Did Boeing Back Itself Into A Corner?

Boeing Commercial Aircraft has made such a big noise about its newest commercial aircraft prospect, the 7E7 Dreamliner, that it may be too late to back out.

Boeing's board of directors is scheduled to decide whether the company will push forward with the project at its meeting December 15th. New Boeing CEO Harry Stonecipher said last week that he fully supports the new project. Already, the company has staged a worldwide competition to name the aircraft, a nationwide competition for a community in which to base its assembly plant and has divided work on the project among several different countries. It looks for all the world like the only thing left is to sign on the bottom line.

"The board almost has no choice," says Richard Aboulafia. He's an aviation analyst at Teal Group, a consulting company. "They're set up for embarrassment if they don't. ... Face is involved here. Politics is involved here."

Indeed, as far as Boeing's image is concerned, the Dreamliner is a much-needed project, Aboulafia says. With the 767 "supertanker" project on hold pending a DOD investigation, the recent EELV scandal and a probe into how Boeing beat out Raytheon for a missile shield contract, Aboulafia says Boeing needs all the PR help it can get.

Even worse, Boeing's reputation in the commercial aircraft marketplace is at stake. So says Michel Merluzeau, principal analyst with New York-based market research firm Frost and Sullivan. "Boeing will not be a player in the commercial aircraft market if this project does not go ahead."

The 7E7 would be Boeing's first new commercial aircraft since the 777 was introduced in 1990. Many analysts see the Dreamliner as practically the only way Boeing will continue to compete with Airbus. The European aviation consortium is forecast to overtake Boeing as the world's top-selling commercial aircraft manufacturer next year.

But the way Boeing has gone about raising awareness of the 7E7 may make the airline some enemies down the road. Putting the location of its assembly plant up for bid among communities across America means there will be a lot of disappointment when the winner is announced. One newspaper reports the choice will be Everett (WA). That would be a big let-down for other competitors -- most notably, Wichita (KS).

"We have been working in every possible way to make this happen here for Boeing in Kansas," said Nicole Corcoran, a spokeswoman for Kansas Governor Kathleen Sebelius. "We would be very disappointed if it doesn't go ahead."

FMI: www.boeing.com