(FORTUNE Magazine) – Fittingly for a man who rules over a company with near total air supremacy in this hemisphere, Phil Condit works much of the time from an office in the sky. By his own reckoning, he spent the equivalent of 73 eight-hour days aloft over the past year, traveling to visit customers, investors, and Boeing's far-flung plants. Fortunately, his new Boeing Business Jet (a modified 737) is outfitted with a newfangled AquaJet shower, which cleanses and recycles its water, a CD player loaded with the opera tunes he sings along to, a fax machine, and an early version of a service called Connexion by Boeing, which by next year will be providing broadband Internet access to passengers on commercial flights. This allows the CEO of the world's largest aerospace company to function as a sort of one-man Strategic Air Command, issuing directives, thinking big strategic thoughts, and retrieving e-mail while above the clouds.

Many of the e-mails Condit receives these days, however, bring him down to earth quickly. They come mostly from Boeing engineers, and the engineers are mad. They feel Condit has taken a wrong turn. They feel he has betrayed the Boeing legacy. They say that Boeing, as Condit paraphrases it, is "unwilling to take the big gamble....Unwilling to step out. And doomed."

The source of their fears is no mystery to Condit. Boeing has always been less a business than an association of engineers devoted to building amazing flying machines. Sheer technical bravado--and at times an almost willful disregard for financial realities--have defined a company that designed the B-52 in a single weekend, wagered three-fifths of its assets on the 707, and launched the 747 when many observers (including FORTUNE) declared it potentially suicidal.

But now, for the first time since it launched the jet age, Boeing has no plans for an all-new plane. While rival Airbus Industrie seems poised to launch its superjumbo A3XX this year, generating headlines and gobs of what one analyst calls "karmic buzz," a newly cost-conscious Boeing will likely settle for stretching its 747, a 34-year-old design. Meanwhile, R&D spending is down, head count has been pared from 230,000 to 185,000, and last year the once unthinkable happened when Airbus sold more planes than Boeing. "The sense of destiny has dropped precipitously," says Stan Sorscher, a Boeing physicist and union negotiator.

To less impassioned observers, it would appear that Boeing could use less "destiny" and more sense. After all, the days when technical marvels automatically produced marvelous profits are long gone; airline deregulation, the maturing of jet technology, and--on the military side--the lack of a Soviet-sized threat all mean that "higher, faster, farther" has given way to "cheaper, cheaper, cheaper" as aviation's mantra. Boeing, moreover, proved itself particularly inept at this new game. Its backward manufacturing and financial practices caused the disastrous shut-down of its production lines in 1997--and its first red ink in half a century--just as booming orders should have meant record profits. Once the eighth-most-admired company in America, according to FORTUNE's poll, Boeing tumbled toward the bottom of its own industry. As if in sympathy, one of its Delta rockets blew up in August 1998, taking a $225 million communications satellite with it.

This year there has finally been real boing in Boeing, the result of some 1980s-style restructuring. Operating margins in its passenger-jet business climbed from last year's 4.2% to 8.9%, cash flow is projected to be a thunderous $3 billion or more for 2000, and the stock has rebounded a spiffy 83% since March, ending a three-year spell in which it sputtered well below its peak. On a recent afternoon in Condit's office overlooking Boeing Field, there was a vase of 54 white roses to celebrate the day's closing price of $54, a 30-month high. For once, Condit received a nice e-mail--from his 86-year-old mother, who exclaimed, "Wow! Double wow!"

To the doomsayers, though, this is mere confirmation that Boeing is more interested in profits than products--and they think they know exactly why things have gone wrong. In 1997, Boeing acquired McDonnell Douglas, the St. Louis competitor whose historic caution and conservatism had allowed Boeing to all but blow it out of the jetliner business. Several McDonnell executives now occupy surprisingly powerful positions in the combined company. These include former McDonnell CEO Harry Stonecipher, Condit's No. 2, whose brand of tough-talking, show-me-the-money management strikes many of the Boeing faithful as noxious and shortsighted. His ascendance is flourished as proof that, as the joke around Seattle goes, "McDonnell Douglas bought Boeing with Boeing's money." More than one analyst uses the term "reverse takeover."

For employees who have swallowed unspectacular pay for the glory of flight, this idea is little short of heresy. The white-collar engineers union, which had long functioned more like a professional debating society (and whose alumni include many of Boeing's top managers), has lately been behaving like real organized labor, affiliating with the AFL-CIO and, in February, launching the first major strike in its 56-year history. Craving "respect" and more exciting assignments--as well as more prosaic things like better benefits--the union caught management off guard by holding out for 40 days and delaying the delivery of at least 50 planes. "We weren't fighting against Boeing," explains union leader Charles Bofferding. "We were fighting to save Boeing."

