Boeing

The Boeing Company
	The 1997 logo combines the Boeing typeface with the McDonnell Douglas logoThe 1997 logo combines the Boeing typeface with the McDonnell Douglas logo
Company type	Public (NYSE: BA)
Industry	Aerospace and defense
Founded	1916 (adopted current name in 1917), Seattle, Washington
Headquarters	Chicago, Illinois, USA
Key people	Jim McNerney, CEO
Products	Commercial airliners; Military aircraft ; Munitions; Space systems
Revenue	$54.845 billion USD (FY 2005);
Net income	$2.572 billion
Number of employees	153,000 (2006)
Subsidiaries	Boeing Commercial Airplanes; Boeing Integrated Defense Systems; others
Website	www.boeing.com

The Boeing Company (NYSE: BA, TYO: 7661) is an aerospace and defense corporation headquartered in Chicago, Illinois. Boeing is the largest aircraft manufacturer by revenue and the second-largest defense contractor in the world.^[1] In 2005, the company was the world’s largest civil aircraft manufacturer in terms of value (with 49% of orders and 45% of deliveries), overtaking Airbus for the first time since 2000. The largest exporter in the United States, Boeing’s stock is a component of the

.

History

Before 1950s

The company was incorporated in Seattle, Washington by William E. Boeing on July 15, 1916, as “Pacific Aero Products Co.” following the June 15, 1916 maiden flight of one of the two “B&W” seaplanes built with the assistance of George Conrad Westervelt, a U.S. Navy engineer. On May 9, 1917, the company became the “Boeing Airplane Company.” William E. Boeing had studied at Yale University and worked initially in the timber industry, where he became a rich man. There he also acquired knowledge about wooden structures which was later revealed to be of value for the design and assembly of aircraft.

In 1927, Boeing created an airline, named Boeing Air Transport (BAT). A year later, BAT, as well as Pacific Air Transport and Boeing Airplane Company merged into a single corporation. 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. 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.

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The Boeing 314 Clipper.

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 US 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 the 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. — above most weather disturbances.

During World War II, Boeing built a huge number of bombers. Many of the workers were women whose spouses 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 US 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.

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, 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 aircraft adapted for troop transportation and for aerial refueling.

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The Boeing 707.

1950s

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

In 1958, Boeing began delivery of its B707, the United States' first commercial jet airliner, in response to the British De Havilland Comet, French Sud Caravelle and Soviet Tupolev Tu-104 'Camel'; which were the world’s first generation of commercial jet aircraft. With the 707, a four-engine, 156-passenger airliner, the US became leaders in commercial jet manufacture. A few years later, Boeing added a second version of this aircraft, the 720 which was slightly faster and had a shorter range. A few years later, Boeing introduced the 727, another commercial jet airliner of similar size, which had however three engines and was designed for medium-range routes. The 727 was immediately well accepted as a comfortable and reliable aircraft by passengers, crews, and airlines. Although production was discontinued in 1984, at the turn of the millennium nearly 1,300 727s were still in service at airlines around the world.

1960s

Piasecki Helicopter was acquired by Boeing in 1960, 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.

The 707 and 747 formed the backbone of many major airline fleets through the end of the 1970s.

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. The B737 is still being produced, and continuous improvements are made. Several versions have been developed, mainly to increase seating capacity and range.

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.

1970s

In the beginning of the 1970s, Boeing faced a new crisis. The Apollo program in which Boeing had participated significantly during the preceding decade was almost entirely cancelled. Once more, Boeing hoped to compensate sales with its commercial airliners. At that time, however, there was a heavy recession in the airlines industry so that Boeing did not receive one single order during more than one year. Boeing’s bet for the future, the new 747 was delayed in production and engendered much higher costs than had been forecast. Another problem was that, in 1971, the U.S. Congress decided to stop the financial support for the development of the supersonic 2707, Boeing’s answer to the British-French Concorde, forcing the company to discontinue the project. The company had to reduce the number of employees from over 80,000 to almost half, only in the Seattle area. In January 1970 the first 747, a four-engine long-range airliner, flew its first commercial flight. This famous aircraft completely changed the way of flying, with its 450-passenger seating capacity and its upper deck. Until 2001, Boeing had been the only aircraft manufacturer to offer such an airliner and has delivered near to 1,400 units. (Airbus now offers the A380, which when delivered will be the largest operational airliner). The 747 has undergone continuous improvements to keep it technologically up-to-date. Larger versions have also been developed by stretching the upper deck.

