Boeing taking orders for 7E7, a lighter-weight jetliner
By Gene Johnson
Associated Press
SEATTLE — The Boeing Co. will begin taking orders for its first new jet design in 13 years, the 7E7 Dreamliner, as the aircraft manufacturer works to regain industry leadership from European rival Airbus by pinning its future on a lighter, roomier, more fuel-efficient plane.
Associated Press
Yesterday's announcement of plans to sell the midsize passenger jet came after a two-day meeting of the company's board of directors and just two weeks after a top-level management shake-up forced by an ethics scandal and worries about Boeing's direction.
The 7E7 Dreamliner, displayed as a model at a briefing last month, would be able fly 250 people 8,300 miles nonstop. It's how Boeing will compete with the Airbus.
The jet — to be built in Everett, Wash., where Boeing has built planes for decades — is designed to compete with Airbus' A300 and A310 and to replace Boeing's older 757 and 767.
The announcement ended an intense rush by other communities to land the assembly work for the new jet. The 7E7 eventually will come in three models and fly 200 to 250 people up to 8,300 miles nonstop.
The jet can't be formally launched until mid-2004 or even enter the market before 2008. But a decision to begin offering it for sale is an important landmark for a company that has been overtaken by Airbus in the airplane-manufacturing business it had long ruled.
Using more composite materials than metal, the plane would weigh less and use 20 percent less fuel than other models. It also would have bigger windows and slightly wider aisles and seats than other planes.
Boeing had not approved any all-new airplane program since the 777 model in 1990. Pressure to commit to the 7E7 had grown since the aerospace giant pulled away from launching the 747X and the Sonic Cruiser in the past three years, while Airbus was pulling even in the commercial airplane market.
New CEO Harry Stonecipher strongly endorsed building the 7E7 on his first day in the top post. Yesterday, Stonecipher said he's optimistic about the jet's prospects.
"We are 10 for 10 in bringing successful planes to market," he told a crowd of thousands of Boeing workers at a downtown convention center.
Everett was chosen as the building site over Kinston, N.C.; Charleston, S.C.; and Mobile, Ala.
Gov. Gary Locke and the Legislature were determined to win the project, especially since having been stunned two years ago by Boeing's decision to move its headquarters to Chicago.
This past summer, they agreed to grant the aerospace industry tax breaks totaling $400 million through 2009 — and potentially worth $3.2 billion over 20 years — if Boeing built the 7E7 in their state.
Washington state politicians were jubilant at the news.
"One hundred years ago this week, the Wright brothers launched the Age of Flight," noted U.S. Sen. Patty Murray. "Today we proved that Washington has the right stuff to lead the next century of aviation."
A plane the size of the 7E7 is in demand, an analyst said, adding that Boeing's decision likely will raise workers' morale.
"This is what they needed to do for a very long time," said Richard Turgeon of Victory Capital Management. "It's a good thing for the company all around."
Dave Goodmanson, who has done electronics work for Boeing for 17 years, said he was proud of Washington state's efforts to court the project.
"My dad worked for Boeing, and it's not anymore where Boeing sneezes and the whole city gets sick," he said. "But I certainly agreed with what the state of Washington did. Jobs is what it's all about. It'll pay off in the long run."
Japan Airlines, reportedly a potential launch customer for the 7E7, remains undecided, a spokesman said.
Boeing made presentations to the airline this fall and "we have been making our own internal study, as we will eventually need replacements for our older Boeing 767 aircraft and Airbus A300 types," JAL spokesman Geoffrey Tudor said in Tokyo. "We have made no decision or commitment on the 7E7."
Boeing has been battered by bad news since its move to Chicago, from the global aviation downturn after the 2001 terrorist attacks to recent scandals involving government contracts.
Former CEO Phil Condit resigned Dec. 1 amid a series of ethics scandals in the company's defense business.
Last month, Boeing fired its chief financial officer, Mike Sears, for unethical conduct, saying he negotiated the hiring of an Air Force missile defense expert while she was still working for the Pentagon and was in a position to influence Boeing contracts. Sears has denied any wrongdoing.
The company also dismissed the former Air Force official, Darleen Druyun, who was hired earlier this year as vice president and deputy general manager of Boeing's Missile Defense Systems unit.
The government also withdrew $1 billion in satellite contracts from the company in response to Boeing's admission that it had information about a rival's bid for the work.
The Pentagon also is reviewing a contract to acquire Boeing 767 refueling tankers that had come under harsh criticism in Congress over its price.
Boeing shares gained 73 cents to close at $39.93 yesterday on the New York Stock Exchange.