It's not just insiders who worry that Airbus has become to Boeing what Boeing once was to McDonnell Douglas. "If in fact there's a reverse takeover, with the McDonnell ethos permeating Boeing, then Boeing is doomed to mediocrity," says James Collins, co-author of the bestseller Built to Last, which used Boeing as a case study of sustained greatness and McDonnell as its "comparison company." "There's one thing that made Boeing really great all the way along. They always understood that they were an engineering-driven company, not a financially driven company. They were always thinking in terms of 'What could we build?' not 'What does it make sense to build?' If they're no longer honoring that as their central mission, then over time they'll just become another company."

So while commentators have finally grounded their fleet of "tailspin" and "nosedive" metaphors, a new one might be appropriate: struggle in the cockpit. One insider calls it "the Boy Scouts vs. the mercenaries," while an analyst talks of "the goggleheads vs. the MBA weenies." Whatever metaphor works best, the fact is that Boeing is a company at war with itself, fighting its own people, its own outmoded systems, and its own history in an attempt to rebuild itself from the inside. Forget Boeing vs. Airbus. The future of the industry may hinge on Boeing vs. Boeing.

At the center of this face-off is 64-year-old President Harry Stonecipher, a man who says he admires Harry Truman "simply because of his decision to use atomic weapons" and likes to quote the President's remark, "I don't give 'em hell; I just tell the truth and they think it's hell." Impatient, unsentimental about his chosen industry, and valuing the image of decisiveness above all, he has emerged as an object of both fear and some loathing within Boeing. "Harry's looked after his own ass every place he went," says Bill Johnson, president of the blue-collar machinists union. "They put a muzzle on him for a while, then he comes out and makes another asinine statement."

The son of a Tennessee coal miner, Stonecipher graduated high school at 16 and married at 18 prior to spending 26 years at General Electric's aircraft-engine unit, where he rose to the No. 2 spot. After a stint in the top job at Sundstrand, a scandal-plagued defense supplier that he helped turn around, he rocketed to the ranks of the business elite in 1994, when he became the first McDonnell Douglas CEO whose last name was neither McDonnell nor Douglas.

Stonecipher quadrupled the company's stock price, in part by slashing costs to revive profitability. "Selling a hundred airplanes and making a thousand dollars is less attractive to me than selling ten airplanes and making a million dollars," he declared. But he also failed to stem what many analysts considered an erosion in McDonnell's long-term competitive prospects. First the Pentagon eliminated it from the crucial Joint Strike Fighter competition, instead choosing Lockheed Martin and, stunningly, Boeing, which last won a fighter competition in 1931. On the commercial side of the business, meanwhile, years of underinvestment had turned the former Douglas into the RC Cola of airplanes--third place in a two-way race. Stonecipher predicted a Chrysler-like comeback, insisting, "If we weren't already in the commercial aircraft business, we would be looking for a way to get in." (This struck some at Boeing as sublimely funny, and a large picture of Stonecipher went up in Boeing's commercial offices with the quote affixed beside it.) But soon he was looking for a way to get out, and once the Boeing merger had closed, in August 1997, Boeing took a $1.4 billion write-down to shutter most of Douglas' antiquated production lines.

After the merger, though, the cost cutting that had failed to save McDonnell quickly became a fact of life in Seattle. In one small sign of things to come, Boeing employees were asked to bill expenses in their own names rather than in the company's, bringing them in line with St. Louis policy. More significantly, Stonecipher pushed management to play tougher with its work force; Boeing introduced the much maligned slogan "Less family, more team" and ended its policy of automatically passing along one union's gains to another. Says Don Krebs, an organizational psychologist who consults for Boeing: "I think St. Louis is the dominant culture."

Stonecipher also began demonstrating the kind of "straight talk" he exhorts subordinates to practice. In a 1998 speech to Seattle's Rotary Club, he called Boeing "arrogant," described its past financial performance as "absolutely dismal," and said he was "embarrassed" that the company had a market capitalization only a quarter that of nearby Microsoft. "Our problem," he later declared, "is us." It was a rude jolt to Boeing's familial--some would say sleepy--culture, and talk of a "Stonecipher problem" grew louder when the board of directors extended his mandatory retirement date to 2002. "There was a little surprise that a guy running a failing company ended up with so much power," says Dick Albrecht, a former Boeing executive vice president. "The bottom line is, we like Phil Condit," says Dick Schneider, a negotiator for the machinists union. "We're just not very appreciative of former McDonnell Douglas executives."

