Wednesday, May 5, 2010

The Boeing Company

Fact File:

Founders: William E. Boeing.

Distinction: Evolved with aviation industry from biplanes to Lunar


Primary Products: Commercial and military aircrafts, rockets, satellites.

Annual sales: $57.993 billion.

Number of employees: 197,000.

Major competitors: Airbus Industries, EADS, Lockheed Martin.

Chairman, President and CEO: Philip M. Condit; president and COO:

Harry C. Stonecipher.

Headquarters: Seattle, Wash.

Year founded: 1916.

For as long as there has been an aviation business, the Boeing

name has been part of it. Just a few years after the Wright brothers made

their first flight at Kitty Hawk, William Boeing attended the first American

air show in Los Angeles. He immediately saw the possibilities, and over

the next several years explored various facets of the exciting new

industry. He rode a biplane from atop a wing, took flying lessons from an

early barnstormer, and spearheaded the design of a seaplane. But when

he bought an old Seattle shipyard to open an airplane manufacturing

operation in 1916, his involvement became official.

Over the next eight-and-a-half decades, his Boeing Company

weathered an ebb and flow that spelled the end to most of its oncemighty

competitors. It did so by snagging virtually every opportunity that

surfaced-from the first U.S. mail air routes, to massive military contracts,

to domination of commercial aviation, to a major role in the space

program. It has long been the top producer of commercial jets and with

various acquisitions also became the largest aerospace company in the


While cyclical downturns over the years devastated one aircraft or

aerospace firm after another, Boeing battled back effectively with

imagination and diversification. For example, it began United Airlines and

employed the first female flight attendant and as an early global

enterprise developed customers in 145 countries. It vast litany of

innovations includes aviation icons as the B-52 bomber and 737

passenger plane (the best-selling jetliner in aviation history), along with

the Lunar Orbiter and Saturn V booster (launcher of Apollo spacecraft on

their journeys to the moon).

But none of the challenges Boeing has encountered provides

immunity from those it faces today. In fact, with the 21st century barely

underway, a European rival unveiled a super jumbo jet that siphoned

attention-and sales-from Boeing's existing alternative. Trade magazines

and Seattle-area newspapers speculated that without extraordinary effort,

Boeing might soon find itself the world's number-two plane maker. Not

surprisingly, Boeing prepared once again to fight back.

The Wright brothers made their historic first flight in 1903; the

same year Detroit native Wiliam Boeing left Yale Engineering College to

seek his fortune in the Pacific Northwest. The timber industry was red hot,

and the 22-year-old quickly struck it rich in the lush forests outside Grays

Harbor, Wash. After moving to Seattle, he heard about an air show in Los

Angeles. Boeing attended and fell in love with what he saw, and upon his

return began engaging a navy engineer named George Conrad Westervelt

in endless conversations about the future of flight.

Westervelt had taken aeronautics courses at MIT, and shared

Boeing's infatuation with air travel. The two flew on an early biplane-the

type requiring both pilot and passenger to sit on one wing-and pondered

variations at Seattle's University Club. Before Boeing left for California in

August 1915 to take flying lessons, he asked his friend to design a more

practical craft. Construction on the resultant twin-float seaplane, dubbed

B&W for the pair's last names, began soon after his return.

Boeing built a combination hangar-boathouse beside Lake Union.

During the first half of 1916 began construction on two B&W seaplanes.

The Navy sent Westervelt east before they were done, so Boeing finished

on his own. On June 15, he took the plane nicknamed "Bluebill" on its

maiden flight when the scheduled pilot didn't arrive on time. Exactly one

month later, he incorporated his airplane manufacturing business as the

Pacific Aero Products Company. He bought 998 of the 1,000 shares and

moved operations to the former Health's shipyard on the Duwamish River.

A year later, he changed the name of his business to Boeing Airplane


Bursting with optimism over his new enterprise, Boeing assembled a

28-peron staff of pilots, carpenters, seamstresses and other specialized

workers. The B&W didn't sell, but World War I was underway and for the

first time the United States was using airplanes in battle. Boeing knew the

Navy would need planes for training, and believed his Model C filled the

bill. Navy officials agreed following a Florida test flight, and ordered 50.

Boeing expanded his payroll to 337 to build them, but-in a pattern that

would become uncomfortably common in the years ahead-saw the order

cut in half as the war drew to a close. To keep afloat, he had workers

switch to building furnishings for local shops as well as a type of flatbottomed

boat called a sea sled.

