Randy's Journal: Archives

17 May 2006

Meet me in St. Louis

One of the things I talk about a lot is airplane performance. But for a little change of pace I'd like to talk a bit about business performance.

And I mean talk. I've nearly talked myself hoarse these past couple of days responding to questions about what Airbus might do with their A340 and A350 programs.

All this talk has been going on at Boeing's annual conference for Wall Street analysts and institutional investors this week. These folks are an important constituency. And their opinions and investment decisions certainly influence Boeing's reputation, as well as our ability - and the ability of the aviation industry - to attract funding.

Although I meet with analysts and investors several times a year, as do others at Boeing, those sessions usually focus on just a slice of our company. But the conference this week in St. Louis allowed us to give a comprehensive overview of the strategies driving all our businesses to market-leading positions. And attendees got to meet with dozens of Boeing's senior leaders, including Chairman and Chief Executive Jim McNerney.

Our messages are clear, and our position is impressive considering what things looked like after the tragic events of September 11, 2001.

• Today Boeing is well positioned in healthy markets
• We're executing our plans
• We're expecting significant earnings and revenue growth this year and next driven by the exceptional demand for our commercial airplanes

Not surprisingly, as I mentioned, I found myself engaged this week in a fair amount of discussion about what Airbus might do to make the A340 and A350 families competitive with the 777 and 787. And as I've said for a number of years now, we expect the competition to respond aggressively. Just as soon as they figure out how they can - given their heavy commitment of resources to the A380 family and the A400M project.

Of course, Wall Street continues to keep a close eye on Boeing's competitive position and on the progress of the 787 program. But what really seemed to worry the attendees - and what we're committed to avoiding - is a repeat of the late 1990s.

Back then, BCA had so many production problems - as we attempted an extremely aggressive ramp-up - that we actually had to stop building airplanes for a number of weeks to straighten everything out. Even now, thinking about it makes me shudder.

We're confident that's not going to happen this time. We put in place several production up-ticks last year. And the results look good. Our supplier base is stronger and more integrated. We've had several years of improving through "Lean" processes. And the number of deliveries is increasing much more gradually than it did back then. We're always working this because we know what can happen if we take our eye off the ball.

So, I think almost everybody left the conference with a sense that Boeing has the right strategy, excellent leadership, and a focus on executing our plans.

We're facing challenges, and there will be bumps in the road. But it seems to me that we're giving Wall Street and others reason to believe in The Boeing Company.