Phil Condit was, and still is, considered a bona fide "Boeing guy" in the best tradition of the company's engineering fraternity. Amiable and reflective, he was smitten by the romance of aviation from an early age, sending away for a Pan Am route chart to plaster on his bedroom wall, earning his pilot's license at 18, and collecting several technical degrees. Joining Boeing in 1965, he gained a reputation as both a brilliant aerodynamicist and a gifted communicator, assuring his 1996 accession to the throne by heading up development of the 777. Continental Airlines CEO Gordon Bethune, who worked under Condit at Boeing in the late '80s, once said of him, "He glows in the dark, he's got so much brain."

Condit's management style is decidedly more gentle than Stonecipher's, favoring consensus and what he terms "aggressive listening." In the mid-1990s he had several hundred managers undergo a development program that included listening to a jazz pianist, watching improvisational dance, and having a freelance corporate poet--that's right--read passages aloud from Beowulf. Invited to Condit's house for an evening (ever the engineer, Condit had designed a miniature train that chugged through four rooms and could deliver drinks to guests), the managers were each told to write down an unpleasant memory about Boeing. Then they cathartically consigned it to the flames of Condit's fireplace.

There was some consternation, then, when Stonecipher became the more visible of the two leaders, leading to "reverse takeover" talk and whisperings that Condit might be distracted by his then-dissolving marriage. (He has since married a former Boeing engineer.) Of Boeing's new direction, Condit says that people figured " 'you're a really good guy, so obviously somebody's captured you and holding you hostage in your office.' " The reality, though, was that Condit saw Stonecipher as a needed counterweight to his own operating style, which tended to focus on the view from 30,000 feet--or what Condit calls "staring out the window"--and which some had faulted as too abstract and conflict-averse. (It's not always a compliment when people say Condit would have made a great physics professor.) "I don't believe I could have done it without someone like Harry," says Condit, 59. "He can see a hole in an operating plan from 50 yards. I, for whatever reason, can see around corners."

If there was one area where Stonecipher's straight-talk-express routine was needed most, it was facing up to what had long been Boeing's terrible secret: The assembly lines of America's leading exporter were morasses of inefficiency. Airplanes were built more like customized houses, with airlines able to select from 109 shades of white paint, 20,000 galley and lavatory arrangements, and even curtained prayer rooms with devices that pointed to Mecca ("Mecca meters"). Overseeing it all was an appalling system known as "effectivity," which dated from Boeing's World War II bomber days and used a manual numbering system to keep track of an airplane's four million parts and 170 miles of wiring; changing a part on a 737's landing gear thus meant renumbering 464 pages of drawings. Yes, there had been attempts at automation, but by the early '90s they had metastasized into 450 separate computer systems, few of which could talk to one another.

Bad as that sounds, it gets worse. When a part wasn't assigned the right number--which happened on roughly 30% of drawings--a special class of worker known as an "expediter" would often be sent, sometimes by bicycle, to fetch a spare from elsewhere in the plant. This "just-in-case" inventory management meant that factory floors were covered with huge tubs of spare parts worth millions of dollars; when someone saw the bottom of the tub, a new one would be ordered. "Man, I had no idea how bad [the systems] were," says Stonecipher.

Boeing had been struggling to retire effectivity since 1994, when commercial airplanes chief Ron Woodard began replacing it with a system known by the unlovely acronym DCAC/MRM (don't ask what it stands for). DCAC was supposed to create a standardized set of customer options, scrap the 450 computer systems for four off-the-shelf software packages, and, some muttered, launch Boeing headlong into the 1980s. Yet the effort--regarded as the largest reengineering job ever undertaken--quickly fell behind schedule, partly because of resistance from workers who felt it threatened their jobs. "The inefficient processes were a cancer," says Bob Hammer, former head of the DCAC team, "but this was like chemotherapy." Condit compared the switchover to rebuilding a highway: If only you could shut the whole thing down for a while and start it up again, construction would be a lot easier.

But disastrously, traffic was only about to explode.

