Boeing

The Boeing Company

Type	Public
Traded as	NYSE: BA Dow Jones Industrial Average Component S&P 500 Component
Industry	Aerospace Defense
Founded	Seattle, Washington, United States (July 15, 1916 (1916-07-15))[1](p6)
Founder	William Boeing
Headquarters	Chicago, Illinois, U.S.[1](p6)
Area served	Worldwide[1](p1)
Key people	Dennis Muilenburg (President and CEO) James McNerney (Chairman) Raymond Conner (Vice Chairman)
Products	737, 747, 767, 777, 787 F/A-18E/F Super Hornet CH-47 Chinook 702 satellite family
Production output	745 aircraft[1](pp26,33) 10 satellites[1](p34)
Services	Leasing Support solutions[1](pp35–36)
Revenue	US$ 90.78 billion (2014)[2]
Operating income	US$ 6.562 billion (2014)[3]
Net income	US$ 5.446 billion (2014)[3]
Total assets	US$ 99.198 billion (2014)[4]
Total equity	US$ 8.790  billion (2014)[4]
Number of employees	162,730 (May 2015)[5]
Divisions	Commercial Airplanes Defense, Space & Security Boeing Capital Engineering, Operations & Technology Shared Services Group [1](p1)
Subsidiaries	Aviall Services Boeing Aircraft Holding Company Boeing Australia Boeing Canada Boeing Capital Corporation Boeing Commercial Space Company Boeing Defence UK Jeppesen Narus [1](Exhibit 21)
Website	boeing.com

The Boeing Company (/ˈboʊ.ɪŋ/) is an American multinational corporation that designs, manufactures, and sells airplanes, rotorcraft, rockets and satellites. It also provides leasing and product support services. Boeing is among the largest global aircraft manufacturers, is the second-largest defense contractor in the world based on 2013 revenue,^[6] and is the largest exporter in the United States by dollar value.^[7][8] Boeing stock is a component of the Dow Jones Industrial Average.

The Boeing Company's corporate headquarters are located in Chicago and the company is led by President and CEO Dennis Muilenburg.^{[9][10][11][12]} Boeing is organized into five primary divisions: Boeing Commercial Airplanes (BCA); Boeing Defense, Space & Security (BDS); Engineering, Operations & Technology; Boeing Capital; and Boeing Shared Services Group. In 2014, Boeing recorded $90.78 billion in sales, ranked 27th on the Fortune magazine "Fortune 500" list (2015),^[13] ranked 90th on the "Fortune Global 500" list (2015), and ranked 27th on the "World's Most Admired Companies" list (2015).^[14]

History

Before 1930

In March 1910, William E. Boeing bought Heath's shipyard in Seattle on the Duwamish River, which later became his first airplane factory.^[15] Boeing was incorporated in Seattle by William Boeing, on July 15, 1916, as "Pacific Aero Products Co". Boeing was later incorporated in Delaware, the original Certificate of Incorporation was filed with the Secretary of State of Delaware on July 19, 1934. Boeing, who studied at Yale University, worked initially in the timber industry, where he became wealthy and learned about wooden structures. This knowledge proved invaluable in his subsequent design and assembly of airplanes. The company stayed in Seattle to take advantage of the local supply of spruce wood.^[16]

William Boeing founded his company a few months after the June 15 maiden flight of one of the two "B&W" seaplanes built with the assistance of George Conrad Westervelt, a U.S. Navy engineer. Boeing and Westervelt decided to build the B&W seaplane after having flown in a Curtiss aircraft. Boeing bought a Glenn Martin "Flying Birdcage" seaplane (so called because of all the guy-wires holding it together) and was taught to fly by Glenn Martin himself. Boeing soon crashed the Birdcage and when Martin informed Boeing that replacement parts would not become available for months, Boeing realized he could build his own plane in that amount of time. He and his friend Cdr. G.C. Westervelt agreed to build a better airplane and soon produced the B&W Seaplane.^[17] This first Boeing airplane was assembled in a lakeside hangar located on the northeast shore of Seattle's Lake Union. Many of Boeing's early planes were seaplanes.

On May 9, 1917, the company became the "Boeing Airplane Company". In late 1917, the U.S. entered World War I and Boeing knew that the U.S. Navy needed seaplanes for training. So Boeing shipped two new Model Cs to Pensacola, Florida where the planes were flown for the Navy. The Navy liked the Model C and ordered fifty more.^[18] The company moved its operations to a larger former shipbuilding facility known as Boeing Plant 1, located on the lower Duwamish River.

When World War I ended in 1918, a large surplus of cheap, used military planes flooded the commercial airplane market, and this prevented aircraft companies like Boeing from selling any new airplanes. Because of this, many airplane companies went out of business, but other companies, including Boeing, started selling other products. Boeing built dressers, counters, and furniture, along with flat-bottom boats called Sea Sleds.^[18]

In 1919 the Boeing B-1 made its first flight. It was a flying boat that accommodated one pilot and two passengers and some mail. Over the course of eight years, it made international airmail flights from Seattle to Victoria, British Columbia.^[19] On May 24, 1920, the Boeing Model 8 made its first flight. It was the first plane to fly over Mount Rainier.^[20]

In 1923, Boeing began a competition against Curtiss for a contract to develop a pursuit fighter for the U.S. Army Air Service. Although Curtiss finished its design first and was awarded the contract, Boeing continued to develop its PW-9 fighter. That plane, along with the Boeing P-12/ F4B fighter,^[21] made Boeing a leading manufacturer of fighters over the course of the next decade.