1980s

In 1983, the economic situation began to improve. Boeing assembled its 1,000th B737 passenger airliner. 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 a European newcomer in commercial airliner manufacturing, Airbus. 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, in which the company also participated. Boeing participated also with other products in the space program, and was the first contractor for the International Space Station. At the same time, several military projects went into production, like the RAH-66 Comanche helicopter, the Avenger air defense system and a new generation of short-range missiles. During these years, Boeing was very active upgrading existing military equipment and developing new ones.

1990s

In April 1994, Boeing introduced its most modern commercial jet aircraft, the twin-engine 777, with a seating capacity of between 300 and 400 passengers in a standard 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 in response to the inroads being made by the European Airbus into Boeing’s traditional market. This aircraft, commonly known as the “Triple Seven,” reached an important milestone by being the first airliner to be designed entirely by using CAD techniques. Also in the mid-1990s, the company developed the revamped version of the 737, known as the “Next-Generation 737,” 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. The “Next-Generation 737” line includes the 737-600, the 737-700, the 737-800, and the 737-900.

In 1996, Boeing acquired Rockwell’s aerospace and defense units. The Rockwell products became a subsidiary of Boeing, named Boeing North American, Inc. One year later, Boeing merged with McDonnell Douglas. Following the merger between Boeing and McDonnell Douglas, the McDonnell Douglas MD-95 was renamed the 717-200, and the production of the MD-11 was later stopped. Boeing introduced a new corporate identity with completion of the merger incorporating the Boeing typeface and part of the McDonnell Douglas logo, which the latter in turn came from Douglas's simplified logo in the 1950s.

2000s

In recent years Boeing has faced an increasingly competitive Airbus, which offers some commonality between models (reducing maintenance and training costs) and the latest fly-by-wire technology. From the 1970s Airbus has increased its family of aircraft to the point where they can now offer an aircraft in almost every class Boeing does. Indeed, Airbus is now competing in markets that Boeing once had a monopoly over, e.g. the A320 has been selected by several low-cost operators (the aircraft used by these airlines has traditionally been the 737) and the very large aircraft market, the A380. The 747 has suffered by competing with Boeing’s 777-300 series.

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Boeing 787 Dreamliner

Currently, Boeing is planning to introduce five new aircraft, the 787 “Dreamliner”, the ultra-long-range 777-200LR, the 737-900ER, 737-700ER and the 747-8. The 787 was originally known by the developmental designator 7E7. The Boeing 777-200LR has the longest range of any commercial aircraft, and is the first airliner to able to fly halfway across the planet with a commercially viable payload, and holds the world record for the longest flight by a commercial airliner at 21,601km. The 777-200LR has completed flight-testing and certification, with the first aircraft delivered to Pakistan International Airlines (PIA) in 2006. The 737-900ER, previously designated as the 737-900X is an improvement to the 737-900. The current 737-900 model has limited range, and is limited in capacity such that it can not be flown in a high-density configuration, rather requiring a solidly two-class configuration. The 737-900ER will extend the range of the 737-900ER 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.

In 2004, Boeing canceled production of the 757 after 1055 were produced, with the last aircraft going to Shanghai Airlines, in China. More advanced, stretched versions of the 737 were beginning to compete against the 757, and the new 787-3 will fill some of the top end of the 757 market. Boeing also soon canceled the production of 717 due to slow sales, and the 767 is likely to cease production soon. However, if Boeing manages to win the contract for new USAF tankers, the 767 program might be saved. Boeing also is building an advanced version of the 747, the 747-8 [1], which will compete more closely with the Airbus A380. The aircraft was informally announced at the 2005 Paris Airshow. The 747-8 is stretched and will offer higher efficiency and longer range. The passenger and cargo versions will be 12ft and 18ft longer than current 747-400 versions.