Airbus had been coming on strong throughout the '90s, and Boeing--led by Woodard, a hard-charging salesman who could be openly disdainful of what he regarded as Condit's flaky management theories--decided to deal Airbus a crippling blow. In an all-out bid to reach his declared goal of 67% market share, Woodard discounted planes deeply, apparently believing predictions that DCAC would shave 25% off costs by the time of their delivery. "He was almost like Khrushchev: 'We're going to bury you,' " says Eugene Bauer, a retired Boeing engineer and author of several books about the company.

Instead, it was Boeing that was buried by the onslaught of orders. The attempt to double production rates collided head-on with the DCAC changeover, and in the ensuing bedlam, the company was forced to shut down its 737 and 747 lines for 25 days in October 1997. That's when Boeing's numbers crashed: Just months after the McDonnell deal closed, it reported a $178 million annual loss.

Wall Street was livid. On Aug. 5, 1998, after a particularly wicked tongue-lashing from analysts, Condit summoned Boeing's top commercial managers to a meeting. His eyes brimming with tears, he said he would never suffer such humiliation again. Then he exited the room, leaving Stonecipher to warn the managers that if they didn't get their act together, someone else was going to be running the place.

When the managers reconvened the following week, however, and then the next, it seemed to Stonecipher that the message hadn't sunk in. "Nothing happened," he says. "I mean, just nothing. So I said, 'Phil, it's time.' " Condit summoned Woodard to his office on a Saturday, and with an it-hurts-me-to-do-this prologue, told Woodard he was replacing him with rising star Alan Mullaly. Several other members of Boeing's old guard were pushed out with him. It was the first major management shakeup in Boeing's eight-decade history.

The changes didn't stop there. Stonecipher's next target was Boeing's equally creaky financial practices, which shared much of the blame for the production screwup. The company's chief financial officer had minimal contact with Wall Street, resisted media interview requests, and was so secretive that when colleagues requested basic financial data to share with outsiders, the unsoothing response was said to be, "Tell them not to worry." (That CFO, Boyd Givan, denies saying that, but adds, "We were conservative, there's no question." He says analysts "wanted us to do their work for them" and that "it was not our practice to let our competitors know what we were doing.") Even line managers weren't trusted with cost information. One day Stonecipher walked into the company's Renton plant, where 737s and 757s are assembled, and asked, "How much money do we have in this fuselage right now?" A 747-sized silence ensued. Stonecipher complains, "If I have a question about aerodynamic properties, there will be 20 people lined up outside my door within an hour. If I have a question about cost, I'll get an answer in 30 days, and that might not be correct."

Stonecipher began clamoring for some "real time" financial data. "Here's a company that's doing better than $50 billion a year," Condit remembers him saying. "That's a billion dollars a week! And we're rolling this dude up once a quarter? Folks, there's a lot of money going by here." For starters, Stonecipher wanted the books closed within ten days of the end of each quarter, instead of the three weeks Boeing then took--a goal that struck Condit as overambitious until he talked to a company that closed its books in three days. Soon after, Condit sent out a note: The books would close in ten days, with the ultimate goal of three.

Stonecipher's biggest move, though, was to recruit a self-described "rocket ship" as the company's new CFO: Debby Hopkins, formerly of General Motors Europe. Hopkins quickly assembled a new finance team, revamped the company's coarse accounting methods, then set about schooling her colleagues in the ways of "managing for value." At a 1999 retreat in the California desert, she excitedly strode about the stage explaining such unfamiliar concepts as economic profit and return on assets, using colorful charts to demonstrate the "levers" that drive a company's valuation. Once the managers began to recognize Boeing's stock valuation as just another engineering problem, where the levers were assets and the outputs were margins, a bounty of questions poured forth. "The thirst for knowledge was high," says Hopkins, adding, "A personal trainer was needed."

This may help explain why Boeing managers can still describe the most commonplace of business concepts with the force of revelation. "We're not selling airplanes just for the fun of it. That's the big cultural change," says Seddik Belyamani, head of sales and marketing for the commercial group. "We're running it as a business." Every Thursday from 8 A.M. to 6 P.M., he and other managers huddle with Alan Mullaly to pore over a color-coded spreadsheet of the commercial business' vital signs: material costs, inventory turns, overtime, defects, and so forth. "It's like a control panel, where you're watching all the dials," says Belyamani. "Two years ago, I wouldn't have had a clue" about some of the financial concepts. Mullaly gets positively evangelical about the system, exclaiming, "This is the coolest chart!" and telling his troops, "The data will set you free."

