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; firstname.lastname@example.org