Boeing on track for success

SEATTLE -- Boeing Co.'s strategy of building a diverse aerospace company is on track despite a recent ethics scandal that led to an executive shake up, the chief executive of Boeing's commercial airplanes division told investors Tuesday.\n"Clearly, we've had some issues that we've moved aggressively to deal with," Boeing Commercial Airplanes chief Alan Mulally said at an aerospace conference hosted by Bear Stearns Tuesday in New York.\nStill, he said, "our strategy is on track."\nThe Chicago-based aerospace giant has spent the last few years working on broad plans to become a more diverse company that is less dependent on its Seattle-based commercial airplanes division.\nThe shift has come as the company has grappled with a massive downturn in the airline industry, prompted by the weak economy, the Sept. 11, 2001, terrorist attacks and the war in Iraq. On Tuesday, Mulally called the downturn "the deepest and longest cycle that we have experienced."\nIn 2003, amid the weak market, rival Airbus surpassed Boeing on airplane deliveries for the first time. That same year, revenue for Boeing's defense business surpassed its commercial business.\nMulally said in a speech broadcast over the Internet that the company expects to deliver about 285 airplanes this year and in 2005, just slightly more than in 2003. Revenue for the commercial division will be about $20 billion in 2004, he said, slightly below 2003 levels, and will be slightly higher than $20 billion in 2005.\nBoeing expects to snag a launch customer for its planned new 7E7 airplane "sooner rather than later" this year, he said, adding that the airplane remains on scheduled to fly in 2008.\nBoeing is making a big bet on the 7E7, a 200-plus-passenger airplane designed to compete with Airbus' A300 series and to replace Boeing's older 757 and 767. Boeing believes airlines will want smaller, more efficient jets that will get people to their destinations directly.\nBoeing rival Airbus is counting on the 550-passenger A380, a massive jet designed to pack lots of customers onto flights between major hubs.\nBoeing also is has been dealing with a probe into possible ethical misconduct by former executives. The investigation has to do with whether Boeing improperly received pricing information about Airbus, to win a deal to lease and sell 100 jets to the Air Force for use as refueling tankers. The ethics scandal led to the firing of two top executives and the resignation of former chief executive Phil Condit.