President and CEO
"Aerospace Futures Alliance of Washington"
The Governor's Aerospace Summit
November 29, 2007
Thank you. It is great to be here.
And thank you, Governor Gregoire, thank you for being the host of this great event today. You have shown true leadership in creating opportunities for our industry and our state.
The last time I was with the Governor was at the end of the Apple Cup. That was a great day. And today is a great day too.
As many of you know, I've spent nearly all of my Boeing career here in Puget Sound. I know from personal experience what makes Washington State a hotbed for the aviation industry.
And I also know from personal experience the need to ensure a competitive advantage in the marketplace. And that's what we are all about today. Ensuring our future leadership position in a world that continues to be more and more competitive.
And whether you're making landing systems or small planes in Yakima, building UAVs in Clark Country, producing powder coating in Monroe, unloading containers filled with component parts at the Port of Tacoma -- or working on the 737 line in Renton -- we all have the same stake in the future of aerospace in this State.
Are today's challenges more complex than those faced 30 or 40 years ago when my Dad was a test pilot at Boeing? Perhaps, but there were awfully big challenges back then as well.
Aviation has never been for the weak of heart -- it has been for the bold... those who dared to dream what many thought were impossible. That is the legacy we all share today, as we look to the future.
It is indeed a wonderful and immense legacy, characterized by 650 companies accounting for more than 36 billion dollars of business. We account for 22.4 billion in exports, which is two-thirds of the state's total.
And we employee more than 110,000 people with an average wage of more than 83,000 dollars a year. It is a wonderful industry to be a part of, but it is an industry we can never take for granted.
Today, in the large commercial airplane business, we face an aggressive competitor -- and other international companies have plans to enter our market.
That means every day, we at Boeing must do things better tomorrow than we are doing them today... to better serve our customers, and to provide more value to our shareholders, our employees and our communities in addition to our customers.
No matter how large or small your business is, everyone in this room and every business in the State of Washington are experiencing the same issues -- fierce competition from all over the country -- and all over the globe.
That's why the Aviation Futures Alliance -- and today's Governor's Summit -- is so important. Only by discussing our challenges -- and by implementing solutions to address them -- are we going to continue to have the kind of robust aerospace industry that has made our State of Washington a great place to live, work and raise our families.
All of our answers and achievements must rest on the foundation of a comprehensive strategy -- built through an industry-government partnership -- that will keep the State of Washington competitive in the global aviation marketplace.
To remain competitive -- and to retain and strengthen the competitive position of aerospace in Washington State -- we need to continue our focus on some key objectives, including our work on the overall tax burden borne by business; education and workforce training and retention; affordable healthcare; and transportation.
And that's why we're here today. To discuss these issues. Here are some of my thoughts as we begin the day....
Our workers compensation system needs a careful look. Some question if it is effectively serving those who need it.
Our tax systems seem to work fine for the established businesses, but can the same be said for new businesses entering the marketplace?
Our education, workforce training and retention systems have received great leadership from the Governor and Legislature, and we have seen important new investments -- especially in early learning and higher education. However, all of us have some heavy lifting to do if we really want to see all of our children reach their full potential.
Healthcare costs are eating into our state's budget just like they are eating into the budget of every organization that attempts to provide healthcare coverage for their employees. We can work together to improve quality, transparency and effectiveness of treatment... and tackle the trend of continual cost increases.
Finally there is the issue of transportation. We clearly failed to persuade the voters that the RTID investment plan was worth their tax dollars, despite the efforts and support of many people and businesses in this room and many outside this room.
Those of us in the aerospace business know that if we do not invest for tomorrow, we will be left behind by those that did. We must continue the journey of supporting our elected officials in wise transportation infrastructure investments.
If we keep working at making progress on these issues, we'll continue in the tradition of creating a business climate here in the State of Washington that works for all of us.
Will it be easy? Of course not. But as we have often said, aviation is not for those who set the bar at an easy, low level. Rather, we are inspired by reaching beyond our grasp. We are driven by meeting challenges that are hard.
We have often said that fundamental breakthroughs are never easy. That was driven home to us earlier this fall when we announced a six-month delay on first flight of the 787. We are disappointed about the schedule changes, and most of all we are disappointed that have let down our customers.
However, we remain confident in the design and business model of the 787 -- and the fundamental innovation and technologies behind it.
Our approach to this program has led to the introduction of an airplane that has sold more at this stage than any other airplane in history. And the reason for this success has been the combination of our global business model, a truly innovative product, and the hard work of everyone on the 787 team.
Are there lessons to be learned? Of course -- just like there are on any leading-edge effort. But even though there are lessons to be learned, we believe these lessons will make the program stronger for our customers, our shareholders and ourselves.
And there is learning for us in how to better lead a global supply chain effort. That effort, I'm proud to say, is led by some of the best managers, engineers, technicians and machinists in the aerospace world, from our Commercial Airplanes home in Seattle.
Of course, I'm often asked what our learnings will mean for the next airplane we build. The fact is that it's too early to tell exactly how the 787 experience will affect our future planning.
Our organization's focus is on delivering the 787 -- and on meeting our customers' expectations on our other development programs... as well as delivering on our current products and services.
That is the promise and the challenge of our journey in 2008. We are focused on execution and competitiveness, because they are critically important to achieving our growth and productivity objectives.
And I believe what is true for Boeing is true for all of us as we all strive for growth and productivity. If we all bring our innovation, our dedication and our hard work to our current task, we'll continue to grow and build our State's aerospace industry.
The stakes are high. It is important that we come together in a forum like this, and I am very gratified to have the opportunity to participate. But most of all I'm gratified by the attendance of so many great companies, entrepreneurs and innovators here today.
Together, we can ensure that we have an industry -- and a State -- that continues to soar.
Thank you again, Governor -- and the Alliance -- for bringing us all together today.