Speaking directly to 160,000 employees in a wide-ranging message
regarding the US financial crisis, Boeing CEO Jim McNerney
says the aerospace giant is well positioned to support financing of
aircraft purchases itself, if called upon to do so by its customers.The message, entitled "U.S. financial crisis: What does it mean for Boeing?" was obtained by FlightBlogger and its authenticity was confirmed by the company.
McNerney's message addresses four points: The stability of aircraft financing options, the impact of the bailout on the federal deficit and defense spending, the impact on airlines and global travel, and lastly the mindset of the Boeing workforce.
"Thus far, we've seen minimal impact and nothing to change our fundamental assumptions for delivering our record backlog. But we stand ready to help our customers, if needed. Over the past few years we have greatly reduced financial risk at Boeing Capital Corp.., which has strengthened its balance sheet substantially. So we are in a strong position to provide aircraft financing if necessary."According to Boeing, the company has not had to finance new aircraft purchases itself in more than two years.
"While we have seen a very slight increase recently in customers asking about the possibility of our financing their purchases, none have actually requested it yet. But it's a fluid situation, and we will continue to monitor it closely."
McNerney also addresses speculation on the impact of the financial crisis on the Integrated Defense Systems division, due to tightening budgets at the Pentagon forcing potential cutbacks in spending for military systems.
"No one really yet knows when or to what extent defense spending could be affected, but it's unrealistic to think there won't be some measure of impact."For airlines, McNerney sees the financial crisis as a double-edged sword, addressing the likelihood of deferred or canceled orders balanced against the demand for new fuel-efficient aircraft to offset rising oil prices.
"Our airline customers already are struggling to operate profitably under volatile and high fuel prices. A reduction in business and leisure travel would further damage their fragile health and potentially impact the sales of our airplanes and services. However, the flip side of the high fuel price coin is that demand in the market for our fuel-efficient new airplanes remains high, and we have seen few order deferrals or cancellations."McNerney urged his workforce to "anticipate and respond while staying focused on our customers."
In addition, McNerney acknowledges a potential short-term impact of the crisis:
"As we monitor the situation over the coming days and weeks, we will be taking a very close look at our plans for the balance of this year and 2009."Though not referenced specifically, a Boeing spokesman adds that "the situation" McNerney references includes, but is not limited to, the impact of the ongoing IAM strike, as well as plans for 787 first flight, certification and 2009 deliveries.
McNerney closes on a cautious, yet optimistic note in his message:
"This could turn out to be the "rainy day" we've been saving for--and must continue to save for."Read the complete message to employees
"In large part because of your ongoing efforts, Boeing is well positioned to weather it--even if our road contains some rough patches that may require us to step up and do even more."
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