-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Qv7+Ak3NxOMXBgRJ2Q+ptNeyCQFvplEPOxbo0buBD4wjbT4YRH+aYcw7Xs4eD30R WTMG8qVxvRWu+8MgWfS/GQ== 0000891020-98-000570.txt : 19980413 0000891020-98-000570.hdr.sgml : 19980413 ACCESSION NUMBER: 0000891020-98-000570 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19980410 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980410 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOEING CO CENTRAL INDEX KEY: 0000012927 STANDARD INDUSTRIAL CLASSIFICATION: AIRCRAFT [3721] IRS NUMBER: 910425694 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-00442 FILM NUMBER: 98591676 BUSINESS ADDRESS: STREET 1: P O BOX 3707 MS 1F 31 CITY: SEATTLE STATE: WA ZIP: 98124 BUSINESS PHONE: 2066552121 MAIL ADDRESS: STREET 1: 7755 EAST MARGINAL WAY SOUTH CITY: SEATTLE STATE: WA ZIP: 98124-2207 FORMER COMPANY: FORMER CONFORMED NAME: BOEING AIRPLANE CO DATE OF NAME CHANGE: 19730725 8-K 1 FORM 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------------ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 April 10, 1998 ------------------------------ Date of Report (Date of earliest event reported) THE BOEING COMPANY - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Delaware 1-442 91-0425694 ------------------------ ---------------------- --------------------- (State or Other (Commission File (IRS Employer Jurisdiction of Number) Identification No.) Incorporation) 7755 East Marginal Way South Seattle, Washington 98108 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices, Including Zip Code) (206) 655-2121 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) 2 ITEM 5. OTHER EVENTS On March 20, 1998, The Boeing Company ("Boeing") issued a news release announcing a plan to streamline facilities, focus manufacturing and assembly operations and eliminate redundant laboratories, resulting in a 15 percent decrease in facilities and reduction of 8,200 employees. A copy of this news release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. On March 24, 1998, Boeing issued a news release reporting its progress on the 7-series production-recovery efforts and confirming that it plans to deliver about 550 airplanes in 1998. A copy of this news release is attached hereto as Exhibit 99.2 and is incorporated herein by reference. On April 6, 1998, Boeing issued a news release announcing that it delivered 108 commercial jet transports during the first quarter of 1998, ending March 31. A copy of this news release is attached hereto as Exhibit 99.3 and is incorporated herein by reference. On April 10, 1998, Boeing issued a news release announcing that it would take a special first-quarter pre-tax charge to earnings of $350 million. A copy of this news release is attached hereto as Exhibit 99.4 and is incorporated herein by reference. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements of Businesses Acquired: Not applicable (b) Pro Forma Financial Information: Not applicable (c) Exhibits:
EXHIBIT NO. DESCRIPTION 99.1 News Release issued by The Boeing Company on March 20, 1998. 99.2 News Release issued by The Boeing Company on March 24, 1998. 99.3 News Release issued by The Boeing Company on April 6, 1998. 99.4 News Release issued by The Boeing Company on April 10, 1998.
Page 2 3 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. THE BOEING COMPANY Dated: April 10, 1998 By /s/ Theodore J. Collins --------------------------------------- Name: Theodore J. Collins Title: Senior Vice President, General Counsel and Secretary Page 3 4 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION 99.1 News Release issued by The Boeing Company on March 20, 1998. 99.2 News Release issued by The Boeing Company on March 24, 1998. 99.3 News Release issued by The Boeing Company on April 6, 1998. 99.4 News Release issued by The Boeing Company on April 10, 1998.
