“Specific actions we are taking include streamlining organizational structures, reducing discretionary and capital spending, eliminating unnecessary work, and reviewing staffing levels, all to drive higher levels of productivity. Part of that, unfortunately, will mean reduced employment in certain areas of the company. We are targeting these reductions to exceed 6% of our current workforce, or approximately 10,000 positions to support our productivity efforts and infrastructure reduction. This will occur through a combination of attrition, retirements, reduction in some contract labor, and layoffs. While difficult decisions must be made, we will do as much as we can to assist our employees who are affected by them.Despite this challenging environment, our backlog is holding. In 2008, we had but six order cancellations at BCA and accommodated about 110 aircraft deferrals. The deferrals represent about 3% of our commercial backlog, which is not out of the norm. We do expect to see an increase in the numbers of deferral and cancellations in 2009. However, the size, diversity and quality of our backlog provide greater flexibility than we’ve had in the past to accommodate our customers.As you all know, the financing environment also remains challenging. Boeing Capital regularly examines overall financing capacity as well as specific financing sources for each aircraft to be delivered by BCA. In 2009, we believe financing sources are sufficient to meet expected requirements for our products. We are assuming in our guidance that BCC will need to do about $1 billion of new financing in 2009. The actual amount could be more or less, but we feel will be in a range that’s manageable.”
CEO Jim McNerney
