Boeing In the late 90s when so many companies were making so much money and so much business travel was happening, Boeing had a backlog of about 2 years - yet they were not profitable. They also suffered strikes by the machinist's union and the white collar workers (engineers and designers not unionized). They suffered a serious lawsuit by their African American professional staff. All the while the world bought proportionally more Airbus and proportionally fewer Boeing. This year, 2004, is the first year that Airbus has outsold Boeing in airliners.
Airbus has just sold 20 more jets to a Chinese airline, not long after selling 21 jets to another Chinese airline. [1] (The first order was accompanied by an option for 10 more for an unnamed Chinese company.)
China is also getting small subcontracts to provide part for the upcoming A380 giant jet.
Boeing is embroiled in a serious procurement scandal on Capitol Hill that is being overshadowed by the war and other allegations of corruption. In this corruption scandal swirling around the attempts by Boeing to get the Pentagon and the Air Force to lease new military tankers instead of buying them at a lower cost, and several execs including the CEO have gone down. (The CEO replacement is the previous CEO, who was even worse in labor relations than the one just departed.)
This procurement deal was a favorite with Air Force brass and some Pentagon officials - one of whom left the Pentagon for Boeing for a sweet deal that included a low interest housing "loan" and a vice presidency.
The Senate committee that discovered the corruption is led by John McCain, who did not buckle under intense lobbying by Boeing, the Air Force and the Pentagon.
Boeing faces fines and penalties and is being investigated by the Pentagon, under the mandate of the Secretary of Defense.
Boeing's corruption problems don't end there though. They were recently found guilty of corporate espionage against their archrival Lockheed in the missile launch business. Despite Boeing's best attempts to cover up for two years, the truth was out and they were banned from the launch business for nearly three years (iirc). Not surprisingly the ban was immediately suspended, but this game has yet to play out.
So the pride and joy of American commercial and military aerospace is having problems, albeit self-inflicted. Somehow I doubt the world market will wait for them to gather themselves back up and get back into the dominant position they once had. Of course Boeing is still a huge player in military aircraft (despite complaining about the EU subsidizing the Airbus consortium), but they just lost a major design contract for the new fighter.
[1] <http://www.latimes.com/business/la-fi-rup12.1jun12,1,7573277.story?coll=la-headlines-business>
Airbus Gets Chinese Order for 20 Jets
From Reuters
June 12, 2004
European plane maker Airbus won an order for 20 of its A330-300 wide-body jets, its second large deal with a Chinese carrier in two months and a boost in its competition with rival Boeing Co.
The order is valued at more than $2 billion. Airbus said deliveries of the aircraft to Shanghai-based China Eastern Airlines Co. would start in the first quarter of 2006.
In April, China Southern Airlines Co., signed a deal for 21 A320 and A319 jets.
European Union transport ministers have rejected a U.S. offer of a landmark aviation agreement and want further negotiations, saying an "open skies" pact should give EU carriers more access to the U.S. market.