Hopkins' models also allowed Boeing, for the first time, to generate a series of bar charts showing which of its programs were creating value and which were destroying it. The results were eye opening. Among the bars pointing in the negative direction: the 100-seat 717 jet--the sole survivor from McDonnell Douglas' Long Beach lines--and some of Boeing's parts-fabrication plants, which the company soon began making plans to offload or consolidate. (Boeing says the 717 has since crept to the positive side of the ledger.) Just as important, the analysis also helped formulate a growth plan. It led Stonecipher to telephone the heads of Lockheed and Raytheon to launch an aerospace procurement Website called Exostar. And it led Boeing into an area it had long ignored as a profit center: services.

Some 85% of the world's jetliners are Boeing built, and an estimated $74 billion a year is spent annually to keep them flying. Yet even as companies like GE and IBM showed the allure of the annuity-like revenue-streams services offer, Boeing was giving away its engineering drawings to third-party servicers for free. No longer: It's now making an across-the-board push into maintenance, modifications, financing, air-traffic control, even pilot training. "This could be big stuff," says Cai von Rumohr, an aerospace analyst at SG Cowen. Already, fully a fifth of Boeing's military revenues comes from activities like maintaining Air Force bases, and its Website for spare parts generated revenues of $400 million last year. In a sign of how far the services push might go, Boeing agreed to buy 34 used 757s from British Airways, convert them into freighters, and lease them to carrier DHL with a fixed hourly maintenance fee.

All this marked an important shift in how Boeing thought of itself. The engineering-driven company that asked "What could we build?" had made misguided forays into rail cars, computer services, windmills, and (almost) autos and eggbeaters. The new Boeing would instead start with its customers and ask, "What services can we offer them?"

The company's commitment to its new way of life was put to the test in April, when Hopkins exited after just 16 months for the CFO job at Lucent. "I think she made a mistake," says Stonecipher. "She was a contender to run the company." To replace her, management turned to a McDonnell Douglas veteran with no direct finance experience, Mike Sears. ("The appointment of Mike Sears gave us a further indication of who in the hell was controlling this company," snorts one union leader.) But Hopkins' reforms seem to have stuck: "We haven't backed away from the things Debby did at all," says Jim Albaugh, head of Boeing's space and communications group.

Indeed, to continue the conversion of its engineers into financial engineers, the company is cycling managers through an elaborate leadership center outside St. Louis that Stonecipher modeled after GE's famous Crotonville center. (It was conceived while McDonnell was still independent but finished under Boeing; Stonecipher picked out everything down to the bathroom tiles.) One two-week program features an intensive business simulation that requires everyone to play an unfamiliar role. Condit frequently shows up to play a Wall Street analyst. For some reason, he seems to relish tearing into the "CEOs" and their lousy earnings reports.

Many years ago, while Stonecipher was still at GE and Condit was an up-and-comer at Boeing, both men were at a dinner with Boeing's then-chairman, the colorful Thornton "T" Wilson. A long discussion about wing design led Stonecipher to the observation that Boeing was arrogant. Wilson, without missing a beat, shot back, "And rightly so!"

Rightly or wrongly, Boeing's old sense of exceptionalism--"We're Boeing and you're not," one old saying went--is giving way to something slightly more quotidian. As CFO Mike Sears puts it, "We need for everybody to understand that we're in business." Boeing's work force, of course, doesn't like the idea much. (Indeed, Boeing may be the only business in America where the statement "We're in business" is not an absurd truism but a politically volatile declaration; the normally platitudinous "We're managing for value" is downright explosive.) Employee attrition in Seattle is running at double the normal rate, a recent union drive in Wichita descended into ugly recriminations, and the company's own employee surveys show morale sinking: When asked to rate Boeing as a place to work compared with other companies, for instance, only 39% of respondents rated it positively, compared with 61% two years ago. "People aren't seeing the vision the company is talking about," says Charles Bofferding of the engineers union.

Instead, they see in Boeing's recent moves--the executive firings, the drive to outsource, the push into services--not the creation of a vibrant new business culture but the dismantling of one of the most successful engineering cultures of all time. "The motivator is fear and intimidation," says one unionist. "[Stonecipher] is the bully on the playground, and Condit hasn't stood up to controlling the guy." Snaps Stonecipher: "Nobody has any lack of respect for SPEEA [the engineers union] or the individuals in it. That's ridiculous."

What the engineers would like above all is to build a new airplane like Airbus' A3XX, the double-decker colossus currently being advertised with images of onboard casinos, bedrooms, and gyms. Boeing has heaped scorn on the idea, claiming there is too small a market for such a plane and predicting the development costs will far exceed Airbus' projection of $12 billion. It has adopted a wait-and-see approach to expanding its 747 by 100 seats and 31 feet in length, a decision most analysts applaud.

