Boeing

The Boeing Company {{nyse|BA}} is the leading American aircraft and aerospace manufacturer, headquartered in Chicago, Illinois, with its largest production facilities in Everett, Washington, near Seattle, Washington. It is also the second-largest defense contractor in the world http://www.defensenews.com/content/features/2005chart1.html, the second-largest civil aircraft manufacturer, after Airbus, and the largest exporter in the United States. Boeing's stock is a component of the Dow Jones Industrial Average.

Recent history

After several decades of numerous successes, Boeing lost ground to Europe's Airbus and subsequently lost its leadership of the market in 2003. It responded by running a huge advertising campaign to promote its new motto, "Forever New Frontiers," and rehabilitate its image. Hopes are now focused on the newly-launched 787 as a platform of total fleet rejuvenation.

Related Topics:
2003 - Advertising - 787

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On October 10 2001, against fierce competition for the contract to the JSF, Boeing lost to rival Lockheed Martin in the multi-billion dollar contract. Boeing's competitor was the X-32, which lost out to Lockheed's F-35 entrant. The X-32 may have been hampered by the requirement for a redesign after several flaws were found in the original concept.

Related Topics:
October 10 - 2001 - JSF - Lockheed Martin - X-32 - F-35

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On August 2 2005 Boeing sold its Rocketdyne rocket engine division to Pratt & Whitney.

Related Topics:
August 2 - 2005 - Rocketdyne - Pratt & Whitney

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In May 2005 Boeing announced its intent form a new company, United Launch Alliance with its competitor Lockheed Martin. The new company will be the sole provider of rocket launch services to the US government. The joint venture is expected to be gain regulatory approval and be complete near the end of 2005.

Related Topics:
May - 2005 - United Launch Alliance - Lockheed Martin

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"Unethical conduct"

In May 2003 the US Air Force announced it would lease 100 KC-767 tankers to replace the oldest 136 of its KC-135s. The 10 year lease would give the USAF the option to purchase the aircraft at the end of the contract. In September 2003, responding to critics who argued that the lease was vastly more expensive than an outright purchase, the DOD announced a revised lease of 74 aircraft and purchase of 26.

Related Topics:
US Air Force - KC-767 - KC-135

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In December 2003 the Pentagon announced the project was to be frozen while allegations of corruption by one if its former procurement staffers, Darleen Druyun (who had moved to Boeing in January) was investigated. The fallout of this resulted in the resignation of Boeing CEO Philip M. Condit and the termination of CFO Michael M. Sears. Harry Stonecipher, former McDonnell Douglas CEO, replaced Condit.

Related Topics:
Darleen Druyun - CEO - Philip M. Condit - CFO - Michael M. Sears - Harry Stonecipher

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Druyun pleaded guilty to inflating the price of the contract to favor her future employer and to passing information on the competing Airbus A330 MRTT bid (from EADS). In October 2004 she was sentenced to nine months in jail for corruption, fined $5,000, given three years of supervised release and 150 hours of community service.

Related Topics:
Airbus A330 MRTT - EADS

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In March 2005 the Boeing board forced President and CEO Harry Stonecipher to resign. Boeing said an internal investigation revealed a "consensual" relationship between Stonecipher and a female executive that “violated the company's Code of Conduct” and "would impair his ability to lead the company." James A. Bell served as interim CEO (in addition to his normal duties as Boeing's CFO) until the appointment of Jim McNerney as the new Chairman, President, and CEO on June 30, 2005.

Related Topics:
March 2005 - President - James A. Bell - CFO - Jim McNerney - Chairman - June 30 - 2005

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Industrial espionage

In June 2003 Lockheed Martin sued Boeing alleging the company had resorted to industrial espionage in 1998 to win the Evolved Expendable Launch Vehicle (EELV) competition. Lockheed alleged that a former employee; Kenneth Branch, who went to work for McDonnell Douglas and Boeing, passed 25,000 proprietary documents to his new employers. Lockheed argued that these documents allowed Boeing to win 21 of the 28 tendered military satellite launches.