In 1925, Boeing built its Model 40 mail plane for the U.S. government to use on airmail routes. In 1927, an improved version of this plane was built, the Model 40A which won the U.S. Post Office's contract to deliver mail between San Francisco and Chicago. The 40A also had a passenger cabin that accommodated two passengers.^[22]

That same year, Boeing created an airline named Boeing Air Transport, which merged a year later with Pacific Air Transport and the Boeing Airplane Company. The first airmail flight for the airline was on July 1, 1927.^[22] The company changed its name to United Aircraft and Transport Corporation in 1929 and acquired Pratt & Whitney, Hamilton Standard Propeller Company, and Chance Vought. United Aircraft then purchased National Air Transport in 1930.

On July 27, 1928, the 12-passenger Boeing 80 biplane made its first flight. With three engines, it was Boeing's first plane built with the sole intention of being a passenger transport. An upgraded version, the 80A, carrying eighteen passengers, made its first flight in September 1929.^[22]

1930s and 1940s

In 1930, the Monomail, a low-wing monoplane that carried mail, was built. Built entirely out of metal, it was very fast and aerodynamic, and had retractable landing gear. In fact, its design was so revolutionary that the engines and propellers of the time could not handle the plane. By the time controllable pitch propellers were developed, Boeing was building its Model 247 airliner. Two Monomails were built. The second one, the Model 221, had a 6-passenger cabin.^[23][24]

In 1933 the Boeing 247 was introduced, the first truly modern airliner. The 247 was an all-metal low-wing monoplane that was much faster, safer, and easier to fly than other passenger aircraft. For example, it was the first twin engine passenger aircraft that could fly on one engine. In an era of unreliable engines, this vastly improved flight safety. Boeing built the first sixty aircraft exclusively for its own United Airlines subsidiary's operations. This badly hurt competing airlines, and was typical of the anti-competitive corporate behavior that the U.S. government sought to prohibit at the time.

The Air Mail Act of 1934 prohibited airlines and manufacturers from being under the same corporate umbrella, so the company split into three smaller companies – Boeing Airplane Company, United Airlines, and United Aircraft Corporation, the precursor to United Technologies. As a result, William Boeing sold off his shares and left Boeing. Claire Egtvedt, who had become Boeing's president in 1933, became the chairman as well. He believed the company's future was in building bigger planes.^[25][26] Work began in 1936 on Boeing Plant 2 to accommodate the production of larger modern aircraft.

Shortly after, an agreement with Pan American World Airways (Pan Am) was reached, to develop and build a commercial flying boat able to carry passengers on transoceanic routes. The first flight of the Boeing 314 Clipper was in June 1938. It was the largest civil aircraft of its time, with a capacity of 90 passengers on day flights, and of 40 passengers on night flights. One year later, the first regular passenger service from the U.S. to the UK was inaugurated. Subsequently other routes were opened, so that soon Pan Am flew with the Boeing 314 to destinations all over the world.

In 1938, Boeing completed work on its Model 307 Stratoliner. This was the world's first pressurized-cabin transport aircraft, and it was capable of cruising at an altitude of 20,000 feet (6,100 m) – above most weather disturbances. It was based on the B-17, using the same wings, tail and engines.

During World War II, Boeing built a large number of B-17 and B-29 bombers. Boeing ranked twelfth among United States corporations in the value of wartime production contracts.^[27] Many of the workers were women whose husbands had gone to war. In the beginning of March 1944, production had been scaled up in such a manner that over 350 planes were built each month. To prevent an attack from the air, the manufacturing plants had been covered with greenery and farmland items. During these years of war the leading aircraft companies of the U.S. cooperated. The Boeing-designed B-17 bomber was assembled also by Lockheed Aircraft Corp. and Douglas Aircraft Co., while the B-29 was assembled also by Bell Aircraft Co. and by Glenn L. Martin Company.^[28]

After the war, most orders of bombers were canceled and 70,000 people lost their jobs at Boeing. The company aimed to recover quickly by selling its Stratocruiser (the Model 377), a luxurious four-engine commercial airliner developed from the B-29. However, sales of this model were not as expected and Boeing had to seek other opportunities to overcome the situation. The company successfully sold military derivatives of the Stratocruiser, such as the C-97 adapted for troop transportation and the KC-97 for aerial refueling.

1950s

Boeing developed military jets such as the B-47 Stratojet and B-52 Stratofortress bombers in the late-1940s and into the 1950s. During the early 1950s, Boeing used company funds to develop the 367–80 jet airliner demonstrator that led to the KC-135 Stratotanker and Boeing 707 jetliner. Some of these were built at Boeing's facilities in Wichita, Kansas, which existed from 1931 until 2014.

In the mid-1950s technology had advanced significantly, which gave Boeing the opportunity to develop and manufacture new products. One of the first was the guided short-range missile used to intercept enemy aircraft. By that time the Cold War had become a fact of life, and Boeing used its short-range missile technology to develop and build an intercontinental missile.

In 1958, Boeing began delivery of its 707, the United States' first commercial jet airliner, in response to the British De Havilland Comet, French Sud Aviation Caravelle and Soviet Tupolev Tu-104, which were the world's first generation of commercial jet aircraft. With the 707, a four-engine, 156-passenger airliner, the U.S. became a leader in commercial jet manufacture. A few years later, Boeing added a second version of this aircraft, the Boeing 720, which was slightly faster and had a shorter range.