Boeing wasn't through with planes, though. In 1919 he and a pilot

flew 60 letters from British Columbia to Seattle, marking the first

international air mail delivery into the United States. He built many new

commercial aircraft models over the next few years, including the first to

fly over Mount Ranier. The Army Air Service also placed a few healthy

orders for fighter biplanes, but Boeing knew that he had to come up with

a solid plane for producing and selling a steady number of products to a

wide variety of customers if he hoped to survive. To that end he bought

the Stearman Aircraft Company in Kansas, and opened Boeing Aircraft of

Canada and the Boeing School of Aeronautics in California. And in 1927-

the same year Charles Lindbergh made the first solo nonstop flight from

New York to Paris-Boeing contracted with the U.S. Postal Department to

run the coveted airmail route from Chicago to San Francisco.

At last, Boeing could efficiently use his planes while promoting them

to others. To operate a route that could effectively carry passengers along

with the mail, he founded Boeing Air Transport, the predecessor to United

Airlines. Bowing to Prohibition, his wife Bertha inaugurated the first flight

with orange-flavored soda water. During the passengers, took the 22-

and-one-half-hour trip. This helped kick start the idea of passenger air

travel and incite and demand that-in conjunction with military orders and,

later, space-related products-would keep Boeing on top for decades.

Much changed during ensuing years, but Boeing's continually broadening

lineup consistently dominated its fields. His companies built airplanes and

parts, including engines and propellers. They delivered mail. They

maintained airports. They ran airlines. When single-winged planes

replaced biplanes, Boeing's were first out of the hangar. His Yankee

Clipper inaugurated regular airmail service across the Atlantic. His

luxurious Stratoliner was remade as the military C-75 after the bombing

of Pearl Harbor. The next was the B-29, which dropped atomic bombs on

Hiroshima and Nagasaki. Government cancellations after the war again

led to massive layoffs, but this time orders for long-range civilian planes

replaced them, and the company pressed often kept the company going

full tilt. By the time William Boeing died in 1956, his aircrafts were

capable of circling the globe. And, for the first time, airlines wee carrying

more non-commuting passengers than trains.

The 1960s put America, and Boeing, on a new path. President

Kennedy promised a man on the moon, and the company loaned the

government 2,000 executives to help make it happen. Its Lunar Orbiter

scouted possible landing areas and its Lunar Roving explored the ground.

Its Saturn V first-stage booster launched the Apollo craft into space.

Boeing 707s was utilized for years to transport government officials. The

plane that carried the president world uses the call sign "Air Force One."

In 1962, two 707s were adapted specifically for use by the president and

were officially given the permanent call sign Air Force One. These models

served as the presidential aircraft until 1990, when they were replaced by

two new Boeing 747s.

But while it continued building more advanced airplanes, such as

the 490-passenger transatlantic 747 jumbo jet, Boeing also kept hitting

employment peaks and valleys. Nearly 50,000 workers were dismissed in

1970 when the United States abruptly ended its supersonic transport

program. Boeing responded by diversifying yet again, this time setting up

a computer services company, an irrigation project in eastern Oregon,

and a desalinization plant in the Virgin Islands. It also built three huge

wind turbines along the Columbia River, constructed voice scramblers for

police departments, and manufactured light-rail cars for several

municipalities. Obviously, the more things changed the more they stayed

the same.

But Boeing has remained primarily focused on commercial aircrafts,

military hardware, and various utilities related to space. Its leaders have

reiterated the company's long-term commitment to lead in all operational

areas, absorbing top competitors Rockwell International in 1996,

McDonnell Douglas in 1997, and the Hughes Electronics communications

satellite business in early 2000. An unprecedented 40-day strike by

engineers and technicians a few months later, however, badly impacted

commercial and military production. It also trimmed the company's value

by $5.3 billion.


The walkout left some bitterness on both sides, but the company

and its employees plunged ahead once more when it ended. Just a few

weeks after the strike, Boeing announced a new way for passengers to

surf the Net and check e-mail from their laptops during flight. Shortly

after, though, it was shaken once again by the announcement that its

arch-rival Airbus Industries had outsold it for the first time in new aircraft

orders. Further, a new Airbus super jumbo jet was attracting attention

and sales that previously went to Boeing's biggest transatlantic models.

In typical Boeing fashion, the company quickly trumpeted its

answer: the massive 747x Stretch. It hardly mattered that the Stretch

didn't yet exist; Boeing had pulled off much more difficult transformations

in the century since its founder discovered commercial aviation.

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