NLRB Production 7

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Microsoft Outlook
From: Abruzzo, Jennifer
Sent: Tuesday, May 10, 2011 11:02 AM
To: Mattina, Celeste J.; Kearney, Barry J.; Ahearn, Richard L.; Garza, Jose
Subject: Meeting re: response to oversight request on Boeing
Is everyone available for a 1:00pm Eastern meeting on the above?
Tracking:
NLRB-FOIA-00005297
2
Recipient Recall
Mattina, Celeste J. Succeeded: 5/10/2011 11:07 AM
Kearney, Barry J.
Ahearn, Richard L. Failed: 5/10/2011 11:04 AM
Garza, Jose Failed: 5/10/2011 11:06 AM
NLRB-FOIA-00005298
1
Microsoft Outlook
From: Garza, Jose
To: Abruzzo, Jennifer; Mattina, Celeste J.; Kearney, Barry J.; Ahearn, Richard L.
Subject: RE: Meeting re: response to oversight request on Boeing
I am available then if this still works for everyone.
NLRB-FOIA-00005299
1
Microsoft Outlook
From: Mattina, Celeste J.
To: Garza, Jose; Abruzzo, Jennifer; Kearney, Barry J.; Ahearn, Richard L.
Rich and I are available as well.
From: Garza, Jose
NLRB-FOIA-00005300
1
Microsoft Outlook
To: Mattina, Celeste J.; Garza, Jose; Kearney, Barry J.; Ahearn, Richard L.
Barry, are you available? If so, please bring Ellen and Jayme and others, if you deem it appropriate and they are
available.
From: Garza, Jose
NLRB-FOIA-00005301
1
Microsoft Outlook
From: Kearney, Barry J.
Sent: Tuesday, May 10, 2011 12:08 PM
To: Abruzzo, Jennifer; Mattina, Celeste J.; Garza, Jose; Ahearn, Richard L.
Ellen is out. Jayme and I will be there at 1
available.
From: Garza, Jose
NLRB-FOIA-00005302
1
Microsoft Outlook
From: Garza, Jose
To: Kearney, Barry J.; Abruzzo, Jennifer; Mattina, Celeste J.; Ahearn, Richard L.
Attachments:
available.
From: Garza, Jose
Non-Responsive
NLRB-FOIA-00005303
This document is fully redacted. ID: 0.7.42.1174693.1