Boeing was a major producer of small turbine engines during the 1950s and 1960s. The engines represented one of the company's major efforts to expand its product base beyond military aircraft after World War II. Development on the gasoline turbine engine started in 1943 and Boeing's gas turbines were designated models 502, 520, 540, 551 and 553. Boeing built 2,461 engines before production ceased in April 1968. Many applications of the Boeing gas turbine engines were considered to be firsts, including the first turbine-powered helicopter and boat.^[29]

1960s

Vertol Aircraft Corporation was acquired by Boeing in 1960,^[30] and was reorganized as Boeing's Vertol division. The twin-rotor CH-47 Chinook, produced by Vertol, took its first flight in 1961. This heavy-lift helicopter remains a work-horse vehicle up to the present day. In 1964, Vertol also began production of the CH-46 Sea Knight.

In December 1960, Boeing announced the model 727 jetliner, which went into commercial service about three years later. Different passenger, freight and convertible freighter variants were developed for the 727. The 727 was the first commercial jetliner to reach 1,000 sales, and a few years later the 1,500 mark was reached.

Boeing won a contract in 1961 to manufacture the S-IC stage of the Saturn V rocket, manufactured at the Michoud Assembly Facility in New Orleans, Louisiana.

In 1966, Boeing president William M. Allen asked Malcolm T. Stamper to spearhead production of the new 747 airliner on which the company's future was riding. This was a monumental engineering and management challenge, and included construction of the world's biggest factory in which to build the 747 at Everett, Washington, a plant which is the size of 40 football fields.^[31]

In 1967, Boeing introduced another short- and medium-range airliner, the twin-engine 737. It has become since then the best-selling commercial jet aircraft in aviation history. Several versions have been developed, mainly to increase seating capacity and range. The 737 remains in production as of 2015.

The roll-out ceremonies for the first 747–100 took place in 1968, at the massive new factory in Everett, about an hour's drive from Boeing's Seattle home. The aircraft made its first flight a year later. The first commercial flight occurred in 1970. The 747 has an intercontinental range and a larger seating capacity than Boeing's previous aircraft.

Boeing also developed hydrofoils in the 1960s. The screw-driven USS High Point (PCH-1) was an experimental submarine hunter. The patrol hydrofoil USS Tucumcari (PGH-2) was more successful. Only one was built, but it saw service in Vietnam and Europe before running aground in 1972. Its waterjet and fully submersed flying foils were the example for the later Pegasus-class patrol hydrofoils and the Model 929 Jetfoil ferries in the 1980s. The Tucumcari and later boats were produced in Renton. While the Navy hydrofoils were withdrawn from service in the late 1980s, the Boeing Jetfoils are still in service in Asia.

1970s

In the early 1970s Boeing suffered from the simultaneous decline in Vietnam War military spending, the slowing of the space program as Project Apollo neared completion, the recession of 1969–70,^[32]:291 and the company's $2 billion in debt as it built the new 747 airliner.^[32]:303 Boeing did not receive any orders for more than a year. Its bet for the future, the 747, was delayed in production by three months because of problems with its Pratt & Whitney engines. Another problem was that, in 1971, the U.S. Congress decided to stop the funding for the development of the supersonic 2707, Boeing's answer to the British-French Concorde, forcing the company to discontinue the project.

Commercial Airplane Group, by far the largest unit of Boeing, went from 83,700 employees in 1968 to 20,750 in 1971. Each unemployed Boeing employee cost at least one other job, and unemployment rose to 14 percent, the highest in the United States. Housing vacancy rates rose to 16 percent from 1 percent in 1967. U-Haul dealerships ran out of trailers because so many people moved out. A billboard appeared near the airport:^{[32]:303–304}

Will the last person
leaving SEATTLE -
Turn out the lights.^[32]:303

In January 1970, the first 747, a four-engine long-range airliner, flew its first commercial flight with Pan American World Airways. The 747 changed the airline industry, providing much larger seating capacity than any other airliner in production. The company has delivered nearly 1,400 Boeing 747s. The 747 has undergone continuous improvements to keep it technologically up-to-date. Larger versions have also been developed by stretching the upper deck. The newest version of the 747, the 747-8 is in production as of 2015.

Boeing launched three Jetfoil 929-100 hydrofoils that were acquired in 1975 for service in the Hawaiian Islands. When the service ended in 1979 the three hydrofoils were acquired by Far East Hydrofoil for service between Hong Kong and Macau.^[33]

During the 1970s, Boeing also developed the US Standard Light Rail Vehicle, which has been used in San Francisco, Boston, and Morgantown, West Virginia.

1980s

In 1983, the economic situation began to improve. Boeing assembled its 1,000th 737 passenger aircraft. During the following years, commercial aircraft and their military versions became the basic equipment of airlines and air forces. As passenger air traffic increased, competition was harder, mainly from Airbus, a European newcomer in commercial airliner manufacturing. Boeing had to offer new aircraft, and developed the single-aisle 757, the larger, twin-aisle 767, and upgraded versions of the 737. An important project of these years was the Space Shuttle, to which Boeing contributed with its experience in space rockets acquired during the Apollo era. Boeing participated also with other products in the space program, and was the first contractor for the International Space Station program.

