| The Boeing Company (NYSE: BA, TYO: 7661 | | | | she was sentenced to nine months in jail |
| ) is an aerospace and defense | | | | for corruption, fined $5,000, given |
| corporation headquartered in Chicago, | | | | three years of supervised release and |
| Illinois. Boeing is the largest global | | | | 150 hours of community service. |
| aircraft manufacturer by revenue[1] and | | | | In March 2005 the Boeing board forced |
| the second-largest defense contractor in | | | | President and CEO Harry Stonecipher to |
| the world.[2] In 2005, the company was | | | | resign. Boeing said an internal |
| the world’s largest civil aircraft | | | | investigation revealed a |
| manufacturer in terms of value (with 49% | | | | “consensual” relationship between |
| of orders and 45% of deliveries), | | | | Stonecipher and a female executive that |
| overtaking Airbus for the first time | | | | was “inconsistent with Boeing's Code |
| since 2000. The largest exporter in the | | | | of Conduct” and “would impair his |
| United States, Boeing’s stock is a | | | | ability to lead the company”.[4] James |
| component of the Dow Jones Industrial | | | | A. Bell served as interim CEO (in |
| Average. | | | | addition to his normal duties as |
| In recent years Boeing has faced an | | | | Boeing’s CFO) until the appointment of |
| increasingly competitive Airbus, which | | | | Jim McNerney as the new Chairman, |
| offers some commonality between models | | | | President, and CEO on June 30, 2005. |
| (reducing maintenance and training | | | | Industrial espionage |
| costs) and the latest fly-by-wire | | | | In June 2003 Lockheed Martin sued Boeing |
| technology. From the 1970s Airbus has | | | | alleging the company had resorted to |
| increased its family of aircraft to the | | | | industrial espionage in 1998 to win the |
| point where they can now offer an | | | | Evolved Expendable Launch Vehicle (EELV) |
| aircraft in almost every class Boeing | | | | competition. Lockheed alleged that |
| does. Indeed, Airbus is now competing in | | | | former employee Kenneth Branch, who went |
| markets that Boeing once had a monopoly | | | | to work for McDonnell Douglas and |
| over, e.g. the A320 has been selected by | | | | Boeing, passed 25,000 proprietary |
| several low-cost operators (the aircraft | | | | documents to his new employers. Lockheed |
| used by these airlines has traditionally | | | | argued that these documents allowed |
| been the 737) and the very large | | | | Boeing to win 21 of the 28 tendered |
| aircraft market, the A380. The 747 has | | | | military satellite launches. |
| suffered by competing with Boeing’s | | | | In July 2003 Boeing was penalized, with |
| 777-300 series. | | | | the Pentagon stripping $1 billion worth |
| Currently, Boeing is planning to | | | | of contracts away from the company and |
| introduce a new aircraft; the 787 | | | | awarding them to Lockheed. Furthermore, |
| “Dreamliner”, and four new aircraft | | | | the company was forbidden to bid for |
| variants; the ultra-long-range | | | | rocket contracts for a twenty-month |
| 777-200LR, the 737-900ER, 737-700ER and | | | | period which expired in March 2005. |
| the 747-8. The 787 was originally known | | | | In early September 2005 it was reported |
| by the developmental designator 7E7. The | | | | that Boeing was negotiating a settlement |
| Boeing 777-200LR has the longest range | | | | with the U.S. Department of Justice in |
| of any commercial aircraft, and is the | | | | which it would pay up to $500 million to |
| first airliner to able to fly halfway | | | | cover this and the Darleen Druyun |
| across the planet with a commercially | | | | scandal.[5] |
| viable payload, and holds the world | | | | Airbus subsidy dispute |
| record for the longest flight by a | | | | In October 2004, Boeing filed a |
| commercial airliner at 21,601km. The | | | | complaint at the World Trade |
| 777-200LR has completed flight-testing | | | | Organization, claiming that Airbus had |
| and certification, with the first | | | | violated a 1992 bilateral accord when it |
| aircraft delivered to Pakistan | | | | received what Boeing deems as |
| International Airlines (PIA) in 2006. | | | | “unfair” subsidies from several |
| The 737-900ER, previously designated as | | | | European governments. Airbus retaliated |
| the 737-900X is an improvement to the | | | | by filing another complaint, contesting |
| 737-900. The current 737-900 model has | | | | that Boeing had also violated the accord |
| limited range, and is limited in | | | | when it received tax breaks from the |
| capacity such that it can not be flown | | | | U.S. Government. Moreover, the E.U. also |
| in a high-density configuration, rather | | | | complained that the investment subsidies |
| requiring a solidly two-class | | | | from Japanese airlines violated the |
| configuration. The 737-900ER will extend | | | | accord. |
| the range of the 737-900ER to a similar | | | | On January 11, 2005 the two parties |
| range as the successful 737-800 with the | | | | (Boeing and Airbus) agreed that they |
| capability to fly more passengers, due | | | | would attempt to find a solution to the |
| to the addition of two extra emergency | | | | dispute outside of the WTO. |
