PROPOSAL 4

SHAREHOLDER PROPOSAL
ON DOING BUSINESS WITH CHINA

Four shareholders have advised the Company that they intend to present the following resolution at the Annual Meeting. In accordance with applicable proxy regulations, the proposed resolution and supporting statement, for which the Board of Directors and the Company accept no responsibility, are set forth below. Approval of this proposal would require the affirmative vote of a majority of the outstanding shares of common stock present in person or by proxy and entitled to vote at the Annual Meeting.

Shareholder Resolution

WHEREAS, The Boeing Company successfully lobbied the Clinton Administration to grant Most Favored Nation status to the Peoples' Republic of China in a way that "delinks" human rights from MFN status;

— In arguing against such linkage, President Clinton stated (1994) that "constructive engagement" in China through business contacts would best ensure human rights;

— In 1997 President Clinton admitted his "constructive engagement" policy had not produced positive results regarding human rights in China. His Administration's annual report on human rights noted of China that its "economic pragmatism and increasingly robust ties of trade and commerce with the United States" has not prevented or ameliorated "widespread and well-documented human rights abuses;"

— The New York Times reported (06/09/96) Boeing is "China's most valuable lobbyist" and has co-produced "a video that is a remarkably dewy-eyed depiction of China — no repression of dissidents, no sales of automatic weapons to gangs in Los Angeles, no nuclear proliferation, but plenty of Chinese enjoying American goods;"

— U.S. corporations doing business with China and Tibet provide financial support and legitimization for the Chinese government's rule there;

— Congressional resolutions were introduced into both houses calling for certain principles to be followed by U.S. nationals engaged in commercial activities in China and Tibet. Human Rights Watch created parallel principles;

RESOLVED: shareholders request the Board to adopt, by January, 1999, basic human rights criteria for its business operations in and/or with the Peoples' Republic of China. Requesting shareholders shall be notified of these principles and how Boeing intends to implement them by July 1, 1999.

Proponents' Supporting Statement

We ask the board to consider the following in creating these principles:

  1. Not to use goods or products manufactured by forced labor in the People's Republic of China and Tibet;
  2. To safeguard Chinese and Tibetan employees prone to dismissal based upon their involvement in non-violent demonstrations, past records of arrests or internal exile for non-violent protest or membership in unofficial organizations committed to non-violence;
  3. To ensure that production methods do not unnecessarily risk harm to the surrounding environment;
  4. To strive to use independent businesses when looking for potential business partners in China and Tibet;
  5. To prohibit any military presence on industrial cooperation project premises;
  6. To ensure freedom of association and assembly among employees;
  7. To press Chinese authorities to list those arrested in the last three years, to end incommunicado detention, and for access to international observers to places of detention;
  8. To discourage or undertake to prevent compulsory political indoctrination programs from occurring on company premises in China and Tibet;
  9. To ensure freedom of expression.

In a New York Times piece, A.M. Rosenthal stated: "the Chinese Communists are creating a system in which controlled capitalism and tyranny work together . . . But if American businesses do not care that their country and companies help finance torture cells, what can an individual do about it? Use the stockholder's right to demand a rights code for every U.S. business investing in China." If you agree, please vote "yes."

Board of Directors' Response

The Boeing Company is a leading aerospace firm and is committed to being one of the premier industrial companies in the world. We will continue our history of operating with integrity with high business principles, bringing commitment to the rule of law and respect for employees and their rights of association and assembly wherever we operate in the world.

While the Board of Directors is not insensitive to individual rights in China, the United States should continue to recognize the interrelationships among economic growth, social progress and political stability in determining the welfare of the Chinese people. We believe that the lives of hundreds of millions of Chinese have improved dramatically under economic reform and the engagement of governments and international companies. Indeed, it is our experience that significant good is accomplished by bringing countries into the mainstream of open-market trading and economic progress. We support granting China permanent "Most Favored Nation" status, which is not something special, but normal trading rights. China's accession into the World Trade Organization and normalized trade with China will also expand engagement by the worldwide community and the United States in China, thereby enhancing the opportunities to further the rule of law and an open society for the Chinese people.

Secretary of State Madeleine Albright articulated the Administration's policy in clear terms during her confirmation hearing before the Foreign Relations Committee in 1997: "Our goal is to expand areas of cooperation, reduce the potential for misunderstandings and encourage China's full emergence as a responsible member of the international community." The Board of Directors supports this policy and believes that working for enhanced individual freedom in a transforming China is a basic goal best served by broader political and economic engagement with China.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE AGAINST PROPOSAL 4.

Previous | Next