During the decade several military projects went into production, including Boeing support of the stealth B-2 bomber. As part of an industry team led by Northrop, Boeing built the outboard portion of the B-2 stealth bomber wing, the aft center fuselage section, landing gear, fuel system and weapons delivery system. At its peak in 1991, the B-2 was the largest military program at Boeing, employing about 10,000 people. The same year, the National Aeronautic Association of the USA awarded the B-2 design team the Collier Trophy for the greatest achievement in aerospace in America. The first B-2 rolled out of the bomber's final assembly facility in Palmdale, California, in November 1988 and it flew for the first time on July 17, 1989.^[34]

The Avenger air defense system and a new generation of short-range missiles also went into production. During these years, Boeing was very active in upgrading existing military equipment and developing new ones. Boeing also contributed to wind power development with the experimental MOD-2 Wind Turbines for NASA and the United States Department of Energy, and the MOD-5B for Hawaii.^[35]

1990s

Boeing was one of seven competing companies that bid for the Advanced Tactical Fighter. Boeing agreed to team with General Dynamics and Lockheed, so that all three companies would participate in the development if one of the three companies design was selected. The Lockheed design was eventually selected and developed into the F-22 Raptor.^[36]

In April 1994, Boeing introduced the most modern commercial jet aircraft at the time, the twin-engine 777, with a seating capacity of approximately 300 to 370 passengers in a typical three-class layout, in between the 767 and the 747. The longest range twin-engined aircraft in the world, the 777 was the first Boeing airliner to feature a "fly-by-wire" system and was conceived partly in response to the inroads being made by the European Airbus into Boeing's traditional market. This aircraft reached an important milestone by being the first airliner to be designed entirely by using computer-aided design (CAD) techniques.^[37] The 777 was also the first airplane to be certified for 180 minute ETOPS at entry into service by the FAA.^[38] Also in the mid-1990s, the company developed the revamped version of the 737, known as the 737 "Next-Generation", or 737NG. It has since become the fastest-selling version of the 737 in history, and on April 20, 2006 sales passed those of the "Classic 737", with a follow-up order for 79 aircraft from Southwest Airlines.

In 1995, Boeing chose to demolish the headquarters complex on East Marginal Way South instead of upgrading it to match new seismic standards. The headquarters were moved to an adjacent building and the facility was demolished in 1996.^[39] In 1997, Boeing was headquartered on East Marginal Way South, by King County Airport, in Seattle.^[40]

In 1996, Boeing acquired Rockwell's aerospace and defense units. The Rockwell business units became a subsidiary of Boeing, named Boeing North American, Inc. In August 1997, Boeing merged with McDonnell Douglas in a US$13 billion stock swap under the name The Boeing Company. However this name had actually been Boeing's official name previously adopted on May 21, 1961.^[41] Following the merger, the McDonnell Douglas MD-95 was renamed the Boeing 717, and the production of the MD-11 was limited to the freighter version. Boeing introduced a new corporate identity with completion of the merger, incorporating the Boeing logo type and a stylized version of the McDonnell Douglas symbol, which was derived from the Douglas Aircraft logo from the 1970s.

Aerospace analyst Scott Hamilton heavily criticized the CEO and his deputy, Philip M. Condit and Harry Stonecipher, for thinking of their personal benefit first, and with it causing the problems hitting Boeing many years later. Instead of investing the huge cash reserve to build new airplanes, they initiated a program to buy back Boeing stock for more than US$10 billion.^[42]

2000–2009

In January 2000, Boeing chose to expand its presence in another aerospace field of satellite communications by purchasing Hughes Electronics.^[43] Hughes Space and Communications Company, which had pioneered the satellite communications field and represented 70 percent of all commercial communications built in 1997.

In September 2001, Boeing moved its corporate headquarters from Seattle to Chicago. Chicago, Dallas and Denver – vying to become the new home of the world's largest aerospace concern – all had offered packages of multimillion-dollar tax breaks.^[44] Its offices are located in the Fulton River District, Chicago just outside the Loop, Chicago.^[12]

On October 10, 2001, Boeing lost to its rival Lockheed Martin in the fierce competition for the multibillion-dollar Joint Strike Fighter contract. Boeing's entry, the X-32, was rejected in favor of Lockheed's X-35 entrant. Boeing continues to serve as the prime contractor on the International Space Station and has built several of the major components.

Boeing began development of the KC-767 aerial refueling tanker in the early 2000s. Italy and Japan ordered four KC-767s each. After development delays and FAA certification, Boeing delivered the tankers to Japan from 2008^[45][46] with the second KC-767 following on 5 March.^[47] to 2010.^[48] Italy received its four KC-767 during 2011.^[49][50][51]

In 2004, Boeing ended production of the 757 after 1,050 aircraft were produced. More advanced, stretched versions of the 737 were beginning to compete against the 757, and the planned 787-3 was to fill much of the top end of the 757 market. Also that year, Boeing announced that the 717, the last civil aircraft to be designed by McDonnell Douglas, would cease production in 2006. The 767 was in danger of cancellation as well, with the 787 replacing it, but orders for the freighter version extended the program.

After several decades of success, Boeing lost ground to Airbus and subsequently lost its lead in the airliner market in 2003. Multiple Boeing projects were pursued and then canceled, notably the Sonic Cruiser, a proposed jetliner that would travel just under the speed of sound, cutting intercontinental travel times by as much as 20 percent. It was launched in 2001 along with a new advertising campaign to promote the company's new motto, "Forever New Frontiers", and to rehabilitate its image. However, the plane's fate was sealed by the changes in the commercial aviation market following the September 11 attacks and the subsequent weak economy and increase in fuel prices.