Related Topics:
Industrial espionage - Evolved Expendable Launch Vehicle

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In July 2003 Boeing was penalized, with the Pentagon stripping $1 billion worth of contracts away from the company and awarding them to Lockheed. Furthermore, the company was forbidden to bid for rocket contracts for a 20 month period which expired in March 2005.

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In early September 2005 it was reported that Boeing was negotiating a settlement with the U.S. Department of Justice in which it would pay up to $500 million to cover this and the Darleen Druyun scandal. http://www.bizjournals.com/stlouis/stories/2005/09/05/daily53.html?from_rss=1

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Airbus subsidy dispute

In October 2004, Boeing filed a complaint at the World Trade Organization, claiming that Airbus had violated a 1992 bilateral accord when it received what Boeing deems as "unfair" subsidies from the European Union. Airbus retaliated by filing another complaint, contesting that Boeing had also violated the accord when it received tax breaks from the U.S. Government. Moreover, the E.U. also complained that the investment subsidies from Japanese airlines violated the accord.

Related Topics:
October - 2004 - World Trade Organization - European Union

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In January 11, the two parties (Boeing and Airbus) agreed that they would attempt to find a solution to the dispute outside of the WTO.

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However, in June 2005, Boeing and the United States government reopened the trade dispute with the WTO, claiming that Airbus had received illegal subsidies from European governments. Airbus has also retaliated against Boeing, reopening the dispute and also accusing Boeing of receiving subsidies from the US government.

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Product developments

Finally, Boeing achieved several consecutive successes, beginning with the formal launch of the 787 for delivery to All Nippon Airways and Air New Zealand. Currently, the 787 orderbook stands at over 250 airframes with orders from Northwest Airlines, Continental Airlines, Japan Airlines, Icelandair and a conglomeration of Chinese carriers.

Related Topics:
All Nippon Airways - Air New Zealand - Northwest Airlines - Continental Airlines - Japan Airlines - Icelandair

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Boeing also received the launch contract from the US Navy for the Multimission Maritime Aircraft, an anti-submarine warfare patrol aircraft. Several orders for the Wedgetail AEW&C aircraft are expected as well.

Related Topics:
US Navy - Multimission Maritime Aircraft - Anti-submarine warfare - Wedgetail

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In November 2004, Boeing announced it will offer a cargo version of the popular 777 model. The freighter will be based on the 777-200LR. Customers rumored to be interested include Lufthansa, EVA Airways, ILFC, GECAS and Emirates.

Related Topics:
November - 2004 - Lufthansa - EVA Airways - ILFC - GECAS - Emirates

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Expectations for the year 2005 ran high for Boeing. Although Boeing lost to Airbus in total orders at a recent Paris airshow, it continued to impress analysts with orders for its 787 Dreamliner, which outnumber those for Airbus's revamped A350, and an overall rebound in orders that promised to allow Boeing to outproduce Airbus in the near future. Boeing was also believed to have received strong expressions of interest for its 747 Advanced, a stretched version of its 747-400. The 747 would incorporate new engines and other design advancements associated with the 787. Boeing has not officially announced that it will commence production of the 747 Advanced.

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Boeing's most successful new aircraft measured by recent orders remained the 737, for which it received orders totaling 387 new units in 2005 as reported on August 7. The 737-900 is the latest version of the venerable craft offered by Boeing and is the largest model of the 737 line at a length of 138 feet.

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The 777-200 Worldliner embarked on a well-received global demonstration tour in the second half of 2005, showing off its capacity to fly farther than any other commercial aircraft.

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Realizing that increasing numbers of passengers have become reliant on their computers to stay in touch, Boeing is offering Connexion by Boeing, an Internet connectivity service that promises air travelers unprecedented access to the World Wide Web. The company debuted the product to journalists in 2005, receiving generally favorable reviews.

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