoner Jr., president of GM North America. "She got a round of applause at the end of one presentation. That's unheard of for an auditor."

LONG WAY TO GO. Since starting at Boeing last December, Hopkins, 44, has found herself facing her biggest challenge yet. In recent years, the company's all-important airplane unit has been hit by production crises that led to a loss in 1997 and meager profits in 1998. Although a recovery now looks under way--the company has shown three straight quarters of improving profits--it still has a long way to go to improve efficiency. Hopkins' mission is to ensure that Boeing continues to make strides in updating its antiquated production techniques and accounting practices, even as slowing orders could cut revenues some $10 billion next year.

That won't be easy. Behind the snowballing production problems, one of Boeing's biggest difficulties has been its secretive culture and a stunning lack of financial accountability. Hard to believe, but before Hopkins arrived, Boeing never broke down the detailed costs of making its planes, rockets, and weapons. It simply developed and built its products and worried about costs later. And Boeing's managers further hurt their credibility on Wall Street with their inability to provide an accurate picture of how deep the troubles ran. Says longtime aerospace analyst Paul H. Nisbet of JSA Research Inc.: "You couldn't understand what was going on financially with that company."

Trim and athletic-looking with a shock of short black hair, Hopkins comes with a stellar track record as both a smooth negotiator and hard-nosed cost-cutter from her two previous employers, Unisys Corp. and General Motors Corp. Applying the skills she learned in the automotive and computer worlds, Hopkins, the youngest executive and only woman in Boeing's corporate ranks, started with the basics. Which planes and rockets make money, and which programs are in the red?

NEW SCORECARD. Hopkins doesn't have all the answers yet, but she and her team of finance wizards are asking the right questions and crunching the numbers. "My goal is to drive [the discipline of] finance as a force in this company," Hopkins says. Adds Boeing CEO Philip M. Condit: "We are going to be paying a lot more attention to the numbers. Our intent is to be unrelenting. We look to Debby for that." Hopkins' team is making a full court press to measure such benchmarks of performance as how quickly each production line goes through its inventory or how many man-hours it takes to build a plane. "If you can measure it, you can improve it," she says.

But first, everyone must understand the problems. That's where Hopkins' communications skills come in. Using the measurements her team has developed, she has put together a "value scorecard" that allows each Boeing unit to compare its performance with the rest. And a big part of her job now is preaching the gospel of improving efficiency to the rank-and-file. In a recent breakfast speech to 600 workers at Boeing's sprawling Everett (Wash.) plant, Hopkins enthusiastically explained how better inventory controls could free up billions for expansion. With Boeing shedding about 3,000 jobs a month, no one missed her point: The only source of secure jobs is a healthy Boeing.

She doesn't shy from the hard facts either; many unprofitable programs must be shed. But by showing why that's needed, Hopkins is winning respect even from union leaders. In the old days, "the company would say they were subcontracting because it was cheaper but they could never prove it cost less," says Bill Johnson, president of the International Association of Machinists & Aerospace Workers District 751. "Now we will have some accounting for how much parts cost." The improved atmosphere is one reason Boeing's unions recently voted against a strike, despite the prospect of layoffs.

It's all a long way from Hopkins' first job where, as a high school student working at the Saks Fifth Avenue store in Troy, Mich., she both modeled and sold clothes. Although she considered a career in sales, Hopkins realized she would never make big money in retailing. After graduating from Walsh College in 1977 with an accounting degree, Hopkins took a finance job at Ford Motor Co. One of her first tasks was analyzing the surprisingly complex costs of producing tractors and setting the price Ford should charge. She then defended her decision to macho automotive execs who pummeled her with questions. "You had to know your stuff," says Hopkins.

But Hopkins didn't fit in at Ford and soon left. Married and with a new baby, she was the only woman in the department and was pressured to work long hours. Ford, she says, just "didn't get women" back then. Landing at computer- maker Unisys, Hopkins turned down a prestigious job at its Philadelphia headquarters because she thought the move would strain her marriage. Her marriage broke up anyway, and Hopkins became a single mom with two young kids. Then, while on a trip to Europe, she met her future husband, David Hopkins, who was the Unisys marketing director in Europe.

The two married in 1990, and with David encouraging her to take more risk, Hopkins moved to a bigger job at Unisys' headquarters. She became a key figure in the company's restructuring effort, which most observers believe staved off bankruptcy. Huddling in a hotel room for six straight weeks in 1991, she and a partner hammered out a detailed reorganization plan to repay Unisys' $300 million debt.

Her success at Unisys caught the eye of GM, which hired her in 1995 to update its auditing of joint ventures. Hopkins moved to Zurich in 1997 to become CFO of GM Europe, while her husband also went to work for GM, helping its dealers convert to the euro. A year later, Stonecipher called. Now, 50-year-old David has stopped working, content to take flying lessons and be in charge of cooking dinner.

That has freed Debby Hopkins to focus on the heavy lifting needed at Boeing. Although it's hard to measure her progress so far, investors and analysts are hopeful. In part, they're happy that she's putting an end to the contentious relationship Boeing has had with investors. That means crisscrossing the country, meeting with its biggest shareholders and promising that those bad old days are over. And for Boeing, that's just what the doctor ordered.

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