CEO says Boeing 'turned corner' in '06, to overtake Airbus soon

Cheif Executive Jim McNerney told shareholders Boeing is enjoying almost unparalleled success.


Chicago — On Monday, Boeing Co. Chief Executive Jim McNerney said the aerospace company "turned the corner" in 2006 and is on pace to overtake rival Airbus as the world's largest commercial airplane maker within a year.

McNerney spoke at the company's annual shareholders meeting at a time when Boeing is enjoying almost unparalleled success in its commercial aircraft and defense businesses and distancing itself from the scandals of recent years.

After posting a 2006 profit of $2.2 billion amid a 15 percent jump in revenue to $61 billion, the Chicago-based company last week beat Wall Street's projections with a 27 percent rise in first-quarter earnings and 8 percent higher sales.

Much of its momentum is due to a flood of orders for the more fuel-efficient new 787. The first 787 is scheduled to be unveiled on July 8 — the calendar equivalent of 7-8-7 — with the initial test flight planned in late summer.

The annual meeting was noteworthy for being largely devoid of the troublesome issues that have dogged the company in recent years, such as ethics scandals and CEO turnover. Boeing helped hasten the end of the ethics clamor by agreeing to pay the government a record $615 million following a three-year investigation into its defense contracting practices.

McNerney told shareholders that last year was "a year in which we turned the corner and positioned ourselves for a very exciting future." He said 2007 is "off to a good clean start."

Boeing surpassed Airbus in plane orders in 2006, but the European company delivered more aircraft and held its position as the world's top airplane manufacturer. Asked in a media session afterward when Boeing would reclaim the No. 1 spot, McNerney said the math would say end of this year, beginning of next. But he declined an opportunity to take a potshot at the rival airplane maker, whose lengthy delays with its superjumbo A380 sent many orders to Boeing instead.

"They have gone through some difficulties the last couple of years, but we've had times in our history where we've run into difficulties. I'm convinced they'll get through them and they're going to be the formidable competitor they've been over the last couple of decades," McNerney said.

"I don't exult in their difficulties at all," he said. Boeing shares, which rose 26 percent in 2006, fell $1.02 to close at $93 on the New York Stock Exchange. They reached an all-time high of $95.58 last Thursday.

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