Subsequently, Boeing streamlined its production and turned its attention to a new model, the Boeing 787 Dreamliner, using much of the technology developed for the Sonic Cruiser, but in a more conventional aircraft designed for maximum efficiency. The company also launched new variants of its successful 737 and 777 models. The 787 proved to be highly popular choice with airlines, and won a record number of pre-launch orders. With delays to Airbus' A380 program several airlines threatened to switch their A380 orders to Boeing's new 747 version, the 747-8.^[52] Airbus's response to the 787, the A350, received a lukewarm response at first when it was announced as an improved version of the A330, and then gained significant orders when Airbus promised an entirely new design. The 787 program has encountered delays, with the first flight not occurring until late 2009.^[53]

After regulatory approval, Boeing formed a joint venture, United Launch Alliance with its competitor, Lockheed Martin, on December 1, 2006. The new venture is the largest provider of rocket launch services to the U.S. government.^[54]

On August 2, 2005, Boeing sold its Rocketdyne rocket engine division to Pratt & Whitney. On May 1, 2006, Boeing agreed to purchase Dallas, Texas-based Aviall, Inc. for $1.7 billion and retain $350 million in debt. Aviall, Inc. and its subsidiaries, Aviall Services, Inc. and ILS formed a wholly owned subsidiary of Boeing Commercial Aviation Services (BCAS).^[55]

Realizing that increasing numbers of passengers have become reliant on their computers to stay in touch, Boeing introduced Connexion by Boeing, a satellite based Internet connectivity service that promised air travelers unprecedented access to the World Wide Web. The company debuted the product to journalists in 2005, receiving generally favorable reviews. However, facing competition from cheaper options, such as cellular networks, it proved too difficult to sell to most airlines. In August 2006, after a short and unsuccessful search for a buyer for the business, Boeing chose to discontinue the service.^[56][57]

On August 18, 2007, NASA selected Boeing as the manufacturing contractor for the liquid-fueled upper stage of the Ares I rocket. The stage, based on both Apollo-Saturn and Space Shuttle technologies, was to be constructed at NASA's Michoud Assembly Facility near New Orleans; Boeing constructed the S-IC stage of the Saturn V rocket at this site in the 1960s.

Boeing launched the 777 Freighter in May 2005 with an order from Air France. The freighter variant is based on the −200LR. Other customers include FedEx and Emirates. Boeing officially announced in November 2005 that it would produce a larger variant of the 747, the 747-8, in two versions, commencing with the Freighter version with firm orders for two cargo carriers. The second version, named the Intercontinental, is for passenger airlines. Both 747-8 versions feature a lengthened fuselage, new, advanced engines and wings, and the incorporation of other technologies developed for the 787.

Boeing also received the launch contract from the U.S. Navy for the P-8 Poseidon Multimission Maritime Aircraft, an anti-submarine warfare patrol aircraft. It has also received orders for the 737 AEW&C "Wedgetail" aircraft. The company has also introduced new extended range versions of the 737. These include the 737-700ER and 737-900ER. The 737-900ER is the latest and will extend the range of the 737–900 to a similar range as the successful 737–800 with the capability to fly more passengers, due to the addition of two extra emergency exits.

The 777-200LR Worldliner embarked on a well-received global demonstration tour in the second half of 2005, showing off its capacity to fly farther than any other commercial aircraft. On November 10, 2005, the 777-200LR set a world record for the longest non-stop flight. The plane, which departed from Hong Kong traveling to London, took a longer route, which included flying over the U.S. It flew 11,664 nautical miles (21,601 km) during its 22-hour 42-minute flight. It was flown by Pakistan International Airlines pilots and PIA was the first airline to fly the 777-200LR Worldliner.

On August 11, 2006, Boeing agreed to form a joint-venture with the large Russian titanium producer, VSMPO-Avisma for the machining of titanium forgings. The forgings will be used on the 787 program.^[58] On December 27, 2007 Boeing and VSMPO-Avisma created a joint venture, Ural Boeing Manufacturing, and signed a contract on titanium product deliveries until 2015, with Boeing planning to invest $27 billion in Russia over the next 30 years.^[59]

In February 2011, Boeing received a contract for 179 KC-46 U.S. Air Force tankers at a value of $35 billion.^[60] The KC-46 tankers are based on the KC-767.

Boeing jointly with Science Applications International Corporation (SAIC), were the prime contractors in the U.S. military's Future Combat Systems program.^[61] The FCS program was canceled in June 2009 with all remaining systems swept into the BCT Modernization program.^[62] Boeing works jointly with SAIC in the BCT Modernization program like the FCS program but the U.S. Army will play a greater role in creating baseline vehicles and will only contract others for accessories.

Defense Secretary Robert M. Gates' shift in defense spending to, "make tough choices about specific systems and defense priorities based solely on the national interest and then stick to those decisions over time"^[63] hit Boeing especially hard, because of their heavy involvement with canceled Air Force projects.^[64]

Unethical conduct

In May 2003, the U.S. Air Force announced it would lease 100 KC-767 tankers to replace the oldest 136 of its KC-135s. In November 2003, responding to critics who argued that the lease was more expensive than an outright purchase, the DoD announced a revised lease of 20 aircraft and purchase of 80. In December 2003, the Pentagon announced the project was to be frozen while an investigation of allegations of corruption by one of its former procurement staffers, Darleen Druyun (who began employment at Boeing in January) was begun. The fallout of this resulted in the resignation of Boeing CEO Philip M. Condit and the termination of CFO Michael M. Sears.^[65] Harry Stonecipher, former McDonnell Douglas CEO and Boeing COO, replaced Condit on an interim basis. Druyun pleaded guilty to inflating the price of the contract to favor her future employer and to passing information on the competing Airbus A330 MRTT bid. In October 2004, she received a jail sentence for corruption.^[66]

In March 2005, the Boeing board forced President and CEO Harry Stonecipher to resign. Boeing said an internal investigation revealed a "consensual" relationship between Stonecipher and a female executive that was "inconsistent with Boeing's Code of Conduct" and "would impair his ability to lead the company".^[67] James A. Bell served as interim CEO (in addition to his normal duties as Boeing's CFO) until the appointment of Jim McNerney as the new Chairman, President, and CEO on June 30, 2005.