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Microsoft Outlook
From: Frankl, Joseph F.
To: Abruzzo, Jennifer
Subject: Missed your call
Sorry, I was doing a staff meeting. Hectic day; tomw should be better.
-J
Non-Responsive
NLRB-FOIA-00005309
1
Microsoft Outlook
To: Frankl, Joseph F.
Subject: Re: Missed your call
I'll try again tomorrow.
--------------------------
Sent from my BlackBerry Wireless Handheld
Sent: Tue May 17 17:27:42 2011
-J
Non-Responsive
Non-Responsive
NLRB-FOIA-00005310
1
Microsoft Outlook
Subject: RE: Missed your call
Same.
--------------------------
Sent: Tue May 17 17:27:42 2011
-J
Non-Responsive
Non-Responsive
Non-Responsive
NLRB-FOIA-00005311
1
Microsoft Outlook
These Congressionals are sapping my energy...Going to check out the news now. Keep waiting for Colbert's
report on Boeing. Speak with you tomorrow
--------------------------
Sent: Tue May 17 18:13:26 2011
Same.
--------------------------
Sent: Tue May 17 17:27:42 2011
-J
E 6 privacy
E 6 privacy
Not responsive
Not responsive
Not responsive
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1
Microsoft Outlook
I thought we had a Congress
guy. Talk tomw.
These Congressionals are sapping my energy...Going to check out the news now. Keep waiting for Colbert's
report on Boeing. Speak with you tomorrow
--------------------------
Sent: Tue May 17 18:13:26 2011
Same.
--------------------------
Sent: Tue May 17 17:27:42 2011
-J
Not responsive
Not responsive
Not responsive
Not responsive
Not responsive
Not responsive
Not respo...
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Microsoft Outlook
From: Solomon, Lafe E.
Sent: Wednesday, May 25, 2011 10:37 AM
To: Mattina, Celeste J.; Abruzzo, Jennifer
Subject: FW: Fwd:Re:Lafe questions
Please join us if you are available. I will forward you the questions in a separate email.
-----Original Message-----
From: Cleeland, Nancy
To: Solomon, Lafe E.
Subject: RE: Fwd:Re:Lafe questions
Sure
Nancy Cleeland
NLRB Director of Public Affairs
(202) 273-0222
nancy.cleeland@nlrb.gov
To: Cleeland, Nancy
Can we meet at 3 or after to discuss my answers? Thanks.
Here are their questions. They're trying to butter you up!
Nancy Cleeland
(202) 273-0222
From: HOLLY ROSENKRANTZ, BLOOMBERG/ NEWSROOM: [mailto:hrosenkrantz@bloomberg.net]
To: Cleeland, Nancy
Subject: Fwd:Re:Lafe questions
--- Original Sender: STEPHANIE ARMOUR, BLOOMBERG/ NEWSROOM: ---
Hi Nancy. Here are our questions for Lafe. We have a Friday deadline on this story, so hoping
you can help out. All best, Holly
NLRB-FOIA-00005314
1
Microsoft Outlook
Attachments: lafe questions.docx
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
NLRB-FOIA-00005315
Lafe Solomon questions:
1. Marshall Babson was saying that, with your skill and
expertise, you could easily have done more lucrative or higher
profile legal career choices. What has drawn you to the NLRB?
What about the agency has kept you there for so long?
2. What are the harder parts of the job? The best?
3. What hobbies or interests do you have outside of the NLRB? I
hear you're a gourmet chef who started your own catering
service, for example, well known for your home-made King's
Cakes..what kind of music do you like? Books? Travel
destinations?
4. Obviously you have assumed the role of AGC at a time when
there are a lot of key, and controversial, issues suddenly
coming up -- social media issues, employee rights, Boeing. If
you can share, how do you deal with being in the hot seat these
days? What keeps you focused in this very partisan environment?
5. What would YOU like people to know about yourself?
6. You started out in a regional office and then decided to go
to law school. Why? What piqued your interest?
7. How has the board changed or evolved since you first came
aboard?
8. Why do you think the NLRB has come so under attack in the
past year from Republicans? (if you feel comfortable commenting
on it).
9. What are you most proud of?
NLRB-FOIA-00005316
1
Microsoft Outlook
To: Solomon, Lafe E.; Abruzzo, Jennifer
Jen and I have a conference call at 3 pm, but it shouldnt last that long.
Sure
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Nancy Cleeland
(202) 273-0222
NLRB-FOIA-00005317
2
To: Cleeland, Nancy
NLRB-FOIA-00005318
1
Microsoft Outlook
To: Mattina, Celeste J.; Solomon, Lafe E.
Actually, our call is at 2 so we should be available at 3.
Sure
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Nancy Cleeland
NLRB-FOIA-00005319
2
(202) 273-0222
To: Cleeland, Nancy
NLRB-FOIA-00005320
1
Microsoft Outlook
Sent: Thursday, June 02, 2011 2:36 PM
Subject: FW: South Carolina Boeing Employees Move to Intervene in Obama Labor Board's Assault on
Right to Work Laws
Attachments: image004.gif; 19-CA-32431
_NLRBvBoeing_Motion_to_Intervene_and_Declarations_In_Support_060111.pdf;
image001.jpg; image002.gif
The latest
To: Mattina, Celeste J.; Garza, Jose; Wagner, Anthony R.
Subject: FW: South Carolina Boeing Employees Move to Intervene in Obama Labor Board's Assault on Right to Work
Laws
fyi
Nancy Cleeland
(202) 273-0222
From: John McDermott [mailto:jmcdermott@postandcourier.com]
To: Cleeland, Nancy
Laws
Nancy: The release and PDF.
Thanks
For Release: June 2, 2011
Contact: Anthony Riedel
(703) 770-
3364
South Carolina Boeing Employees Move to Intervene in
Obama Labor Boards Assault on Right to Work Laws
National Right to Work Foundation attorneys helping workers and former
Machinist union president challenge attempt to send jobs to Washington
Washington, DC (June 2, 2011) With free legal assistance from the National Right to Work
Foundation, a group of Charleston-area Boeing Corporation employees are asking to intervene in the National
NLRB-FOIA-00005321
2
Labor Relations Boards (NLRB) unprecedented case targeting Boeing for locating production in South
Carolina in part due to its popular Right to Work law. That law ensures that union dues and membership are
strictly voluntary.
The NLRBs complaint, if successful, would eliminate over 1,000 existing jobs in South Carolina, not to
mention several thousand more jobs that would be created once the Boeing plant reaches full production