| exits. | | | | However, in June 2005, Boeing and the |
| In 2004, Boeing cancelled production of | | | | United States government reopened the |
| the 757 after 1055 were produced, with | | | | trade dispute with the WTO, claiming |
| the last aircraft going to Shanghai | | | | that Airbus had received illegal |
| Airlines, in China. More advanced, | | | | subsidies from European governments. |
| stretched versions of the 737 were | | | | Airbus has also retaliated against |
| beginning to compete against the 757, | | | | Boeing, reopening the dispute and also |
| and the new 787-3 will fill some of the | | | | accusing Boeing of receiving subsidies |
| top end of the 757 market. Boeing also | | | | from the US government. |
| soon canceled the production of 717 due | | | | Product developments |
| to slow sales, and the 767 is likely to | | | | Finally, Boeing achieved several |
| cease production soon. However, if | | | | consecutive successes, beginning with |
| Boeing manages to win the contract for | | | | the formal launch of the 787 for |
| new USAF tankers, the 767 program might | | | | delivery to All Nippon Airways and Air |
| be saved. Boeing also is building an | | | | New Zealand. Currently, the 787 |
| advanced version of the 747, the 747-8, | | | | orderbook stands at over 404 airplanes. |
| which will compete more closely with the | | | | Boeing also received the launch contract |
| Airbus A380. The aircraft was informally | | | | from the US Navy for the Multimission |
| announced at the 2005 Paris Airshow. The | | | | Maritime Aircraft, an anti-submarine |
| 747-8 is stretched and will offer higher | | | | warfare patrol aircraft. Several orders |
| efficiency and longer range. The | | | | for the Wedgetail AEW&C airplanes are |
| passenger and cargo versions will be | | | | expected as well. |
| 12ft and 18ft longer than current | | | | In November 2004, Boeing announced it |
| 747-400 versions. | | | | will offer a cargo version of the |
| On August 21 2006 Sky News alleged that | | | | popular 777 model, based on the |
| Boeing's Next Generation 737s built from | | | | 777-200LR. Boeing launched the Boeing |
| 1994 to 2002 contained defective parts. | | | | 777 Freighter in May 2005 with an order |
| The report stated that various parts of | | | | from Air France. Other customers rumored |
| the airframe produced by Ducommun were | | | | to be interested include Lufthansa, EVA |
| found to be defective by Boeing | | | | Airways, ILFC, GECAS, Air Canada and |
| employees but that Boeing refused to | | | | Emirates. |
| take action. Boeing said that the | | | | Boeing has achieved above projected |
| allegations were "without merit". | | | | orders for its 787 Dreamliner, |
| Boeing continues to serve as the prime | | | | outselling the rival Airbus A350. A |
| contractor on the International Space | | | | large blow to Airbus came as Emirates |
| Station and has built several of the | | | | Airlines president Tim Clark stated that |
| major components. | | | | his airline must be convinced that the |
| Recent history | | | | 250 to 290-seat A350 would not repeat |
| After several decades of numerous | | | | the “misses” by Airbus in |
| successes, Boeing lost ground to | | | | performance and delivery. Emirates has |
| Europe’s Airbus and subsequently lost | | | | held off ordering either airplane as it |
| its position as market leader in 2003. | | | | tries to convince Boeing to build a |
| Multiple Boeing projects were pursued | | | | larger version of the 787, the 787-10 - |
| and then cancelled. The Boeing Sonic | | | | which is the airline’s preferred |
| Cruiser is among these projects. The | | | | option. Air Canada also dealt Airbus a |
| Boeing Sonic Cruiser was launched in | | | | blow by replacing its entire A330 and |
| 2001 along with a new advertising | | | | A340 fleet with 96 Boeing 777s and 787s. |
| campaign to promote its new motto, | | | | Boeing officially announced in November |
| “Forever New Frontiers”, and | | | | 2005 that it would produce a larger |
| rehabilitate its image. Boeing is now | | | | version of the 747, the 747-8, in two |
| focused on the newly-launched 787 as a | | | | models, commencing with a model for two |
| platform of total fleet rejuvenation, | | | | cargo carriers with firm orders for the |
| which has benefited from strong sales | | | | aircraft. The second model, slightly |
| success at the expense of Airbus' | | | | shorter than the cargo version but still |
| competing offerings. | | | | longer than the 747-400, dubbed the |
| On October 10, 2001, against fierce | | | | Intercontinental, would be produced for |
| competition for the contract to the JSF, | | | | passenger airlines that Boeing expected |
| Boeing lost to rival Lockheed Martin in | | | | would place orders in the near future. |
| the multi-billion dollar contract. | | | | Both models of the 747-8 would feature a |
| Boeing’s plane was the X-32, which | | | | lengthened fuselage, new, advanced |
| lost out to Lockheed’s F-35 entrant. | | | | engines and wings, and the incorporation |
| The X-32 may have been hampered by the | | | | of other technologies developed for the |
| requirement for a redesign after several | | | | 787. |