Industrial espionage

In June 2003, Lockheed Martin sued Boeing, alleging that the company had resorted to industrial espionage in 1998 to win the Evolved Expendable Launch Vehicle (EELV) competition. Lockheed Martin claimed that the former employee Kenneth Branch, who went to work for McDonnell Douglas and Boeing, passed nearly 30,000 pages of proprietary documents to his new employers. Lockheed Martin argued that these documents allowed Boeing to win 19 of the 28 tendered military satellite launches.^[68][69]

In July 2003, Boeing was penalized, with the Pentagon stripping seven launches away from the company and awarding them to Lockheed Martin.^[68] Furthermore, the company was forbidden to bid for rocket contracts for a twenty-month period, which expired in March 2005.^[69] In early September 2005, it was reported that Boeing was negotiating a settlement with the U.S. Department of Justice in which it would pay up to $500 million to cover this and the Darleen Druyun scandal.^[70]

1992 EU-US Agreement notes

Until the late 1970s, the U.S. had a near monopoly in the Large Civil Aircraft (LCA) sector.^[71] The Airbus consortium (created in 1969) started competing effectively in the 1980s. At that stage the U.S. became concerned about the European competition and the alleged subsidies paid by the European governments for the developments of the early models of the Airbus family. This became a major issue of contention, as the European side was equally concerned by subsidies accruing to U.S. LCA manufacturers through NASA and Defense programs.

The EU and the U.S. started bilateral negotiations for the limitation of government subsidies to the LCA sector in the late 1980s. Negotiations were concluded in 1992 with the signing of the EC-US Agreement on Trade in Large Civil Aircraft which imposes disciplines on government support on both sides of the Atlantic which are significantly stricter than the relevant World Trade Organization (WTO) rules: Notably, the Agreement regulates in detail the forms and limits of government support, prescribes transparency obligations and commits the parties to avoiding trade disputes.^[72]

Subsidy disputes

In 2004, the EU and the U.S. agreed to discuss a possible revision of the 1992 EU-US Agreement provided that this would cover all forms of subsidies including those used in the U.S., and in particular the subsidies for the Boeing 787; the first new aircraft to be launched by Boeing for 14 years. In October 2004 the U.S. began legal proceedings at the WTO by requesting WTO consultations on European launch investment to Airbus. The U.S. also unilaterally withdrew from the 1992 EU-US Agreement.^[73] The U.S. claimed Airbus had violated a 1992 bilateral accord when it received what Boeing deemed "unfair" subsidies from several European governments. Airbus responded by filing an separate complaint, contesting that Boeing had also violated the accord when it received tax breaks from the U.S. Government. Moreover, the EU also complained that the investment subsidies from Japanese airlines violated the accord.

On January 11, 2005, Boeing and Airbus agreed that they would attempt to find a solution to the dispute outside of the WTO. However, in June 2005, Boeing and the United States government reopened the trade dispute with the WTO, claiming that Airbus had received illegal subsidies from European governments. Airbus has also responded to this claim against Boeing, reopening the dispute and also accusing Boeing of receiving subsidies from the U.S. Government.^[74]

On September 15, 2010, the WTO ruled that Boeing had received billions of dollars in government subsidies.^[75] Boeing responded by stating that the ruling was a fraction of the size of the ruling against Airbus and that it required few changes in its operations.^[76] Boeing has received $8.7 billion in support from Washington state.^[77]

Future concepts

In May 2006, four concept designs being examined by Boeing were outlined in The Seattle Times based on corporate internal documents. The research aims in two directions: low-cost airplanes, and environmental-friendly planes. Codenamed after the well-known Muppets, a design team known as the Green Team concentrated primarily on reducing fuel usage. All four designs illustrated rear-engine layouts.^[78]

• "Fozzie" employs open rotors and offers a lower cruising speed.^[78]
• "Beaker" has very thin, long wings, with the ability to partially fold-up to facilitate easier taxiing.
• "Kermit Kruiser" has forward swept wings over which are positioned its engines, with the aim of lowering noise below due to the reflection of the exhaust signature upward.^[78]
• "Honeydew" with its delta wing design, resembles a marriage of the flying wing concept and the traditional tube fuselage.^[78]

As with most concepts, these designs are only in the exploratory stage, intended to help Boeing evaluate the potentials of such radical technologies.^[78]

Boeing recently patented its own force field technology, also known as the shock wave attenuation system, that would protect vehicles from shock waves generated by nearby explosions.^[79] Boeing has yet to confirm when they plan to build and test the technology.^[80]

2010-present

In 2010, Boeing completed its acquisition of Argon ST Inc. Based in Fairfax, Virginia, Argon ST develops C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) and combat systems. On June 30, 2010, Boeing announced its intent to acquire Argon ST as part of the company's strategy to expand its capabilities to address the C4ISR, cyber and intelligence markets.^[81]

On November 17, 2011, it was reported that Lion Air has committed to ordering 201 Boeing 737 MAX and 29 737-900ER airliners. This order, when finalized, is worth $21.7 billion at list prices. This is larger than any of Boeing's previous commercial aircraft sales. The deal includes options for a further 150 airliners.^[82][83]