capacity. Further, the case could set a dangerous precedent that allows union bosses to dictate where job
providers locate their facilities.
In 2009, Boeing, after experiencing repeated International Association of Machinists (IAM) union boss-
instigated strikes in the forced unionism state of Washington, decided to locate a new production line for the
787 Dreamliner to South Carolina, partly because South Carolina is a Right to Work state. IAM union bosses in
state of Washington cried foul and filed unfair labor practice charges against Boeing.
The NLRBs Acting General Counsel Lafe Solomon sided with IAM union bosses and decided to
prosecute Boeing in late April. Ironically, workers in Boeings South Carolina plant booted IAM union bosses
from their plant to attract the Dreamliner production, as the workers did not want union bosses interfering with
their job prospects.
Boeing employees Dennis Murray, who led the effort to remove the union from the Charleston plant;
Cynthia Ramaker, the former president with the local union which was removed from the plant; and Meredith
Going filed their motion to intervene in the case with the NLRB regional office in Seattle, where the NLRBs
case is pending.
This case is nothing more than an attack by the Obama Administration on Right to Work laws and all
workers in Right to Work states where employees cannot be forced to pay union dues as a condition of getting
or keeping a job, said Mark Mix, President of National Right to Work. Workers in South Carolina should not
be denied the opportunity to continue providing for their families to satisfy the outrageous forced unionism
demands of union officials in Washington state.
The National Labor Relations Boards complaint is just the latest giveaway to Big Labor by an Obama
Administration that has already erased union financial disclosure requirements and kept workers in the dark
about the right to refrain from union membership, and is poised to eliminate workers ability to challenge a
coercive card check campaign with a secret ballot vote, added Mix. Once again the Obama Labor Board is
putting union boss priorities ahead of the rights and well-being of individual employees.
The National Right to Work Legal Defense Foundation is a nonprofit, charitable organization providing free legal aid to
employees whose human or civil rights have been violated by compulsory unionism abuses. The Foundation, which can be contacted
toll-free at 1-800-336-3600, is assisting thousands of employees in nearly 200 cases nationwide. Its web address is www.nrtw.org.
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1
Microsoft Outlook
Sent: Friday, June 03, 2011 6:12 AM
To: Cleeland, Nancy
Subject: RE: South Carolina Boeing Employees Move to Intervene in Obama Labor Board's Assault on
Right to Work Laws
Attachments: image001.jpg; image003.gif
Good morning Nancy,
When you see something relevant in the press, please forward a copy to me as well.
Thanks,
Jennifer
Laws
The latest
Laws
fyi
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Laws
Thanks
(703) 770-
3364
NLRB-FOIA-00005361
2
strictly voluntary.
case is pending.
NLRB-FOIA-00005362
NLRB-FOIA-00005363
NLRB-FOIA-00005364
1
Microsoft Outlook
To: Mattina, Celeste J.
Subject: RE: South Carolina Boeing Employees Move to Intervene in Obama Labor Board's Assault on
Right to Work Laws
Doesnt look like they served the union.
Laws
The latest
Laws
fyi
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Laws
Thanks
(703) 770-
3364
NLRB-FOIA-00005365
2
strictly voluntary.
case is pending.
NLRB-FOIA-00005366
NLRB-FOIA-00005367
NLRB-FOIA-00005368
1
Microsoft Outlook
To: Solomon, Lafe E.; Mattina, Celeste J.; Cleeland, Nancy
Subject: Opening statement
Attachments: OpeningIssafinalwithoutcites.doc
This is the final opening without cites for oral testimony and press release.
NLRB-FOIA-00005369
STATEMENT OF
LAFE E. SOLOMON
ACTING GENERAL COUNSEL
NATIONAL LABOR RELATIONS BOARD
BEFORE THE
COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
UNITED STATED HOUSE OF REPRESENTATIVES
NORTH CHARLESTON, SOUTH CAROLINA
JUNE 17, 2011
NLRB-FOIA-00005370
Mr. Chairman and distinguished Members of the Committee:
I appear before you today as the Acting General Counsel of the National Labor Relations
Board, having been appointed to this position by President Obama on June 21, 2010. For
the 38 years before my appointment, I have served as a career civil servant in many
positions throughout the Agency, ranging from field examiner, staff attorney, supervisory
attorney, and finally, as a member of the Senior Executive Service.
I would like to start by acknowledging that workers in North Charleston are feeling
vulnerable and anxious because they are uncertain as to what impact any final decision
may have on their employment with Boeing. These are difficult economic times, and I
truly regret the anxiety this case has caused them and their families. The issuance of the
complaint was not intended to harm the workers of South Carolina, but rather, to protect
the rights of workers, regardless of where they are employed, to engage in activities
protected by the National Labor Relations Act, without fearing discrimination. Boeing
has every right to manufacture planes in South Carolina, or anywhere else, for that
matter, as long as those decisions are based on legitimate business considerations.
This complaint was issued only after the parties failed to informally resolve this dispute.
I personally met with the parties and I tried for three months to facilitate a settlement of
the case. I remain open to playing a constructive role in assisting the parties to settle this
dispute without the costs and uncertainties associated with extended litigation. I believe
that, given the parties longstanding bargaining relationship, a settlement would serve the
NLRB-FOIA-00005371
interests of the parties and the workers and would promote industrial peace. In the
absence of a mutually acceptable settlement, however, both Boeing and the Machinists
