New Strategic Business Alignment at a Glance

California

An additional Next-Generation 737 final assembly line opens in Long Beach in the fourth quarter of 1998. Initially, the new line will be used primarily for producing Boeing Business Jets. Production rate will increase gradually to three airplanes per month by the second quarter of 1999, with the addition of selected Next-Generation 737s for airline customers. Later that year, the new line may begin assembling 737-700Cs (Convertible Freighters). To reflect this change, Douglas Products Division is renamed Long Beach Division. Production of the 717 jetliner continues at the Long Beach Division.

Headquarters for ISDS Information & Communications Systems business unit transfers to Anaheim from Kent, Wash. This move is being made because the majority of Information & Communications Systems business is located in California.

Program management for National Missile Defense and Ground-Based Interceptors moves from Downey to Anaheim.

European Aircraft Modification work moves from Anaheim to Long Beach. Phantom Works technology groups in Long Beach will share engineering management with the major ISDS business unit at that site.

Reusable Space Systems manufacturing moves from Downey to Palmdale, and the remainder of its activities relocates to Huntington Beach. This allows Reusable Space Systems and Expendable Launch Systems to be colocated in Huntington Beach.

Integrated Defense System activities move from Huntington Beach to Seal Beach, with the exception of the Surveillance & Targeting Systems demostration activities, which move to Anaheim.

Teledesic program management transfers to Seal Beach from Washington. Program management for satellites transfers from Downey to Seal Beach.

Multiple laboratories will be closed or transferred as part of companywide consolidation.

This announcement includes an additional reduction of 1.3 million square feet of facilities.

Missouri

St. Louis becomes the single location for production and program management of Boeing fighter aircraft. The Joint Strike Fighter will be built in St. Louis, provided the program's affordability goals are satisfied. Management of the JSF program will remain in the Seattle area at least through the concept demonstration phase of program. In addition, F-22 manufacturing will remain in Seattle, although the company continues studying other options for the program.

To increase efficiency and lower costs, St. Louis will consolidate staffing within its fighter production programs, and Phantom Works technology groups will share engineering management with the host business unit.

Washington

Washington continues as the headquarters for The Boeing Company and its three operating groups. Boeing Commercial Airplane Group (BCAG) remains based in Renton; Information, Space & Defense Systems (ISDS) remains based in Kent; and Shared Services Group headquarters remains in Bellevue.

Airplane production capability in Renton is supplemented by establishing an additional Next-Generation 737 final assembly line in Long Beach, Calif. Initially, the new line will be used primarily for Boeing Business Jets, although selected Next-Generation 737s for airline customers will be assembled there by the second quarter of 1999. Later that year, 737-700Cs may also be assembled there.

Headquarters for ISDS Information & Communications Systems business unit transfers from Kent to Anaheim, Calif. Many support functions for this business unit will remain at the Kent Space Center West complex. The headquarters is transferring because the majority of Information & Communications Systems business is located in California.

Program management of Teledesic work transfers to Seal Beach, Calif.

A satellite design support center will be located in Kent.

Program management of the Joint Strike Fighter (JSF) program will remain in the Seattle area at least through the concept demonstration phase of program. The production for the JSF will be based in St. Louis, provided the program's affordability goals are met. Manufacturing for the F-22 will remain in Seattle, although the company continues studying other options for the program.

Multiple laboratories will be closed or transferred as part of a companywide consolidation.

An additional 1.7 million square feet of space will be vacated.