On January 5, 2012, Boeing announced plans to close its facilities in Wichita, Kansas with 2,160 workers before 2014, more than 80 years after it was established. Boeing had employed as many as 40,000 people there.^[84][85][86]

Boeing announced on May 13, 2013 it would cut 1,500 IT jobs in Seattle, Washington over the next three years in combination of layoffs, attrition and relocation. Most of those will be relocated (approximately 600 jobs each) to St. Louis, Missouri, and North Charleston, South Carolina.^[87][88]

The company announced a 26 percent increase in profits—US$1.23 billion total—for Q4 2013, citing higher demand for commercial aircraft.^[89]

In April 2014, Boeing announced their Long Beach construction facility would shut down by the end of the year. The facility was responsible for building the Boeing C-17 Globemaster III military transport aircraft. The last C-17, #276, left final assembly in 2015. The assembly site officially closed in February 2015, and by April, Boeing had been auctioning factory manufacturing parts off. Some 2,200 jobs are affected.^[90]

In June 2015, Boeing announced that James McNerney would step down as CEO to be replaced by Boeing's COO, Dennis Muilenburg, on July 1, 2015.^{[9][91][92][93]}

Environment

Environmental record

In 2006, the UCLA Center for Environmental Risk Reduction released a study showing that Boeing's Santa Susana Field Laboratory, in the Simi Hills of eastern Ventura County in Southern California, had been contaminated with toxic and radioactive waste. The study found that air, soil, groundwater, and surface water at the site all contained radionuclides, toxic metals, and dioxins; air and water additionally contained perchlorate, TCE, and hydrazines, while water showed the presence of PCBs as well.^[94] Clean up studies and lawsuits are in progress.^[95][96]

Jet biofuels

The airline industry is responsible for about 11 percent of greenhouse gases emitted by the U.S. transportation sector.^[97] Aviation's share of the greenhouse gas emissions is poised to grow, as air travel increases and ground vehicles use more alternative fuels like ethanol and biodiesel.^[97] Boeing estimates that biofuels could reduce flight-related greenhouse-gas emissions by 60 to 80 percent.^[97] The solution blends algae fuels with existing jet fuel.^[97]

Boeing executives said the company is informally collaborating with leading Brazilian biofuels maker Tecbio, Aquaflow Bionomic of New Zealand and other fuel developers around the world. So far, Boeing has tested six fuels from these companies, and will probably have gone through 20 fuels "by the time we're done evaluating them."^[97] Boeing was also joining other aviation-related members in the Algal Biomass Organization (ABO) on June 2008.^[98]

Air New Zealand and Boeing are researching the jatropha plant to see if it is a sustainable alternative to conventional fuel.^[99] A two-hour test flight using a 50–50 mixture of the new biofuel with Jet A-1 in the number one position Rolls Royce RB-211 engine of 747–400 ZK-NBS, was successfully completed on December 30, 2008. The engine was then removed to be scrutinised and studied to identify any differences between the Jatropha blend and regular Jet A1. No effects to performances were found.

On August 31, 2010, Boeing worked with the U.S. Air Force to test the Boeing C-17 running on 50 percent JP-8, 25 percent Hydro-treated Renewable Jet fuel and 25 percent of a Fischer–Tropsch fuel with successful results.^[100]

Electric propulsion

For NASA's N+3 future airliner program, Boeing has determined that hybrid electric engine technology is by far the best choice for its subsonic design. Hybrid electric propulsion has the potential to shorten takeoff distance and reduce noise.^[101]

Political contributions, federal contracts, advocacy

In both 2009 and 2008 Boeing was second on the list of Top 100 US Federal Contractors, with contracts totalling $22 billion and $23 billion respectively.^[102][103] Since 1995, the company has agreed to pay $1.6 billion to settle 39 instances of misconduct, including $615 million in 2006 in relation to illegal hiring of government officials and improper use of proprietary information.^[104][105]

Boeing's 2010 lobbying expenditure by the third quarter was $13.2 million (2009 total: $16.9 million).^[106][107] In the 2008 presidential election, Barack Obama "was by far the biggest recipient of campaign contributions from Boeing employees and executives, hauling in $197,000 – five times as much as John McCain, and more than the top eight Republicans combined."^[108]

Boeing has a corporate citizenship program centered on charitable contributions in five areas: education, health and human services, environment, the arts and culture, and civic engagement.^[109] In 2011, Boeing spent $147.3 million in these areas through charitable grants and business sponsorships.^[110] In February 2012, Boeing Global Corporate Citizenship partnered with the Insight Labs to develop a new model for foundations to more effectively lead the sector they serve.^[111]

The company is a member of the U.S. Global Leadership Coalition, a Washington D.C.-based coalition of over 400 major companies and NGOs that advocates for a larger International Affairs Budget, which funds American diplomatic and development efforts abroad.^[112] A series of U.S. diplomatic cables show how U.S. diplomats and senior politicians intervene on behalf of Boeing to help boost the company's sales.^[113]

In 2007 and 2008 the company benefited from over $10 billion of long-term loan guarantees, helping finance the purchase of their commercial aircraft in countries including Brazil, Canada, Ireland and the United Arab Emirates, from the Export-Import Bank of the United States, some 65 percent of the total loan guarantees the bank made in the period.^[114]

In December 2011, the non-partisan organization Public Campaign criticized Boeing for spending $52.29 million on lobbying and not paying taxes during 2008–2010, instead getting $178 million in tax rebates, despite making a profit of $9.7 billion, laying off 14,862 workers since 2008, and increasing executive pay by 31 percent to $41.9 million in 2010 for its top five executives.^[115]