Not that management hasn't been trying to rev up the troops. It has unveiled a business incubator to encourage entrepreneurial employees; slogans like "A passion for affordability"; and a TV commercial designed to remind down-in-the-dumps workers that Boeing makes big rockets that go to space. "There are more exciting things going on inside Boeing than you can shake a stick at," insists Stonecipher. "We're not growing tomatoes."

Still, the fact is that the achievements Stonecipher and Condit can point to for now are mostly built around efficiency and financial soundness. And even though the DCAC switchover won't be complete until at least 2003, the fruits of the efficiency push are plainly visible on the floor of Boeing's sprawling Everett plant. Where a dozen workers used to swarm over a 747 fuselage, trimming exterior panels that didn't quite fit and adding shims to others, a handful now use a laser-guided process that requires no adjustments. The snap-together approach has allowed a vast stretch of floor to be cleared of expensive tooling and made into a makeshift basketball court. Meanwhile, in the sort of "no duh" improvement that only Boeing could trumpet as a leap forward, workers carry kits containing all the parts they'll need in a given day. The results: For the first time in Boeing's history, no one had to work overtime on Thanksgiving. And man-hours per aircraft on the new 737, which had ballooned to as many as 30,000, are down to 6,500.

To guard against these becoming mere islands of efficiency, moreover, Boeing has expanded the role of its Phantom Works unit, an R&D hothouse that Condit describes as "the technological glue that spreads across the organization." It is helping transfer practices developed on the Joint Strike Fighter in California--such as the use of futuristic "wearable" computers--to assembly lines in Washington. And Seattle managers regularly tromp through a Missouri plant where, across the road from a Waffle House, just 11 workers use Japanese "lean" techniques to build the kind of bombs dropped on Kosovo.

As for fiscal improvement, that's probably best measured by Stonecipher himself, who once joked to analysts, "You can tell how good the company is doing by weighing me." He has lost 40 pounds since February. "I've gone from a situation of saying 'Don't any of you know what the hell you're doing?' to 'You're better than you think you are,' " he says. Agrees Richard Aboulafia, an aviation consultant at the Teal Group: "This is not the sclerotic and paralyzed Boeing of two years ago."

Granted, Boeing is no GE yet. Pierre Chao of CS First Boston describes its changes as "one of the great transformation stories in corporate America," but adds that, "It's frankly ridiculous that a leading company--a duopoly player--is only earning mid-single-digit margins." According to Bill Fiala, an analyst at Edward Jones, "They're where corporate America was in the late '70s or early '80s." Yet the amount of inefficiency that can still be wrung out of the Boeing system is precisely why many analysts are predicting a lengthy earnings upswing. "There's a lot of low-hanging fruit," says Fiala. And with deliveries projected to hold steady at around 490 aircraft in both 2001 and 2002, this might be the stable platform upon which to achieve the double-digit margins the company has been promising. Southwest Airlines CEO Herb Kelleher says he's so bullish that he bought 5,000 shares of Boeing stock.

But could all this doting on shareholders go too far? If there's any business not suited to the short-term exigencies of modern capitalism, it's surely the jetliner business, with its multibillion-dollar investments and 40-year product cycles. "If Boeing had listened to the analysts" in the 1950s, author James Collins notes, "they would not have done the 707." Condit warns against the dangers of "trying to drive by looking in the rear-view mirror," and Stonecipher calls the intimations of shortsightedness "rubbish." But doesn't Condit ever worry that 20 years from now people will be writing about the big bet Boeing failed to make? Does he ever wonder what his legendary forebears, who famously scorned bean-counting, would think of a company whose stock price flashes incessantly on the desktops of its executives and the walls of its leadership center?

As it happens, "T" Wilson called Condit in the dark days of 1998--a few months before Wilson's death, it would turn out--to ask if he could pay Condit a visit. Prepared for a lecture about his failings as CEO, Condit greeted the old man with some anxiety. But when Wilson finally spoke, Condit remembers him saying, "You know what? I think your job is tougher than mine was." Wilson had barely kept the company out of bankruptcy after the launch of the 747 and had bet big again with the 757 and 767. But Wilson also understood something that others of the Boeing heritage have missed: Condit is betting the company on something big. He's betting it can learn to compete in a new world without losing its soul.

"I feel very much in the heritage of Boeing," says Condit. Someday maybe his employees will agree with him.