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Cautiously, Boeing Mulls Over Making a New Plane

September 01, 2003|Peter Pae | Times Staff Writer

EVERETT, Wash. — The Sonic Cruiser was supposed to have been Boeing Co.'s future, a super-fast jet for the 21st century that would protect the company's long-standing status as the world's largest commercial aircraft maker.

But in the cavernous hall of Boeing's airplane design and engineering center here, the only reminders of the Sonic Cruiser are piles of promotional posters tossed on the floor, with a "free, no limit" sign next to them.

Boeing scrapped plans for the slick jet during the air-travel slump in 2002. Just a year earlier, the company had called a halt to a project to develop a super-sized 747 jumbo jet that could carry up to 500 passengers.

Now, Boeing is mulling over another new aircraft, a fuel-efficient, easy-to-build jetliner dubbed the 7E7 Dreamliner. And it, too, could end up on the design center floor.

At least two board members are said to be concerned about the 7E7's development costs. What's more, airlines haven't shown any enthusiasm for it, in part because they have been disappointed by Boeing's repeated failures to bring new planes to the market.

"They've come up with so many ideas in the past few years that I'd like to see more details before I comment," Singapore Airlines' chief executive, Cheong Choong Kong, said during a recent aviation conference. The carrier is considered one of the more influential buyers in the industry.

Boeing directors are expected to decide by year-end whether to begin marketing the 7E7. Analysts say the vote will be a critical turning point for the company. If Chicago-based Boeing opts not to invest in the new jet, it could lose more business to European archrival Airbus, which is expected this year to surpass Boeing for the first time in deliveries of passenger jets.

"It's put-up or shut-up time" for Boeing, said Richard Aboulafia, analyst for the aerospace research firm Teal Group. "If they don't do it, they'll be sending a message that they won't be doing anything else again. They'll be coasting downhill for 20 years until there is no commercial aircraft business."

The economic stakes are huge. Boeing is the nation's largest exporter. Its commercial aircraft unit posted sales of $28 billion last year and employs nearly 58,000 workers nationwide.

The company is the largest private employer in Southern California, with 35,000 workers scattered from Palmdale to Canoga Park to Huntington Beach and Anaheim. Although most of those jobs are tied to Boeing's expanding defense business, many subcontractors in the region rely on the firm's commercial jetliner operations.

The company that pioneered jet travel hasn't introduced a new passenger plane since 1995, when it rolled out the twin-aisle 777. Meanwhile, Airbus has launched several aircraft in recent years, and its 550-passenger A380 super-jumbo jet is almost ready to take off.

Developing an airplane can cost as much as $10 billion, a significant investment at a time when airlines are grounding jets and struggling to survive. Companies have folded or gotten out of the business altogether after betting the farm on one aircraft -- and losing the gamble. Following lackluster sales of its L-1011 jet, Lockheed Aircraft exited the commercial market completely in 1984.


Secret Plans

Boeing began designing the 7E7 in earnest about a year ago, although small teams at the firm's secretive Phantom Works research units in Seattle and Long Beach have been working on the idea of a super-efficient plane for years.

The 7E7 would seat 200 passengers, be powered by a new jet engine and built with mostly lightweight composite materials. It would use 20% less fuel than a conventional plane of comparable size, and have a range similar to Boeing's larger 777 and 747 aircrafts, which can travel 8,000 miles or more nonstop.

In recent weeks, hundreds of 7E7 engineers who had been working in an obscure building in Everett, just north of Seattle, were moved to a sprawling facility nearby where Boeing came up with the 777 airliner nearly a decade ago. Desks have popped up in once-empty hallways, a sign that top company officials say shows Boeing's commitment to make the aircraft.

"There is a whole lot of enthusiasm here," said Walt Gillette, the head engineer leading the design of the 7E7. "We will have an airplane that will have broad appeal. It's an airplane that I expect you'll see even in the 22nd century."

But will it pass muster with Boeing's board?

None of the company's 11 directors would comment publicly about the 7E7, but people familiar with their discussions say that at least two key members, Harry C. Stonecipher and John F. McDonnell, have raised questions about the cost of developing it. McDonnell, whose father founded the namesake aerospace company that merged with Boeing in 1997, is one of Boeing's largest individual shareholders.

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