Page 4 EX-99.1 2 NEWS RELEASE ISSUED BY BOEING ON MARCH 20, 1998 1 EXHIBIT 99.1 BOEING OUTLINES FACILITIES PLAN SEATTLE, MARCH 20, 1998--The Boeing Company today announced a plan to streamline facilities, focus manufacturing and assembly operations, and eliminate redundant laboratories. By the end of the year 2000, these phased actions, along with other business initiatives, are expected to result in a decrease in facilities of approximately 18 million square feet, or more than 15 percent. The employment impact of the facility actions and the previously announced discontinuation of the MD-80 and MD-90 jetliner programs is a reduction of approximately 8,200 people. This does not include previously announced intentions (Dec. 16, 1997) to reduce commercial airplane employment by 12,000 beginning in the second half of 1998. "As a result of the merger with McDonnell Douglas and acquisition of Rockwell's aerospace and defense operations, we are strategically realigning the use of our facilities to provide better value to our customers and shareholders," said Phil Condit, Boeing chairman and chief executive officer. "These actions are in addition to ongoing initiatives to improve productivity and reduce costs." Condit noted that the decisions announced today will not require the company to take a one-time special charge against earnings. "These planned actions will help keep the company competitive for new business opportunities," Condit said. The resulting net savings within the Information, Space & Defense Systems segment will largely accrue to the U.S. government customer on future contracts. "We will concentrate investments in facilities, technology and people in keeping with our core competencies," Condit stated. "This will enhance our business base and provide continuing opportunities for our employees. "We have determined what, where and how our products will be made. We are establishing key Program Management Centers, responsible for overall management of Boeing product lines; Assembly, Integration & Test Centers, responsible for final assembly, systems integration and testing of products; and Strategic Manufacturing Centers, responsible for producing components or serving as centers of excellence for specific manufacturing processes," Condit said. He noted these centers will be or have been established within the existing operating group structure. In addition, Boeing will close duplicate laboratories and facilities, and form key partnerships with critical suppliers. Boeing acquired the aerospace defense operations of Rockwell in December 1996 and merged with McDonnell Douglas on Aug. l, 1997. Boeing is the world's largest aerospace company with 238,000 employees worldwide. The attached fact sheets detail the impact by geographical area and outline the changes by the company's three operating groups. Page 5 EX-99.2 3 NEWS RELEASE ISSUED BY BOEING ON MARCH 24, 1998 1 EXHIBIT 99.2 BOEING COMMERCIAL AIRPLANE GROUP UPDATES PRODUCTION STATUS SEATTLE, MARCH 24, 1998--Boeing Commercial Airplane Group today reported its progress on the 7-series production-recovery efforts. The company also confirmed that it plans to deliver approximately 550 airplanes in 1998, with approximately 110 of those deliveries occurring in the first quarter. "Gains have been made in our factory operations, particularly for the wide-body aircraft, but we are not out of the woods yet," said Ron Woodard, president of Boeing Commercial Airplane Group. "Recovery plans are inherently challenging, and we are now at one of the riskiest points in our plan as we increase production rates on the Next-Generation 737 as well as the 747, 757 and 777. There is still a risk that the challenges to our production system--particularly on the Next-Generation 737--could result in additional delivery delays, and although we can't rule that out, we're working very hard to keep that from happening." The Next-Generation 737 program has encountered changes driven by regulatory-certification requirements and flight-test results. As noted earlier, this had led to significant retrofit efforts and some delivery delays, and complicates the company's ability at this time to significantly improve key measurements for this program. The company is assessing the financial impact of these ongoing production problems. Woodard added, "While we continue to focus on these near-term issues, our commitment is to return to long-term production health and improved productivity in 1998." As previously announced, Boeing plans to accelerate Next-Generation 737 production from seven to 14 airplanes per month and increase 757 production from four to five airplanes per month during the second quarter of 1998. In the third quarter, the company will increase 747 production from four to five airplanes a month. Also in the third quarter, as a result of customer demand, the 777 production rate will return to seven per month from five per month. FORWARD-LOOKING INFORMATION IS SUBJECT TO RISK AND UNCERTAINTY Certain statements in the financial discussion and analysis by management contain "forward-looking" information that involves risk and uncertainty, including projections for deliveries, sales, research and development expense and other trend projections. Actual future results and trends may differ materially depending on a variety of factors, including the Company's successful execution of internal performance plans, future integration of McDonnell Douglas Corporation; product-performance risk associated with regulatory