Summit Notebook

Would you send a postcard of Boeing’s new Dreamliner?

For some fans, Boeing’s first test flight of its new 787 Dreamliner this week was apparently a virtual postcard.

The aerospace company says people sent about 25,000 postcards electronically of the lightweight commercial plane made primarily from carbon-based plastics and titanium.

About 1 million people logged in to watch the take-off and landing, observing the long-delayed first flight from about 13,000 cities and about 200 countries, the company says.

Dennis Muilenburg, chief executive officer of Boeing Defense Systems, watched from St. Louis — about 2,000 road miles from Seattle where the flight happened — in a Webcast meeting with about 100 employees who had a live feed from the event.

“I can tell you we all took great pride in seeing that first airplane get into the air. And I’ve been working in this business for 20-some years and one of the best things about this business is being able to witness a first flight. There’s nothing else like it,” Muilenburg said in a telephone interview at a Reuters Aerospace and Defense Summit.

“And yesterday’s event just reinforced one of the great aspects of our business, and that’s being able to see a first flight. I saw it virtually yesterday, but I can tell you we all paused to enjoy the moment,” he said.

AUDIO – Cash is king

And for Boeing Co’s customers, saving cash is becoming increasingly important.

It’s long been one of the great mysteries of the defense game about whether companies that make a lot of the stuff used for defense and security, might be able to ratchet down their pricing when, economically at least, it was a rainy day.

Because now, it’s raining buckets.

Jim Albaugh, head of Boeing’s defense business, said on Wednesday at the annual Reuters Aerospace and Defense Summit that his crew was working with their customers (many of whom are strapped for cash) to create a more affordable line of products.

Now, this is not a President’s Day Sale at Macy’s. Albaugh’s planes and weapons cost in the hundreds of millions of dollars and some programs are in the multibillion-dollar range. So cost-cutting here can mean some pretty big numbers.

But Albaugh went through a number of programs that Boeing is involved in and gave some good examples of how the company was trying to save their customers some cash. He also responded to some of the concerns about the costs of some programs already in place. 

Aero and Defense is the final Reuters summit of the year. In 2008, Reuters has had 33 summits around the globe and have as many or more planned for 2009. Our previous gathering, Reuters Investment Outlook Summit, provided clients with an excellent look at how to manage through what will certainly be a challenging 2009.

Boeing may see benefit from strike as demand slows

An eight-week strike by machinist workers at commercial aircraft maker Boeing delayed production and may cut profit by hundreds of millions of dollars. But a major aircraft leasing company in the Gulf Arab state of Kuwait – and a Boeing client – sees one possible benefit to the company. A global industry downturn is forcing manufacturers to slow down growth plans and control capacity, Ahmad A. Alzabin, chairman of Kuwait-based Alafco Aviation Lease and Finance Co. told a Reuters summit. “Probably with Boeing they’ve been somehow more fortunate with the strike that was going on for two months. This absorbed some of the excess capacity that had happened.”