DoD Buzz l Boeing’s CEO warns Washington: Get your act together

May 9, 2012 § Leave a comment

Boeing CEO Jim McNerney warned Tuesday that the threat of next year’s automatic, across-the-board budget growth reductions might force him to lay people off — even before the guillotine actually falls.

Big B, like all of America’s corporate titans, hates “uncertainty,” and Congress has outdone itself this time, McNerney said.

“Sequestration is the greatest example of Washington-induced uncertainty I’ve ever seen in my life,” he said. “Our reaction is to be very conservative … We have to anticipate the worst and hope for the best.”

In the meantime, Boeing is throwing its influence against sequestration — and behind a few other key issues — because the stakes are too high for it to sit out, McNerney said. (As though it could!)

“We’re in D.C. because you have to be engaged in the dialogue,” he said. “If you’re not engaged, you’re going to be a loser. The fact is, that is the situation we have today.” He did not give specifics about how he wants Congress to resolve sequestration, just that he wants it resolved.

McNerney spoke at a conference sponsored by The Atlantic at Washington’s National Airport, where the star attraction was Boeing’s new 787 airliner. The company does more commercial aircraft business than defense business, but the future of both would be weakened if Congress can’t avert the $500 billion in reduced defense budget growth set to take effect in January. Boeing is counting on building KC-46A tankers for the Air Force — which use its 767 airliner body — as well as P-8 Poseidon patrol planes for the Navy — which use its 737 airliner — as well as F/A-18Es and Fs; E/A-18Gs; and, who knows, maybe a bomber? Plus there’s space, and unmanned aircraft, and helicopters, and the list goes on and on.

But sequestration wasn’t the only target on McNerney’s scope Tuesday. He also wants Washington to reform the way it handles visas and immigration, to make it easier for Boeing to hire and retain skilled foreign workers for its operations in the U.S. And he’s also on the “STEM” bandwagon, urging governments to do a better job getting kids interested in science, technology, engineering and math, so they’ll grow up to become brilliant aircraft engineers for Uncle B.

The problem is that for as much pull as McNerney’s company has inside the Beltway — and other key places — he can’t give direct marching orders to get what he wants. McNerney acknowledged that Washington today is “gridlocked,” and that the rest of the world is gaining speed much quicker than the U.S. On the commercial aviation side, for example, he expects a Chinese competitor someday soon to break up the “duopoly” between Boeing and its European arch nemesis, Airbus.

American can regain its edge, McNerney said: “I don’t think things will continue the way they are … I think things will rebalance over time.” Still, he warned: “I just hope we survive the operation.”

By Philip Ewing

May 8th, 2012

DoD Buzz l Boeing’s CEO warns Washington: Get your act together

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