STRATEGY IN ACTION

THE EFFECT OF ASIA’S WOES ON BOEING

ASIA’S TROUBLES

• MARKET DECLINES OF UP TO 80% WIPED OUT BILLIONS IN ASSETS

• INDONESIAN ECONOMY DOWN BY 20% IN ONE YEAR

• JAPAN- $600 BILLION IN BAD DEBTS, 70% DECLINE IN PROPERTY VALUES

• CHINA- 75% OF BANK CREDIT IN STATE ENTERPRISES, $240 BILLION IN BAD DEBTS

WEALTH LOSS DUE DROP IN STOCK PRICES

• HONG KONG - $75 BILLION

• KOREA - $60 BILLION

• INDONESIA - $45 BILLION

• THAILAND - $21 BILLION

• TOTAL IS $201 BILLION DOLLARS

EFFECT ON BOEING

• 30% OF BOEINGS BACKLOG INTENDED FOR ASIAN CUSTOMERS

• ORDERS ARE DEFERRED OR CANCELLED ALTOGETHER

• ASIAN WEAKNESS IS STRONGEST IN 747 AND 777 MODELS

• 48000 JOB LOSS

• 25% CUT IN PRODUCTION

• SHARE PRICE HAS FALLEN ABOUT 25%

• 25% CUT IN COMMERCIAL JET PRODUCTION

BOEING’S PROJECTIONS

1999 2000

OPERATING REVENUE $58 B $50 BTOTAL R&D SPENDING $1.7 B $1.5 BDELIVERIES 620 490EMPLOYMENT 200000 185000PROFIT MARGINS COMMERCIAL .02 .01 SPACE & DEFENSE .08 .09