Ohh, you can hear me talk. I don't like that," says Mary Dowell, her voice reverberating as she walks through the world's largest manufacturing building. The quiet is not good. The 98-acre factory at Boeing's Everett, Wash., facility turns out only three large planes a month, compared with a monthly high of 16 just four years ago. Dowell, a 25-year Boeing veteran whose job it is to reshape the way the company builds its flagship plane, the 777, knows Boeing needs to revive the constant rat-a-tat-tat of riveting. "We've been humbled in the past couple of years," says Dowell. "We need to be more efficient. We get it."
Boeing might not have much time to prove it. The world's most prolific aircraft builder's commercial division is struggling in the worst aviation downturn in history and has laid off 35,560 of its 93,000 workers since Sept. 11, 2001. And although the division has remained profitable (it earned $2 billion on sales of $28 billion in 2002; Boeing had $54 billion in total revenues), this year it is expected to account for less than half the company's overall sales. Boeing makes six aircraft models, but airlines these days buy only two of them--the short-range 737 and the long-haul 777. Worse yet, this will probably be the first year that European rival Airbus delivers more airplanes than Boeing. The order book doesn't look much better: Airbus has won an estimated $26 billion worth of orders this year, in contrast to Boeing's $10 billion.
Boeing faces a fundamental question: Should it keep making commercial airplanes? And does the 87-year-old company even know what kind of plane to make? Years ago, Boeing decided not to build small regional jets--now the fastest-growing segment of the industry. The 757 production line will be closed down soon. And Boeing's aging 767 has been selling so poorly that the company is trying to persuade the Department of Defense to spend $22.4 billion to lease 100 767s and convert them to military tankers. That plan has stalled before a skeptical Congress.
Recapturing Boeing's glory, not to mention its global market share (in 1999 it held 67%; now, less than 50%), will be difficult. But the company says it has a plane design that airlines will buy, passengers will like and bean counters will love. It's a subsonic fuel-efficient jet the company rather inelegantly calls the 7E7. The 7E7, a midsize, 200-seat aircraft that is designed to fly so-called point-to-point routes nonstop, stands in stark contrast to the massive, 555-seat double-decker Airbus A380 that will probably keep to traditional hub-and-spoke networks when it starts flying commercially in 2006.