Divisions

The two largest divisions are Boeing Commercial Airplanes and Boeing Defense, Space & Security (BDS).^[116]

• Boeing Capital
• Boeing Commercial Airplanes
• Boeing Defense, Space & Security
  • Phantom Works
• Engineering, Operations & Technology
  • Boeing Research & Technology
  • Boeing Test & Evaluation
  • Intellectual Property Management
  • Information Technology
  • Environment, Health, and Safety^[116]
• Boeing Shared Services Group
  • Boeing Realty
  • Boeing Travel Management Company
  • Boeing Supplier Management

Employment numbers

Employment by location (2015)[117] Location Employees Alabama 2,669 Arizona 3,956 California 16,955 Illinois 722 Missouri 14,813 Pennsylvania 5,141 South Carolina 7,682 Texas 4,310 Washington 80,066 Other Locations 27,022 Total Company 162,730

Employment by division (2015)[117] Group Employees Commercial Airplanes 83,754 Boeing Defense, Space & Security 50,699 Corporate 28,277 Engineering, Operations & Technology 17,537 Finance & Shared Services 7,727 Other 3,013 Total Company 162,730

Approximately 1.5 percent of Boeing employees are in the Technical Fellowship program, a program through which Boeing's top engineers and scientists set technical direction for the company.^[118] The average salary at Boeing is $76,784, reported by former employees.^[119]

• ^a On January 4, 2012 Boeing announced plans to close its Wichita, Kansas plant by 2013.^[120]

Corporate governance

Board of directors W. James McNerney, Jr. – Chairman Admiral Edmund P. Giambastiani, Jr., U.S. Navy (ret) Arthur D. Collins, Jr. Linwood M. Coburn Linda Cook Kenneth M. Duberstein John Bryson John H. Biggs John McDonnell Mike S. Zafirovski Susan C. Schwab William M. Daley Chief executive officer 1933–1939 Clairmont L. Egtvedt 1939–1944 Philip G. Johnson 1944–1945 Clairmont L. Egtvedt[121] 1945–1968 William M. Allen 1969–1986 Thornton "T" A. Wilson 1986–1996 Frank A. Shrontz[122] 1996–2003 Philip M. Condit 2003–2005 Harry C. Stonecipher 2005 James A. Bell (acting) 2005–2015 James McNerney 2015– Dennis Muilenburg[123]

Chairman of the board 1916–1934 William E. Boeing 1934–1939 Clairmont L. Egtvedt (acting) 1939–1966 Clairmont L. Egtvedt 1968–1972 William M. Allen 1972–1987 Thornton "T" A. Wilson 1988–1996 Frank A. Shrontz 1997–2003 Philip M. Condit 2003–2005 Lewis E. Platt 2005– W. James McNerney, Jr. President 1922–1925 Edgar N. Gott[124] 1926–1933 Philip G. Johnson 1933–1939 Clairmont L. Egtvedt 1939–1944 Philip G. Johnson 1944–1945 Clairmont L. Egtvedt 1945–1968 William M. Allen 1968–1972 Thornton "T" A. Wilson 1972–1985 Malcolm T. Stamper 1985–1996 Frank A. Shrontz 1996–1997 Philip M. Condit 1997–2005 Harry C. Stonecipher 2005 James A. Bell (acting) 2005–2013 W. James McNerney, Jr. 2013- Dennis Muilenburg[125]

See also

• Boeing 7x7 series
• Boeing Renton Factory
• Competition between Airbus and Boeing
• EADS/Airbus Group
• Comac
• Future of Flight Aviation Center & Boeing Tour – Corporate public museum
• Plant 42

References

Further reading

• Cloud, Dana L. We Are the Union: Democratic Unionism and Dissent at Boeing. Urbana, IL: University of Illinois Press, 2011.
• Greider, William. One World, Ready or Not: The Manic Logic of Global Capitalism. London: Penguin Press, 1997.

External links

Wikimedia Commons has media related to Boeing.

• The Boeing Company official site
• Boeing suppliers, partners and customers
• Historical Annual Reports for Boeing
• Transcripts of The Boeing Company's Quarterly Conference Calls
• Boeing companies grouped at OpenCorporates

Boeing Companies Boeing Aircraft Holding Company Boeing Australia Boeing Canada Boeing Capital Boeing Commercial Airplanes Boeing Defense, Space & Security Boeing Defence UK Boeing Phantom Works Boeing Rotorcraft Systems HRL Laboratories Jeppesen McDonnell Douglas Narus Spectrolab United Launch Alliance People William M. Allen James A. Bell John H. Biggs William Boeing John Bryson Arthur D. Collins, Jr. Philip M. Condit William M. Daley Darleen Druyun Kenneth Duberstein Edgar Gott Philip G. Johnson John McDonnell James McNerney Susan Schwab Michael M. Sears Frank Shrontz Harry Stonecipher Malcolm T. Stamper Thornton Wilson Mike S. Zafirovski Projects BCT Modernization Boeing Black Boeing 7x7 series Boeing hydrofoils Boeing Jetfoils Connexion by Boeing Future Combat Systems Facilities Boeing Everett Factory Boeing Plant 1 Boeing Plant 2 Boeing Renton Factory Boeing South Carolina Boeing Store Future of Flight Aviation Center & Boeing Tour Michoud Assembly Facility Plant 42 Other Boeing Strike of 1948 Boeing Technical Fellowship Competition between Airbus and Boeing

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