caught in the worst aviation downturn on record, is facing one of the most
daunting challenges in its 87-year history. Not just from the 50% drop in
orders from the world's airlines since September 11, 2001, but also from
burgeoning competition from Airbus since the mid-'90s. In response, the
company's commercial-airplanes division has revised both its designs for
future planes and its PR strategy.
Unlike its arch competitor Airbus, which reportedly won about $26 billion in
orders this year, in contrast to its own $10 billion, Boeing believes that
the public prefers to travel nonstop, point-to-point, and not have to depend
on a hub system that relies on big planes.
"To do that," says Tom Downey, the division's communications VP, "we have to
build smaller, highly capable airplanes that can be economically and
profitably operated, and enable the traveling public to fly where it wants
to go and when."
The 7E7, which Boeing hopes to have ready to fly in 2008, will make that
possible, he says.
Boeing expects the 7E7 - a fuel-efficient, 200-passenger model it plans to
call the Dreamliner - to be the "best plane we ever built." It already has
several countries and many
salivating over the prospect of winning the contract to build it. It's also
generating Boeing employees' concern over the outsourcing of the plane and
the engineering of future designs.
Support from the top
To get its message across to its stakeholders, Boeing has developed an
integrated communications and marketing program that involves all elements
of its business unit within the commercial division, and includes executives
at the company's corporate level.
"We do our planning from both the top down and the bottom up," adds Downey,
"so we have input and, yes, top management takes our advice - not just the
president, but also each of the folks who sit at that table. We're helping
develop and implement corporate strategy, not just communications strategy."
The structure has Downey
reporting directly to Alan Mulally, CEO of the commercial division, as well
as to his functional boss, Tod Hullin, the new communications SVP at
Boeing's world headquarters in Chicago.
Hullin, in turn, has the ear of Boeing CEO Phil Condit.
After staff reductions during the US
economic downturn, there are just four dozen PR employees in the commercial
division, down from more than 100 two years ago. And since that division
accounts for some $25 billion in revenue - about half the corporation's
total - the obvious question is how effective and internally influential its
relatively small PR staff can be.
"We've had to get down to an essential core," Downey explains. "So we're now
lean and mean. But I couldn't be happier with the role that we play, the
respect that we get internally."
No PR firm is involved in US operations, but the company retains a
"consultants network" that includes a few firms in some foreign countries to
assist in routine and crisis communications efforts, and also help execute
international sales campaigns that require specialized, local knowledge of
the territory. The network includes Promoseven Weber Shandwick in the Middle
Ogilvy Public Relations in India and
Thailand, and Edelman in Singapore, Brazil, and Argentina.
"In addition," says John Kvasnosky, communications director of
components/operations, "during the past two-and-a-half years, we've set up a
network of other consultancies, including the big agencies, in about 20
countries. That network is headed by Matthew De La Haye, VP for
international communications, who also reports to Hullin."
Several times a year, Boeing holds classes for reporters around the world
who cover the aircraft industry and for airline PR people, as well as
appropriate government regulatory agencies. "Airplanes 101" is a two-day
session that deals with the basics of designing and building an airplane and
what makes it safe. "Airplane 201" covers environment, cabin pressure, and
other matters of interest to passengers.
The commercial group also sells to the US Department of Defense and foreign
governments for defense and other uses. Air Force One, for example, is a
747. And Boeing sells its 767 as a tanker to Italy and
Japan through its Integrated Defense Systems unit. It keeps the media in
those countries interested in such programs, Downey says, by hosting them in
to see those planes.
While Boeing plans to produce major components of the 7E7 in some of those
countries, states here, ranging from Alabama to Washington, are hungrily
vying for contracts to make parts of the remainder, as well as the job of
assembling the planes, by promising vast tax and other financial breaks for
Boeing plans to freight the parts made abroad to the US for assembly. In
dangling the contracts before eager bidders, the company reportedly is
asking for something that a few critics say is over the top. The company
will, for example, build three 747s to haul the components, but won't
confirm whether it is asking the bidders to provide them. In a recent
quoted a Boeing executive as saying the company "wants to treat building an
airplane like a pit crew treats a race car."
reporter Dominic Gates, who has closely covered the birthing of the 7E7 from
the start, told
"This is the biggest story in Seattle
[Boeing's former, long-time corporate home]. But the company is treating
this important element of company strategy in a different way than normal by
being very, very closed about site selection. Information from official
sources has been zero, even when we call to confirm what we've learned from
other sources. For Seattle, it will determine whether there's a future for
the city in commercial aviation, which is vital to people here. So we're
trying to help our readers, but without any help from Boeing. Although I get
lots of cooperation from the company on other stories."
In fact, says Gates, when he tried to write a parallel story about the 717,
which is outsourced and assembled in Long Beach, CA, he was denied access to
the plant and its executives "because, they said, they didn't want parallels
drawn to the 7E7."
Asked about such media reaction, Downey replies, "While we anticipated some
reporters would be frustrated with us, we have stayed on message and found
overall that the approach has paid off."
During the long downturn, says Yvonne Leach, director of communications for
the 7E7 program, the company has worked with its airline customers to
promote travel. "Starting with the 7E7, " she explains, "we're partnering
with the marketing department in its promotion plans, and are reaching out
to publications read by our passengers.
"Last May," Leach points out, "we worked with marketing to develop a website
for people to sign on to receive a periodic, online newsletter that updates
them on the plane. Since May, more than 130,000 people have signed up and,
in answer to questions we put on the site, gave us input as to their flying
experience and suggestions. We let them know that we will give [this
information] to our engineers to consider when they design this airplane.
"In fact," Leach adds, "the name Dreamliner was chosen in a contest we held
to name the plane. It reached over a million people, and we announced the
result at the Paris Air Show last June."
Meanwhile, Boeing, which has laid off more than one-third of its 93,000
workers since September
11, 2001, will continue to build some older models, including the 737, 747,
and its flagship 777, for which there is still high demand.
But what Boeing needs now, says one observer, is a launch customer - a major
airline to order a significant number of Dreamliners so that the still-paper
plane doesn't become just a flight of fancy or, worse, a nightmare. An
industry analyst says that if Boeing does not launch the 7E7, it may never
develop another jetliner. But for now, Boeing is letting its stakeholders
know that the 7E7 is set for an on-time departure.
airplane programs communications
T. Craig Martin
Peter Conte, Todd Blecher
Washington, DC office