| flaws were found in the original | | | | Boeing’s most successful new aircraft |
| concept. | | | | measured by recent orders remained the |
| In Early May 2004 Boeing announced that | | | | 737, for which it received orders |
| the 717, the last civil aircraft to be | | | | totaling 387 new units in 2005 as |
| designed by McDonnell-Douglas, would | | | | reported on August 7. The 737-900ER is |
| cease production by 2006, leaving the | | | | the latest version of the venerable |
| C-17 military transport as the last | | | | plane offered by Boeing and is the |
| McDonnell-Douglas airplane design still | | | | largest model of the 737 line at a |
| in production. | | | | length of 138 feet. |
| On August 2, 2005 Boeing sold its | | | | The 777-200LR Worldliner embarked on a |
| Rocketdyne rocket engine division to | | | | well-received global demonstration tour |
| Pratt & Whitney. | | | | in the second half of 2005, showing off |
| In May 2005, Boeing announced its intent | | | | its capacity to fly farther than any |
| to form a new company, United Launch | | | | other commercial aircraft. On November |
| Alliance with its competitor Lockheed | | | | 10, 2005, the 777-200LR set a world |
| Martin. The new company will be the sole | | | | record for the longest non-stop flight. |
| provider of rocket launch services to | | | | The plane, which departed from Hong Kong |
| the US government. The joint venture is | | | | traveling to London, took a longer |
| expected to gain regulatory approval and | | | | route, which included flying over the |
| be complete near the end of 2005. | | | | U.S. It flew 11,664 nautical miles |
| On May 1, 2006 Boeing announced that it | | | | (21,601km) during its 22-hour 42-minute |
| had reached a definitive merger | | | | flight. |
| agreement to purchase Dallas, Tx based | | | | Realizing that increasing numbers of |
| Aviall, Inc. for $1.7 Billion and retain | | | | passengers have become reliant on their |
| $350 Million in debt. Aviall, Inc. and | | | | computers to stay in touch, Boeing |
| its subsidiares, Aviall Services, Inc. | | | | introduced Connexion by Boeing, a |
| and ILS will become a wholly owned | | | | satellite based Internet connectivity |
| subsidiary of Boeing Commercial Aviation | | | | service that promised air travelers |
| Services (BCAS). Aviall's CEO, Paul E. | | | | unprecedented access to the World Wide |
| Fulchino will report to BCAS' General | | | | Web. The company debuted the product to |
| Manager/Vice President, Lou Mancini. The | | | | journalists in 2005, receiving generally |
| merger agreeement was approved by | | | | favorable reviews. However, facing |
| Aviall's shareholders on September 19 | | | | competition from cheaper options, such |
| and final closing commenced on September | | | | as cellular networks, it proved too |
| 20, 2006 | | | | difficult to sell to most airlines. In |
| Unethical conduct | | | | August 2006, after a short and |
| In May 2003 the US Air Force announced | | | | unsuccessful search for a buyer for the |
| it would lease 100 KC-767 tankers to | | | | business, Boeing chose to discontinue |
| replace the oldest 136 of its KC-135s. | | | | the service. |
| The 10 year lease would give the USAF | | | | Future Concepts |
| the option to purchase the aircraft at | | | | In May 2006, four concept designs being |
| the end of the contract. In September | | | | examined by Boeing were outlined in the |
| 2003, responding to critics who argued | | | | Seattle Times. Codenamed after the |
| that the lease was vastly more expensive | | | | well-known Muppets (the design team is |
| than an outright purchase, the DOD | | | | known as the Green Team), the designs |
| announced a revised lease of 74 aircraft | | | | concentrated primarily on reducing fuel |
| and purchase of 26. | | | | usage. All four designs illustrated |
| In December 2003 the Pentagon announced | | | | rear-engine layouts. "Fozzie" employs |
| the project was to be frozen while | | | | open rotors and would offer a lower |
| allegations of corruption by one if its | | | | cruising speed. "Beaker" has very thin, |
| former procurement staffers, Darleen | | | | wide wings, with the ability to |
| Druyun (who had moved to Boeing in | | | | partially fold-up to facilitate easier |
| January) was investigated. The fallout | | | | taxiing. "Kermit Kruiser" has forward |
| of this resulted in the resignation of | | | | swept wings over which are positioned |
| Boeing CEO Philip M. Condit and the | | | | its engines, with the aim of lowering |
| termination of CFO Michael M. Sears. | | | | noise below due to the reflection of the |
| Harry Stonecipher, former McDonnell | | | | exhaust signature upward. "Honeydew" |
| Douglas CEO and Boeing COO, replaced | | | | with its delta wing design, resembles a |
| Condit. | | | | marriage of the flying wing concept and |
| Druyun pleaded guilty to inflating the | | | | the traditional tube fuselage. As with |
| price of the contract to favor her | | | | most concepts, these designs are only in |
| future employer and to passing | | | | the exploratory stage intended to help |
| information on the competing Airbus A330 | | | | Boeing evaluate the potentials of such |
| MRTT bid (from EADS). In October 2004 | | | | radical technologies. |