Capt.Fantastic
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Boeing: Euro Defense Operations Not Top Priority

Thu Jun 26, 2003 8:27 am

Boeing CEO: Bolstering Euro Defense Operations Not Top Priority
June 25, 2003: 6:37 a.m. EST

LONDON -(Dow Jones)- Expanding its European defense operations is an aim for Boeing Co. (BA) but not the U.S. aerospace and defense group's highest strategic priority, Chairman and Chief Executive Philip Condit said Wednesday.

Speaking to reporters in London, Condit said Boeing's top priorities are the development of a new passenger aircraft and capitalizing on the huge U.S. defense market.

"It's on the list... It's not on the top," Condit said when asked if Boeing is aiming to bolster its European defense business possibly through mergers or acquisitions.

Boeing has long been viewed as a potential merger partner or acquirer of U.K. defense contractor BAE Systems PLC (U.BA) although Condit repeated Wednesday the group isn't actively pursuing a merger with BAE. Condit reiterated, however, that BAE Systems remains an "interesting" company as far as potential European partners go.

Condit said Boeing is only at the analytical stage with a view to any future alliance with BAE Systems. "What do we think it's worth? Might there be something there? No more than that," Condit said.

"The truth is we are constantly evaluating strategic opportunities," Condit said, adding that the company is always looking at what deals could create value for Boeing and its shareholders.

Condit said he hadn't spoken to U.K. Prime Minister Tony Blair or Defense Minister Geoff Hoon with regard to a potential deal with BAE Systems. "You have to have something to discuss," Condit said.

Condit reiterated that he believes there's now a high probability that Boeing's board will approve the development of a new fuel-efficient airliner branded the Dreamliner or 7E7. The board is likely to decide at the end of this year, he said.

Boeing isn't disclosing the level of the expected investment for the Dreamliner.

Turning to the aircraft market, Condit said there are signs of a pick-up in forward bookings but stressed "there are still unknowns ahead."

Boeing expects to deliver about 280 commercial aircraft this year compared with 381 jets in 2002. Arch rival Airbus (F.ABI) meanwhile expects to deliver around 300 jets compared with 303 in 2002.

Last week, Airbus picked up some large new plane orders from Middle East carriers Emirates Airlines (C.EA) and Qatar Airways.

Company Web site: http://www/boeing.com

-By Rod Stone, Dow Jones Newswires; +44 207 842 9295; rod.stone@dowjones.com
 
bobrayner
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RE: Boeing: Euro Defense Operations Not Top Priority

Thu Jun 26, 2003 8:50 am

Interesting; thanks for the detail!

The European defence industry still needs more consolidation, I think.

Obviously, defence buyers like to shop near home wherever possible - and it's not just protectionism - so it's only common sense that Boeing will find much better opportunities in the USA than in Europe, especially given the former's swollen defence budget.

BAe has a (complex) connection to Airbus and has fingers in other pies, so there could be scope for conflicts of interest; certainly the monopoly / merger authorities would investigate anything like a takeover/merger.
Remember GE / Honeywell?

Sorry... you've probably thought of most of this already.  Smile
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LZ-TLT
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RE: Boeing: Euro Defense Operations Not Top Priori

Thu Jun 26, 2003 9:02 am

No rants intended, but it seems to me, Condit is speaking in streamlined diplomatic language, so the things he sais don't match the truth about what's going on. So, an attempt to translate it in normal language might sound like that:

Said:
"It's on the list... It's not on the top,"
Translates to:
"This is wishful thinking. Maybe someday(or never), but definitively NOT now"

Said:
"The truth is we are constantly evaluating strategic opportunities,"
Translates to:
"What's this crap you ask me about?" or "I don't know anything about it"

My 2 €-cents worth.

[Edited 2003-06-26 02:03:16]
 
L-188
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RE: Boeing: Euro Defense Operations Not Top Priority

Thu Jun 26, 2003 10:46 am

Considering the defense spending isn't a priority for Europe, there isn't that many dollars for them to chase after.
OBAMA-WORST PRESIDENT EVER....Even SKOORB would be better.
 
jwenting
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RE: Boeing: Euro Defense Operations Not Top Priority

Thu Jun 26, 2003 5:42 pm

European defense spending is at an alltime low and dropping.
There's little sales to expect in the next decade or so, most likely less than the investment Boeing would need to do to make those sales.

Therefore it's better NOT to try to sell...

With the German AF comitted to Eurofigter and A400, Brittain to Eurofighter and C-130J (no Boeing product), the Netherlands Norway Denmark and Belgium working hard to dismantle their entire defense operations, France as usual contemplating only French products, and the rest out of funds to purchase anything (or already having decided for the next decade) there's simply nothing to sell.

The only markets still buying military hardware in quantity are southeast Asia and Africa...
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keesje
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RE: Boeing: Euro Defense Operations Not Top Priority

Thu Jun 26, 2003 8:25 pm

Well lets not forget the "New Europe" ....

Boeing expects to deliver about 280 commercial aircraft this year compared with 381 jets in 2002. Arch rival Airbus (F.ABI) meanwhile expects to deliver around 300 jets compared with 303 in 2002.

I'm always amazed how B717 & A380 are add up in order counts & the public eats it ...

Seems like Boeing is more & more leaning on Pentagon funding after 9-11 and the new US "Colonialism" ..



"Never mistake motion for action." Ernest Hemingway
 
jwenting
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RE: Boeing: Euro Defense Operations Not Top Priority

Thu Jun 26, 2003 8:41 pm

Keesje, we're talking specifically military projects here, while you're talking about only airliners.
Get it? Your anti-US anti-Boeing attitude is not in place here!
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bobrayner
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RE: Boeing: Euro Defense Operations Not Top Priority

Fri Jun 27, 2003 5:09 am

Brittain to Eurofighter and C-130J (no Boeing product)
This is very misleading. The RAF have fallen in love with their C-17s, for example.

The only markets still buying military hardware in quantity are southeast Asia and Africa...
Often with even stronger budget constraints!
(with notable exceptions like Malaysia)

Otherwise, I agree with you 100%  Smile
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jwenting
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RE: Boeing: Euro Defense Operations Not Top Priority

Fri Jun 27, 2003 6:17 am

Indeed Brittain loves the C-17, but no budget available or planned to purchase more of them (and if there was, no marketting effort needed).

Most African and Asian nations have little budget constraint, as they'll just use all the foreign aid they get from Europe and the US to buy the stuff.
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