Union have a legal right to present their evidence and arguments in a trial and to have
those issues be decided by the Board and federal courts.
I would like to begin by describing briefly the relevant regulatory framework and the role
of the Office of General Counsel within that framework. The National Labor Relations
Act divides responsibility over private-sector labor relations between the National Labor
Relations Board and the General Counsel of the Board. The Board adjudicates cases in
accordance with the procedures set forth in the Act itself, the Administrative Procedures
Act, and the Constitution. The Office of the General Counsel serves as a prosecutor of
labor law violations in such cases.
The Office of the General Counsel was created by the Taft-Hartley Amendments of 1947.
Under Section 3(d) of the amended Act, the General Counsel has final authority, on
behalf of the Board, with respect to the investigation and prosecution of unfair labor
practice complaints. In order to ensure that the newly-established General Counsel of the
NLRB would have both the independence and resources necessary to make final,
unreviewable decisions in typically heated labor and management controversies, Section
3(d) also provided that, with the exception of administrative law judges and legal
assistants to Board members, General Counsel shall exercise general supervision over all
attorneys employed by the Board and would have general supervision over the officers
and employees in the regional offices. Like my predecessors, I have gone to great
NLRB-FOIA-00005372
lengths to ensure that all unfair labor practice charges, which must be initiated by private
parties, are fairly considered, relying on findings, reasons, precedents, checks through
appeals and through internal supervision, and procedural protections.
To that end, all charges filed with our regional offices are carefully and impartially
investigated to determine whether there is reasonable cause to believe that, under the
Boards precedents, an unfair labor practice has been committed. Fairness to the parties
and sound development of the law weighs in favor of presenting these types of cases to
the Board for decision, subject to review by the courts. I would not be fulfilling my
responsibilities if I turned a blind eye to evidence that an unfair labor practice may have
occurred. I took an oath to enforce the National Labor Relations Act and to protect
workers from unlawful conduct.
The General Counsels concern with fairness to the parties does not end with the issuance
of the complaint. The Supreme Court has recognized that the Act and the Boards rules
are designed to ensure that proceedings are conducted in a manner that respects the
private rights of the charging party and the charged party.
The Supreme Court has also recognized that Congress intended to create an officer
independent of the Board to handle prosecutions, not merely the filing of complaints.
Thus, throughout the proceeding, the General Counsel remains master of the complaint
and the charging party is not permitted to pursue alternative theories of a violation
without the consent of the General Counsel. Throughout the proceedings, the General
NLRB-FOIA-00005373
Counsel is responsible to ensure that the prosecution of the case is justified by the facts
and law. As such, it remains open to the General Counsel to make concessions on issues
of fact or law and to pursue settlement discussions with the charged party -- even over the
objections of the charging party.
For all these reasons, the actual fairness of the proceedings before the Board -- and,
equally important, the perception that the Boards administrative processes are fair --
vitally depends on the public and the parties retaining the confidence that the General
Counsel is carrying out his prosecutorial responsibilities on the basis of the facts and law
in the case, and is not making decisions on the basis of political or other matters not
properly before the Board.
As you know, the Boeing hearing began on Tuesday of this week before an
administrative law judge in Seattle, Washington. I am actively involved in overseeing
the Boeing litigation and in strategic decisions necessary for the prosecution of this case.
My obligation to protect the independence of the Office of the General Counsel and the
integrity of the enforcement process restricts my ability to offer insight into the decision-
making here. I hope you will share my commitment that these proceedings not be
construed as an effort by the Congress to exert pressure or attempt to influence my
prosecutorial decisions in this case, which have been and will continue to be made based
on the law and the merits and in a manner which protects the due process rights of the
litigants.
NLRB-FOIA-00005374
I come here voluntarily out of respect for the oversight role of Congress. I will do my
best to answer your questions, consistent with my obligations to the parties and to the
American public with respect to the ongoing Boeing case. The adjudicatory process must
be fair and impartial so that the parties due process rights, which are guaranteed by the
Constitution, are preserved. Our American legal system of justice is guided by these
fundamental principles.
NLRB-FOIA-00005375
1
Microsoft Outlook
Subject: RE: Opening statement
Hi Jennifer,
I think we should keep the cites in the press release version. Could you send me that? Thanks
Nancy Cleeland
(202) 273-0222
NLRB-FOIA-00005376
1
Microsoft Outlook
To: Cleeland, Nancy
Do you still want the below now that the opening has been shortened?
Hi Jennifer,
Nancy Cleeland
(202) 273-0222
NLRB-FOIA-00005377
1
Microsoft Outlook
Yes, thanks. We want the full version for the release.
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Hi Jennifer,
Nancy Cleeland
(202) 273-0222
NLRB-FOIA-00005378
1
Microsoft Outlook
To: Cleeland, Nancy
Attachments: Solomon's Statement to Oversight Committee.pdf
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Hi Jennifer,
Nancy Cleeland
(202) 273-0222
NLRB-FOIA-00005379
STATEMENT OF
LAFE E. SOLOMON
BEFORE THE