certifications of the Company's commercial aircraft by the U.S. Government and foreign governments; other regulatory uncertainties; collective-bargaining labor disputes; performance issues with key suppliers and subcontractors; government export and import policies; factors that result in Page 6 2 significant prolonged disruption to air travel worldwide; global trade policies; worldwide political stability and economic growth; changing priorities or reductions in the U.S. Government defense and space budgets; termination of government contracts due to unilateral government action or failure to perform; and legal proceedings. Page 7 EX-99.3 4 NEWS RELEASE ISSUED BY BOEING ON APRIL 6, 1998 1 EXHIBIT 99.3 BOEING REPORTS FIRST QUARTER DELIVERIES SEATTLE, APRIL 6, 1998--The Boeing Company announced today that it delivered 108 commercial jet transports during the first quarter of 1998, ending March 31. The deliveries during the three-month period consisted of 34 737-300/400/500s, 12 Next-Generation 737s, 12 747s, 11 757s, 10 767s, 20 777s, 2 MD-80s, 4 MD-90s and 3 MD-11s. Expected deliveries for the full year 1998 continue to be about 550 airplanes. Contact: Larry McCracken (206) 655-6123 http://www.boeing.com Page 8 EX-99.4 5 NEWS RELEASE ISSUED BY BOEING ON APRIL 10, 1998 1 EXHIBIT 99.4 BOEING ANNOUNCES IT WILL TAKE A FIRST QUARTER CHARGE FOR NEXT-GENERATION 737 PROGRAM PRODUCTION PROBLEMS SEATTLE, APRIL 9, 1998 -- Phil Condit, Boeing chairman and chief executive officer, announced today that first quarter earnings will include a $350 million pretax charge to earnings on the Next-Generation 737 program. Excluding the forward loss on the Next-Generation 737 program, pretax earnings of $400-$450 million are projected for the first quarter. Boeing's first quarter earnings will be released on April 22. The charge represents an increase to the previously recognized forward loss amount of $700 million for the Next-Generation 737 program. The forward loss is the amount by which the estimated production costs exceed the estimated revenue for the first 400 units of the program. Condit noted that several factors contributed to the additional charge. As previously reported, changes to the aircraft resulting from flight test and certification requirements caused the retrofit activity to be more extensive than originally anticipated. The incorporation of these changes in all Next-Generation 737 production aircraft, as well as reduction of out-of-sequence work and process flow risk, will require more resources and overtime as the Next-Generation 737 production rate increases. In addition, changes in the projected mix of the models offered, coupled with a lower price-escalation trend, reduced revenue estimates for the first 400 units. Performance to the production recovery plan for the Next-Generation 737 program during upcoming rate increases will determine whether further charges are necessary. The production rate will increase in the second quarter of 1998 from 7 aircraft per month to 14 per month and then to 21 per month late in 1998. Cost and schedule performance on other commercial aircraft models continues to be close to recovery plans, although the lower price-escalation trend also affects the company's forecast of revenues for all commercial aircraft programs. Production rate increases are planned for the 757 in the second quarter, the 747 in the third quarter, and the 777 in the third quarter of 1998. "The management and operational complexities, on an industrywide basis, of the rapid production rate buildup that resulted in abnormally high parts shortages and out-of-sequence work in the second half of 1997 cannot be reversed quickly. We are making progress and focusing our energies to get back to full production health in 1998 on all of our commercial programs," Condit said. "Our order book remains strong. We have announced orders for more than 850 Next-Generation 737 aircraft, with 15 delivered through the end of March 1998. In total, we have unfilled announced orders for more than 1,750 commercial aircraft. These orders, plus the strong Information, Space & Defense Systems backlog, present us with solid opportunities in the next several years." Page 9 2 FORWARD-LOOKING INFORMATION IS SUBJECT TO RISK AND UNCERTAINTY Certain statements in the financial discussion and analysis by management contain "forward-looking" information that involves risk and uncertainty, including projections for deliveries, sales, research and development expense and other trend projections. Actual future results and trends may differ materially depending on a variety of factors, including the Company's successful execution of internal performance plans; future integration of McDonnell Douglas Corporation; product-performance risk associated with regulatory certifications of the Company's commercial aircraft by the U.S. Government and foreign governments; other regulatory uncertainties, collective-bargaining labor disputes; performance issues with key suppliers and subcontractors; government export and import policies; factors that result in significant prolonged disruption to air travel worldwide; global trade policies; worldwide political stability and economic growth; changing priorities or reductions in the U.S. Government defense and space budgets; termination of government contracts due to unilateral government action or failure to perform; and legal proceedings. ### C1595 Contact: Larry McCracken (206) 655-6123 Page 10 -----END PRIVACY-ENHANCED MESSAGE-----