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1998 Speeches

Harry C. Stonecipher

President and COO

The Boeing Company

"Address to Shareholders"

St. Louis, MO

April 27, 1998

It is great to be back in St. Louis and to see so many familiar faces.

I have vivid memories of the annual meeting that was held in this same room a year ago . . . and that was, of course, the last annual meeting of McDonnell Douglas as an independent company.

Speaking then as the chief executive of McDonnell Douglas, I told you how much I liked the idea of the merger that would make our company a part of The Boeing Company. Today, speaking as President of The Boeing Company, I am here to tell you: I still like it. I like it more than ever.

In the bringing together of heritage Rockwell, heritage McDonnell Douglas and heritage Boeing, I believe we have created an awesome force. If you look at us and compare us with other aerospace companies, you see an unparalleled array of strengths and capabilities.

We have the markets . . . we have the products . . . and we have the talents . . . to be a great company.

The possibilities for synergy within our different aerospace businesses are almost unlimited. We learn things every day in defense work that can make us stronger in our commercial aircraft business. . . and in defense contracting we are seeing a major push for adoption of commercial practices and commercially developed technologies. We also have major assets and a wealth of knowledge in space products that can and will strengthen our ability to serve both commercial and military customers.

Who, if anyone, is going to stop us? Certainly, it won't be Airbus . . . It won't be Lockheed Martin -- with or without Northrop Grumman . . . And it won't be Raytheon.

The biggest threat to our future success is a failure to execute inside. Delivering airplanes on time . . . that's what it's all about. That and driving costs out of our system so we make good returns on the money that all of you have invested in this company. That is what we are concentrating on right now. We are working the cost side hard -- across all of our businesses.

We have changed our compensation policies in order to align the interests of the top 2,000 executives in our company directly with you -- the Boeing shareholders. We have done that by making long-term incentive payments conditional upon at least a 10 percent compounded annual increase in shareholder value over the next five year period.

Phil Condit has pointed the way, and we are going to move the company in that direction.

Let me leave you with one thought. It is the same thing I told a group of financial analysts in California last week: Don't bet against The Boeing Company. It's a bad bet.