Boeing's Bounce
Do you assume China will eventually build its own airplanes?
In a 20-year time frame, it's possible. Further out, it's likely.
Will that be a threat to Boeing?
Well, remember, it's not just about turning out airplanes. You also need an infrastructure all over the world to support the airplanes, and that costs a lot of money. Besides, China could end up not being a competitor. They could be a supplier. The horizontal and vertical tails on 737s are made in China. They also did the 757 tail.
Is the weak dollar helping Boeing?
If airplanes are priced in dollars-which ours are-that helps. But when we negotiate a deal, the whole thing is so complex that it's hard to take prices back to an exchange rate.
What kind of consolidation do you foresee in the airline industry?
Both the U.S. and Europe have struggled with getting more consolidated. There are 14 flag carriers in Europe. They probably need three or four or five, max. Same in the U.S. Now who they are, we'll wait and see. But we believe consolidation is good. You may not sell as many airplanes in the short run, but as airlines get more efficient, fares go down, demand goes up, they need more seats in the sky and more airplanes.
What did Boeing learn from 9/11?
We try to look at things that are predictable, then ask what we can do to mitigate it-to lessen pockets of timing, depth, and impact. We were already seeing a slowdown before 9/11. But not that deep. Then we announced we would drop production rates significantly. So now, we make sure we do constant work with our major suppliers. More centralized planning.
What risks do you foresee?
In North America, even if there's mediocre growth, airlines will still need replacement airplanes. Asia is more of a growth market. A slowdown there could have a bigger impact than in North America.
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