BOEING: Aerospace pioneer rides an updraft

In 1922 William Boeing walked through his small airplane plant. He looked at the assembly floor where a number of stick-and-fabric biplanes were in various stages of construction.

"When we started this business it was kind of an adventure. Look what it's become," he commented to his chief engineer wistfully.

Today, the company that began as a rich man's hobby has grown into the largest aerospace firm in the world and one of the nation's most successful corporations.As a builder of jet bombers, strategic and cruise missiles, and jumbo jets, the Seattle-based company is considered by many to be without peer.

Some 66 percent of all commercial aircraft flying are built by Boeing, and it has managed to capture 63 percent of recent airline orders. In its current 12 -year forecast the Federal Aviation Administration (FAA) foresees a further consolidation of Boeing's hold on the commercial aircraft market.

So successful has Boeing been in the highly competitive aircraft industry that it now ranks as the nation's 29th largest industrial company. In the first six months of 1980 its sales amounted to $4.6 billion, with net earnings of $295 million, a 30 percent increase over the same period last year. And there is an additional backlog of orders totaling $19.7 billion.

Such financial success is comparatively new to Boeing. For most of its 65 -year history, it has been much better at designing innovative aircraft than it has been at producing them for a profit. And the company faces a number of severe challenges if it is to continue its dominance of the commercial aircraft market.

Chief among these is finding a way to survive the periodic depressions that characterize the aerospace industry. In the last such depression only Draconian measures save the company.

The problem is the volatile response of airline profits to fluctuations in the economy, which result in lost orders for new aircraft. In fact, current economic conditions and rising fuel costs in recent months have weakened airline earnings substantially, causing Boeing to limit expansion of its work force considerably and to slow its previously hectic aircraft production rates.

To bring more stability, Boeing directors have been trying to increase the company's military contracting and to diversify. Nevertheless, more than 80 percent of Boeing's income still comes from the sale of commercial aircraft.

Despite the uncertainties of airlines finances, Boeing has committed $2 billion to develop two aircraft that are more fuel-efficient. Some of Boeing's US competitors, none of whom have comparable efforts under way, have predicted that this gamble will break Boeing. These predictions not withstanding, advance airline orders of these new aircraft are as good as or better than for previous models, Boeing officials say. But to get some of these orders, Boeing has guaranteed at least 35 percent better fuel performance than current aircraft.

In the 1980s Boeing also faces a tough new competitor. This is Airbus Industries, a German-French-British-Spanish consortium. With member-government backing in such crucial areas as financing, Airbus has managed to triple its market share to 6 percent from 2 percent in recent months. It has a new aircraft under development that will be one of the only head-to-head competitors with the new Boeing models. Gene Mercer, chief forecaster for the FAA, expects Airbus to give Boeing increasingly stiff competition, particularly in Europe.

In many ways, Boeing's past epitomizes the changes aviation has gone through in this century. Airplanes have been transformed from simple machines made of wire, wood, and fabric into the sleek, silver jetliners of today with their hundreds of thousands of precision parts and a complexity that no single human can totally comprehend. Similarly, Boeing has grown from a 21-man operation in a small building, nicknamed the Red Barn, into a vast, technological empire employing 100,000 people and filling 34 million square feet of floor space.

One of the company's first aircraft was criticized by the Army Air Corps as an example of how not to build an airplane. But William Boeing was a believer in science, and from the outset he included professional engineers on his staff. The company was one of the first to build its own wind tunnel for test purposes.

Soon, Boeing was at the cutting edge of aeronautical research and aircraft design. In 1929 the Monomail was the first aircraft built entirely from metal with single, internally braced wings rather than the fabric strut-and-wire construction used on biplanes.

Four years later, Boeing introduced the first modern airliner: the 247. This was a twin-engined low-owing monoplane that brought a revolution in speed and comfort to the nation's airlines. Shortly afterward it was eclipsed by the Douglas DC-3, a similar but much larger aircraft that became the workhorse of commercial aviation for many years.

As Boeing grew in experience and numbers, its dedication to technical innovation and excellence became bound

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