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The Boeing Corporation

The Boeing Corporation

Introduction

The Boeing Corporation is one of the largest manufacturer of commercial and defense aircrafts corporations. It was started by William E. Boeing at around 1916 when with the help of George Conrad they made their first airplane that took off at sea. Boeing was initially not an engineer and after his studies he worked in the timber industry where he acquired skills that helped him to initiate and make an airplane. They did not manufacture airplanes that could carry people from one area to distant lands until 1938 when the first civil aircraft that had ninety passengers during the day and forty passengers during night flights.  The company over the years has increased in size and deliveries making it the largest airplane company in the world offering many job opportunities. Towards the end of the nineteenth century the Boeing Corporation and McDonnell Douglas joined together with their headquarters in Chicago.

Statement on the Boeing Corporation

This company has undergone tremendous changes since 1916 with acquisitions of many other companies with related technologies since 1927 when they merged with Pacific Air Transport. The latest merger was in 1997 when the joined hands with McDonnell Douglas which enhanced the company to be

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stronger and to be curb competition. In 1933 they introduced the first twin engine plane which was considered to be faster and safe. The company faced a challenge in 1934 when the government under the Air Mail Act prohibited airlines and manufacturers from being under the same corporate. This act forced the Boeing Corporation to be divided in to United Airlines, United Technologies and United Aircraft Corporation. The first commercial plane was made in 1938 the same tear when the first pressurized cabin transport air plane was finished. During the world War Two the Boeing Corporation was involved in the manufacture of bomber planes which were utilized mostly in the War. However, many people lost jobs because the demand of the bombers was extremely low and there fore the company had to cut off about 70,000 jobs. With advancements in technology the company was able to develop new planes like the jet liners, jetfighters and other commercial planes with modern technologies which has attracted more and more customers. The company has also been faced with a lot of competition especially by the airbus leading to relatively lower sales of the commercial planes.

Boeing Company has grown steadily for many of the decades but has been faced with mass losses mainly caused by numerous cancellations of the plane orders. This however has not made their revenues to reduce because of their highly developed integrated defense products. The company was however extremely strong in the past decades but this is becoming more of a dream because of the order cancellations and the competition from especially the Airbus. Boeing Corporation is doing well in the defense sector and this has been the reputation since the 1970s. They have been getting contracts to install sophiscated multi billion integrated defense systems in many countries which include missiles, radar services, satellites, integrated command and control centers and surveillance and space exploration equipments.

The Boeing Corporation has had problems which adversely affect their stability for instance their inability to accomplish and deliver the orders they are assigned on time with some being delivered three years later. This has happened frequently leading to mass cancellations of the orders and penalties which of course cause losses to the company. Italy for instance cancelled the orders for air crafts which were approximately 16 months late and went to an extent of posing a fine to the Boeing Corporation. The same case happened with Japan who had ordered a tanker and fined the corporation about five million dollars. This has costed the Boeing Corporation a lot as many organizations and countries prefer other companies like Airbus over Boeing for aircraft orders. The US government had in fact cancelled contacts worth about one billion US Dollars and assigned them to another company. Boeing Corporation therefore has a lot of work to do to regain their glory by accomplishing and delivering the orders on time to be able to attract their lost customers.

Due to the rising costs of the materials that are important in manufacturing planes and other Boeing products the Corporation has invested a lot of money in setting up subsidiaries in countries where raw materials are relatively cheap for example China. There has been a strong relationship between China and the Boeing Corporation since the time this company was started in 1916. In fact the first engineer who was contracted by Boeing was a Chinese born. Boeing has also made many plane assemblies in China to help curb the rising costs also. This corporation has been offering both financing and leasing services to their customers in a bid to maintain them for a long time. The Boeing Company is looking for commercial business opportunities and at the same time competing for tenders for long term military and space projects which could help them a lot in increasing their revenue. It has also been involved in buying or acquiring other companies for instance the Carmen Systems. Acquiring and investing in other companies will help the Boeing Corporation in strengthening and broadening of the company’s products and services.

The Boeing’s journey to success has been a long one with a lot of challenges facing their manufacturing and delivery of orders capabilities. One of the greatest challenge that this Giant Corporation has faced is emergence of companies producing related products for instance Airbus. Airbus is a European company based in France which produces products which are very similar to the Boeing’s including commercial airplanes and military related hardware. Since Airbus started manufacturing these products there has been a tight competition for orders between these two corporations. In this decade the Airbus Company was able to secure about fifty percent of the orders thereby leading to a reduction in the sales of the Boeing Corporation’s commercial airlines. The Boeing also experienced shortage of orders after the terrorist attacks in 2001greately threatening the company. This situation is also experienced in the recent years because of the weakening US economy which has led to reduced number of people using airplanes and therefore less aircraft orders. The increasing prices of petroleum has also affected the production of the industry in which there a fewer orders and therefore less profits that can lead to job cuts.

The neck to neck competition between Airbus and Boeing has led to introduction of each company’s best product which are great competitors. Airbus introduced A380 while Boeing introduced B787 in a bid to prove their visions of the future commercial and military air crafts. Airbus made a proposal to make the largest airplane ever, a double Decker plane with four engines and a capacity of more five hundred people. This made their main rivals Boeing to come up with a competing design with a plane which was faster over a large size but this proved futile because the operating costs were relatively higher. The Boeing Company therefore looked for an alternative which was a faster plane which could fly at around the speed of light and this plan was not successful also because the maintenance costs would also be high and most airline service providers preferred low maintenance airplanes. The Boeing Company had no option but to design another plane and they were able to come up with a relatively small airplane which was fuel efficient and would definitely be a favorite of many airline service providers and was ordered by many airliners. Success of the Boeing has been attributed by their research on their airline and leasing customers and listening to the customers requests then incorporate them to produce a quality product for example the Boeing 787 Dreamliner was as a result of this procedure.

Conclusion

The Boeing Company has been the largest manufacturer of both commercial and military airplanes since the early twentieth century and has continued to grow steadily over the years.  However, with the advancements in technology their success was short lived due to emergence of other companies that produced the same products as them for instance the France based Airbus Company. Competition has made the Boeing Corporation to venture in other commercial businesses to enhance their expansion and diversification of their products. Others companies like the Harris Interactive a market research and consulting firm did a demand research on the products of the two competing companies and most of the people favored the Boeing’s airplanes. This was favored by the fact that most passengers preferred smaller air planes to the larger ones because the larger planes would be more chaotic during check in boarding. These factors therefore favored the Boeing smaller planes over the Airbus large planes making the Boeing company a favorite to many. The Boeing Company has a big task to ensure that the make and deliver their orders on time to prevent any penalties and to be able to secure more contracts over the other competitors.  This has to be accomplished by ensuring that the management is streamlined and to increase the number of labor force in order to meet their high demands.

References

Bill, Y. William, Y. The Story of the Boeing Company 2nd Edition. Zenith Imprint, 2005.

Carl, D. Plane Truth: A Private Investigator’s Story. 2nd Edition. Algora Publishing, 2001.

Lance, D. Ian, M. Biographical dictionary of the history of technology. 2nd Edition. Taylor & Francis, 1996.

Rosalie, T. The IEBM handbook of international business. 2nd Edition. International Thompson Business Press, 1998.

Tina, G. Thomas, D. International directory of company histories. St. James Press, 2005.

 

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