Taking flight
Boeing began as a small airplane manufacturing business in 1916, when William E. Boeing founded the Pacific Aero Products Company in Seattle, Wash. He changed the company's name to Boeing the following year. Several decades later, Boeing had grown into the world's top commercial jet maker. Today it is also the world's number one aerospace company and the number two defense contractor. In 2001, Boeing was the largest exporter in the United States, with revenues of more than $58 billion.
The jet-setters
William E. Boeing, with the help of friend George Conrad Westervelt, built his first plane in 1916: a single-engine seaplane with a top speed of 75 mph. The next year, During World War I, the U.S. Navy ordered 50 airplanes from Boeing. By the 1920s, Boeing had branched out into passenger and mail planes. After WWII, orders for military aircraft declined sharply and Boeing started focusing on jet airplane development, including commercial jet airliners. In 1967, Boeing introduced the 737, which later became the best-selling jetliner in history. But a recession in the aviation industry and a drop-off in space related business in the early 1970s hit Boeing hard. In the Seattle area alone, Boeing laid off more than half of its 80,000 workers between 1970 and 1971. Despite the hard economic times, Boeing continued to promote its commercial airplanes, while working on several key defense and space programs. It even expanded beyond aviation, into areas such as commercial computer products. In the 1980s, demand for passenger flights increased dramatically as did the demand for faster, quieter and more energy efficient airliners. Boeing met that challenge by producing the standard-body 757, the larger 767 and upgraded versions of the 737.
Go defense!
Under the leadership of Philip M. Condit, who became CEO in 1996 and Chairman in 1997, Boeing took giant leaps into the defense and space markets. The company bought Rockwell's aerospace and defense units for more than $3 billion in 1996. The following year, Boeing paid $16 billion for McDonnell Douglas, the world's largest military aircraft manufacturer. In 2000, Boeing bought Hughes Electronics' space and communications businesses for $3.75 billion. These acquisitions turned Boeing into the world's largest aerospace company.
New challenges
In 1998, the year after the acquisition of McDonnell Douglas, Boeing's employment peaked at more than 238,000 workers. But the merger soon resulted in the loss of some 30,000 jobs. Over the next few years, the company suffered shrinking profits because of a price war with its European rival, Airbus, and because of clogged production lines that resulted in late deliveries and penalties.
A move to the Windy City
In 2001 Boeing made a surprise announcement that it was moving its corporate headquarters out of the Seattle area. After two months of suspense, Boeing finally picked Chicago over Denver and Dallas/Ft. Worth as its new home base. In explaining the move, Chairman and CEO Philip M. Condit said, "We believe that having our world headquarters separate from any one of our major businesses will help us to achieve our goals of growing this company.'' Cost savings were also cited as a reason for the move. Denver and Dallas were also considered as potential headquarters. The move came as a blow to Seattle, where the company had been founded in 1916.
A big blow
The September 11 terrorist attacks dealt a huge blow to Boeing's commercial aircraft business. The attacks resulted in a sharp drop-off in travel, leading several airlines to delay or cancel their orders of Boeing aircraft. As a result, Boeing was forced to drastically cut production. For 2002, the company said it expected to deliver just 380 jets, down from 527 in 2001. The loss of orders also meant the loss of jobs. Boeing announced it would lay off up to 30,000 workers by the summer of 2002. These were on top of 30,000 job cuts just four years earlier.
Shot down
In October 2001, Boeing lost the U.S. government's huge Joint Strike Fighter contract to Lockheed Martin. The contract - the largest in the U.S. Defense Department's history - is expected to be worth at least $200 billion. Boeing said the loss of the deal would lower revenue by about $1 billion, to $55 billion in 2002.
New military deals
Although Boeing lost the Joint Strike Fighter contract in 2001, it did win several new, albeit smaller, military contracts in following months. In one deal, the company received $336.4 million from the U.S. Air Force to build the first two satellites in the Wideband Gapfiller Satellite (WGS) system. As part of the agreement, Boeing may build up to six satellites valued at some $1.3 billion. Boeing was also awarded a $770 million contract to build 11 swanky "Osprey" military helicopters.
Boeing broadband
By late 2002, passengers on board certain Boeing aircraft will be able to access a new service called "Connexion by Boeing". The service will provide real-time, high-speed Internet and Intranet access, e-mail, television and entertainment content. Boeing is already working with 17 airlines on implementing the service. Just what we all need - a way for our bosses to track us down on airplanes!
