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| One thing that won’t change in the years
ahead is our determination to connect and protect people. We
will go on doing those two things. We do have to deal with repercussions
in the marketplace. These include a sharp and perhaps prolonged
reduction in demand for new commercial airplanes, and a shift
in defense priorities to homeland security and the need to root
out and destroy an elusive, often faceless enemy. |
How well prepared are we to meet the multiple
challenges of today’s world? First, look at how well all
of our three core businesses are performing. Second, look at
all the ways in which Boeing has changed, progressed and grown
— growing both bigger and, more important, closer together.
Third, look at some of the new and exciting things that Boeing
is doing to connect and protect people. They are the kind of
things that, we believe, will truly define the future of aerospace.
|
We want growth, and we will grow — but it will always be
disciplined, profitable growth. Everything begins with running
healthy core businesses, and then, and only then, leveraging
our strengths — to move into adjacent businesses, and to
think of pursuing new frontiers. The three Boeing core businesses
— Commercial Airplanes, Military Aircraft and Missile Systems,
and Space and Communications — are all performing better
than ever. That’s why Boeing had all-time record earnings
in 2001 — on top of record earnings in 2000. |
| Investors wonder: How long will it take the commercial
airplane market to recover? Here we are in uncharted territory.
Production rates could be depressed for as long as three or
four years. In 2002, we will deliver 380 jetliners, compared
with 527 in 2001. But we know we can deal with that, based on
recent experience. Deliveries of Boeing jetliners decreased
from 620 in 1999 to 489 in 2000. But earnings went up, not down.
And they continued to go up in 2001, when Boeing Commercial
Airplanes met a real milestone in achieving double-digit operating
margins. Even on a reduced scale, this remains a very healthy
and profitable business. Faced with a downturn, our attitude
in this business, as in any other business, is to treat every
cost as a variable, to challenge every single element of cost.
We understand lean enterprises, and we are using that understanding
to achieve some phenomenal efficiencies. That includes the introduction
of moving assembly lines for the Boeing 717 and 737, with the
747 close behind. Commercial Airplanes will be lean, aggressive
and ready to bounce back when the recovery in global air travel
occurs. |
| Revenues were up about 4.5 percent for Boeing
Military Aircraft and Missile Systems in 2001, helped by continued
growth in Aerospace Support services to military customers.
This business continues to achieve outstanding returns —
with double-digit operating margins again in 2001. Boeing is
a strong force in all segments of this market, including combat
aircraft, despite the win by Lockheed Martin in the Joint Strike
Fighter competition. The superbly capable Boeing F/A-18 Super
Hornet is scheduled to remain in production at least through
this decade. With the X-45, we have built a strong leadership
position in unmanned combat aerial vehicles, or UCAVs. While
JSF marks the end of one era in the evolution of warfare —
as perhaps the last new manned fighter — UCAVs represent
the beginning of another. The Boeing X-45 is a true combat vehicle
— and a real game-changer. It will cost only about a third
as much as a manned fighter, and it won’t put a pilot or
crew in harm’s way. The C-17 continues to evolve as the
critical centerpiece of military logistics. In a world where
rapid deployment to anywhere on the globe will define the mission,
the C-17 is the answer. And the development of a new tanker/transport
based on the 767 will provide a much-needed replacement for
the aging KC-135s. The 767 tanker has already been selected
by Italy, Japan and the United States. |
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Performance, Performance, Performance
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| Our operating margins continue to improve. |
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