Digital film and Hollywood

Boeing shortly operated, under the Integrated Defense Systems unit, a group focused on using its expertise in digital communications technology to advance the distribution of major motion pictures. Despite Boeing's attempt to carve a niche in the movie industry, it ultimately sold all digital cinema equipment assets, intellectual property licenses, and existing theatre contracts to Access Integrated Technologies.

Recent history

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The Boeing 787 “Dreamliner” is the company’s newest commercial aircraft design.

After several decades of numerous successes, Boeing lost ground to Europe’s Airbus and subsequently lost its position as market leader in 2003. Multiple Boeing projects were pursued and then cancelled. The Boeing Sonic Cruiser is among these projects. The Boeing Sonic Cruiser was launched in 2001 along with a new advertising campaign to promote its new motto, “Forever New Frontiers,” and rehabilitate its image. Boeing is now focused on the newly-launched 787 as a platform of total fleet rejuvenation, which has benefitted from strong sales success at the expense of Airbus' competing offerings.

On October 10, 2001, against fierce competition for the contract to the JSF, Boeing lost to rival Lockheed Martin in the multi-billion dollar contract. Boeing’s plane was the X-32, which lost out to Lockheed’s F-35 entrant. The X-32 may have been hampered by the requirement for a redesign after several flaws were found in the original concept.

In Early May 2004 Boeing announced that the 717, the last civil aircraft to be designed by McDonnell-Douglas, would cease production by 2006, leaving the C-17 military transport as the last Douglas design still in production.

On August 2 2005 Boeing sold its Rocketdyne rocket engine division to Pratt & Whitney.

In May 2005, Boeing announced its intent form a new company, United Launch Alliance with its competitor Lockheed Martin. The new company will be the sole provider of rocket launch services to the US government. The joint venture is expected to gain regulatory approval and be complete near the end of 2005.

Unethical conduct

In May 2003 the US Air Force announced it would lease 100 KC-767 tankers to replace the oldest 136 of its KC-135s. The 10 year lease would give the USAF the option to purchase the aircraft at the end of the contract. In September 2003, responding to critics who argued that the lease was vastly more expensive than an outright purchase, the DOD announced a revised lease of 74 aircraft and purchase of 26.

In December 2003 the Pentagon announced the project was to be frozen while allegations of corruption by one if its former procurement staffers, Darleen Druyun (who had moved to Boeing in January) was investigated. The fallout of this resulted in the resignation of Boeing CEO Philip M. Condit and the termination of CFO Michael M. Sears. Harry Stonecipher, former McDonnell Douglas CEO, replaced Condit.

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 (from EADS). In October 2004 she was sentenced to nine months in jail for corruption, fined $5,000, given three years of supervised release and 150 hours of community service.

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 “violated the company’s Code of Conduct” and “would impair his ability to lead the company.” 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 the company had resorted to industrial espionage in 1998 to win the Evolved Expendable Launch Vehicle (EELV) competition. Lockheed alleged that former employee Kenneth Branch, who went to work for McDonnell Douglas and Boeing, passed 25,000 proprietary documents to his new employers. Lockheed argued that these documents allowed Boeing to win 21 of the 28 tendered military satellite launches.

In July 2003 Boeing was penalized, with the Pentagon stripping $1 billion worth of contracts away from the company and awarding them to Lockheed. Furthermore, the company was forbidden to bid for rocket contracts for a twenty-month period which expired in March 2005.

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. [2]

Airbus subsidy dispute

In October 2004, Boeing filed a complaint at the World Trade Organization, claiming that Airbus had violated a 1992 bilateral accord when it received what Boeing deems as “unfair” subsidies from several European governments. Airbus retaliated by filing another complaint, contesting that Boeing had also violated the accord when it received tax breaks from the U.S. Government. Moreover, the E.U. also complained that the investment subsidies from Japanese airlines violated the accord.

On January 11, 2005 the two parties (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 retaliated against Boeing, reopening the dispute and also accusing Boeing of receiving subsidies from the US government.

Product developments

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Airbus-Boeing competition: Plane net orders 2002-2005

Finally, Boeing achieved several consecutive successes, beginning with the formal launch of the 787 for delivery to All Nippon Airways and Air New Zealand. Currently, the 787 orderbook stands at over 404 airplanes.

