Boeing’s COO goes to Washington

The heir-apparent to run the Boeing Co. told U.S. senators last week that the aerospace manufacturer is cutting costs to stay competitive in the global market, and he highlighted how Uncle Sam helps it compete.

Demand for commercial airliners is expected to stay high in the next 20 years, but “competition with Airbus, our principal competitor, is particularly fierce, and airplane manufacturers in Canada, Brazil, Russia and China are all, in one way or another, soon to enter markets currently served by Boeing products,” Boeing Chief Operating Officer Dennis Muilenburg said during a Senate aviation subcommittee hearing on Thursday.

“Some 80 percent of our commercial airplane sales, and nearly 30 percent of our defense and space sales, are outside of the United States,” he said.

The Chicago-based company has a huge order backlog, worth $441 billion, including more than 5,000 orders for commercial airplanes worth $374 billion at list prices.

“The aviation market is broader and deeper than it was in the past, with demand being fueled by growth in China, India and other emerging markets, as well as by rapidly growing low-cost carriers and legacy carriers which want to modernize their fleets,” Muilenburg said. “Our biggest challenge is to meet this demand, regain market share from aggressive competition, and have the profitability to invest in future products. For that reason, we are increasing the production rates across our 737 and 787 lines, as well as adding new models with the 787-9 and -10, 737 MAX, and the 777x.”

To stay competitive, Boeing has to cut costs, he said.

Muilenburg thanked members of the International Association of Machinists and Aerospace Workers (IAM) in metro Puget Sound and St. Louis for approving contracts that cut the company’s labor costs.

“I cannot stress enough how important these agreements are to our collective future, or how grateful we are that members of the IAM recognize how intensely competitive the global aerospace industry has become. With agreements like these, we can and will move forward with confidence in our future as the world’s leading aerospace company,” he said.

He also noted the company’s efforts to get suppliers to cut costs.

Boeing also relies on a global supply chain to keep costs down, he said. “It comes down to this: To ensure that we continue to design and build the best commercial airplanes and aerospace systems in the world we must seek out the best technologies, material resources and skills in the world, wherever they reside. In addition, global partnering is critical to Boeing’s success in foreign markets where there is an expectation that we invest as well as sell.”

But “while 80 percent of our commercial airplanes go to airlines outside the United States, 80 percent of our supplier spend is with U.S. companies,” Muilenburg said.

Dan Catchpole: 425-339-3454; dcatchpole@heraldnet.com; Twitter: @dcatchpole.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Black Press Media operates Sound Publishing, the largest community news organization in Washington State with dailies and community news outlets in Alaska.
Black Press Media concludes transition of ownership

Black Press Media, which operates Sound Publishing, completed its sale Monday (March 25), following the formerly announced corporate restructuring.

Maygen Hetherington, executive director of the Historic Downtown Snohomish Association, laughs during an interview in her office on Thursday, Feb. 15, 2024, in Snohomish, Washington. (Ryan Berry / The Herald)
Maygen Hetherington: tireless advocate for the city of Snohomish

Historic Downtown Snohomish Association receives the Opportunity Lives Here award from Economic Alliance.

FILE - Washington Secretary of State Steve Hobbs poses in front of photos of the 15 people who previously held the office on Nov. 22, 2021, after he was sworn in at the Capitol in Olympia, Wash. Hobbs faces several challengers as he runs for election to the office he was appointed to last fall. (AP Photo/Ted S. Warren, File)
Secretary of State Steve Hobbs: ‘I wanted to serve my country’

Hobbs, a former Lake Stevens senator, is the recipient of the Henry M. Jackson Award from Economic Alliance Snohomish County.

Mark Duffy poses for a photo in his office at the Mountain Pacific Bank headquarters on Wednesday, Feb. 14, 2024 in Everett, Washington. (Annie Barker / The Herald)
Mark Duffy: Building a hometown bank; giving kids an opportunity

Mountain Pacific Bank’s founder is the recipient of the Fluke Award from Economic Alliance Snohomish County.

Barb Tolbert poses for a photo at Silver Scoop Ice Cream on Thursday, Feb. 29, 2024 in Arlington, Washington. (Annie Barker / The Herald)
Barb Tolbert: Former mayor piloted Arlington out of economic brink

Tolbert won the Elson S. Floyd Award, honoring a leader who has “created lasting opportunities” for the underserved.

Photo provided by 
Economic Alliance
Economic Alliance presented one of the Washington Rising Stem Awards to Katie Larios, a senior at Mountlake Terrace High School.
Mountlake Terrace High School senior wins state STEM award

Katie Larios was honored at an Economic Alliance gathering: “A champion for other young women of color in STEM.”

The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
Westwood Shipping Lines, an Everett mainstay, has new name

The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

A Keyport ship docked at Lake Union in Seattle in June 2018. The ship spends most of the year in Alaska harvesting Golden King crab in the Bering Sea. During the summer it ties up for maintenance and repairs at Lake Union. (Keyport LLC)
In crabbers’ turbulent moment, Edmonds seafood processor ‘saved our season’

When a processing plant in Alaska closed, Edmonds-based business Keyport stepped up to solve a “no-win situation.”

Angela Harris, Executive Director of the Port of Edmonds, stands at the port’s marina on Wednesday, Jan. 24, 2024, in Edmonds, Washington. (Ryan Berry / The Herald)
Leadership, love for the Port of Edmonds got exec the job

Shoring up an aging seawall is the first order of business for Angela Harris, the first woman to lead the Edmonds port.

The Cascade Warbirds fly over Naval Station Everett. (Sue Misao / The Herald file)
Bothell High School senior awarded $2,500 to keep on flying

Cascade Warbirds scholarship helps students 16-21 continue flight training and earn a private pilot’s certificate.

Rachel Gardner, the owner of Musicology Co., a new music boutique record store on Thursday, Jan. 18, 2024 in Edmonds, Washington. Musicology Co. will open in February, selling used and new vinyl, CDs and other music-related merchandise. (Olivia Vanni / The Herald)
New Edmonds record shop intends to be a ‘destination for every musician’

Rachel Gardner opened Musicology Co. this month, filling a record store gap in Edmonds.

MyMyToyStore.com owner Tom Harrison at his brick and mortar storefront on Tuesday, Sept. 6, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Burst pipe permanently closes downtown Everett toy store

After a pipe flooded the store, MyMyToystore in downtown Everett closed. Owner Tom Harrison is already on to his next venture.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.