Boeing also received the launch contract from the US Navy for the Multimission Maritime Aircraft, an anti-submarine warfare patrol aircraft. Several orders for the Wedgetail AEW&C airplanes are expected as well.

In November 2004, Boeing announced it will offer a cargo version of the popular 777 model, based on the 777-200LR. Boeing launched the Boeing 777 Freighter in May 2005 with an order from Air France. Other customers rumored to be interested include Lufthansa, EVA Airways, ILFC, GECAS, Air Canada and Emirates.

Boeing has achieved above projected orders for its 787 Dreamliner, outselling the rival Airbus A350. A large blow to Airbus came as Emirates Airlines president Tim Clark stated that his airline must be convinced that the 250 to 290-seat A350 would not repeat the “misses” by Airbus in performance and delivery. Emirates has held off ordering either airplane as it tries to convince Boeing to build a larger version of the 787, the 787-10 - which is the airline’s preferred option. Air Canada also dealt Airbus a blow by replacing its entire A330 and A340 fleet with 96 Boeing 777s and 787s.

Boeing officially announced in November 2005 that it would produce a larger version of the 747, the 747-8, in two models, commencing with a model for two cargo carriers with firm orders for the aircraft. The second model, slightly shorter than the cargo version but still longer than the 747-400, dubbed the Intercontinental, would be produced for passenger airlines that Boeing expected would place orders in the near future. Both models of the 747-8 would feature a lengthened fuselage, new, advanced engines and wings, and the incorporation of other technologies developed for the 787.

Boeing’s most successful new aircraft measured by recent orders remained the 737, for which it received orders totaling 387 new units in 2005 as reported on August 7. The 737-900ER is the latest version of the venerable plane offered by Boeing and is the largest model of the 737 line at a length of 138 feet.

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 (21,601km) during its 22-hour 42-minute flight.

Realizing that increasing numbers of passengers have become reliant on their computers to stay in touch, Boeing is offering Connexion by Boeing, an Internet connectivity service that promises air travelers unprecedented access to the World Wide Web. The company debuted the product to journalists in 2005, receiving generally favorable reviews.

Future Concepts

In May 2006, four concept designs being examined by Boeing were outlined in the Seattle Times. Codenamed after the well-known Muppets (the design team is known as the Green Team), the designs concentrated primarily on reducing fuel usage. All four designs illustrated rear-engine layouts. "Fozzie" employs open rotors and would offer a lower cruising speed. "Beaker" has very thin, wide 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. "Honeydew" with its delta wing design, resembles a marriage of the flying wing concept and the traditional tube fuselage. As with most concepts, these designs are only in the exploratory stage intended to help Boeing evaluate the potentials of such radical technologies.

Divisions

The two largest divisions are Boeing Commercial Airplanes and the Integrated Defense Systems. Note Integrated Defense Systems is Boeing's space and defense division.

AviationPartnersBoeing, a 50/50 joint venture with Aviation Partners, Inc.
Boeing Australia, Ltd.
Boeing Capital
Boeing Commercial Airplanes
- Aeroinfo Systems
- Airspace Safety Analysis Corporation
- Alteon Training, formerly FlightSafetyBoeing
- Continental Datagraphics
- Jeppesen, formerly Jeppesen Sanderson.
- SBS International
Boeing Integrated Defense Systems
- United Launch Alliance (with Lockheed Martin, subject to US Government approval as of 01/2006)
- United Space Alliance (with Lockheed Martin)
- Boeing Satellite Systems
- Sea Launch (40%)
Boeing Realty
Boeing Technology
Boeing Shared Services Group
Boeing Travel Management Company
Connexion by Boeing
Preston Aviation Solutions

Employment Numbers

Employment By Location

Employment By Location
Arizona	4,939
California	31,457
Kansas	3,836
Missouri	16,429
Pennsylvania	4,706
Texas	5,376
Washington	61,042
Other Locations	24,955
Total Company	152,740

As of 10/06/2005

Employment by Group (Division)

Employment By Group (Division)
Commercial Airplanes	48,956
Boeing Capital Corp	131
Connexion by Boeing	753
Integrated Defense Systems	75,531
Phantom Works	4,409
Shared Services Group	21,020
World Headquarters	1,928
Other	12
Total Company	152,740