JUNE 17, 2011

NLRB-FOIA-00005380

NLRB-FOIA-00005381
assistants to Board members, General Counsel shall exercise general supervision over
all attorneys employed by the Board and would have general supervision over the
officers and employees in the regional offices. Like my predecessors, I have gone to

NLRB-FOIA-00005382
great lengths to ensure that all unfair labor practice charges, which must be initiated by
private parties, are fairly considered, relying on "findings, reasons, precedents, checks
through appeals and through internal supervision, and procedural protections. See K.
Davis, Discretionary Justice 207 (1969).
the Board for decision, subject to review by the courts. See Kenneth C. McGuiness,
Effect of the Discretionary Power of the General Counsel on the Development of the
Law, 29 Geo. Wash. L.Rev. 385, 397 (1960). I would not be fulfilling my responsibilities
if I turned a blind eye to evidence that an unfair labor practice may have occurred. I took
an oath to enforce the National Labor Relations Act and to protect workers from unlawful
conduct.
private rights of the charging party and the charged party. Automobile Workers v.
Scofield, 382 U. S. 205, 217-221 (1965).

NLRB-FOIA-00005383
NLRB v. United Food & Comm. Workers Un., 484 U.S. 112, 127 (1987) (emphasis in
original). Thus, throughout the proceeding, the General Counsel remains master of the
complaint and the charging party is not permitted to pursue alternative theories of a
violation without the consent of the General Counsel. See, e.g., Teamsters, Local 282
(E.G. Clemente Contracting Corp.), 335 NLRB 1253, 1254 (2001). Throughout the
proceedings, the General Counsel is responsible to ensure that the prosecution of the case
is justified by the facts and law. As such, it remains open to the General Counsel to make
concessions on issues of fact or law and to pursue settlement discussions with the charged
party -- even over the objections of the charging party.

NLRB-FOIA-00005384
litigants.

NLRB-FOIA-00005385
1
Microsoft Outlook
To: Wagner, Anthony R.
Subject: FW: Opening statement
Attachments: Solomon's Statement to Oversight Committee.pdf
Here it is.
To: Cleeland, Nancy
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Hi Jennifer,
Nancy Cleeland
(202) 273-0222
NLRB-FOIA-00005386
2
NLRB-FOIA-00005387
STATEMENT OF
LAFE E. SOLOMON
BEFORE THE


JUNE 17, 2011

NLRB-FOIA-00005388

NLRB-FOIA-00005389
assistants to Board members, General Counsel shall exercise general supervision over
all attorneys employed by the Board and would have general supervision over the
officers and employees in the regional offices. Like my predecessors, I have gone to

NLRB-FOIA-00005390
great lengths to ensure that all unfair labor practice charges, which must be initiated by
private parties, are fairly considered, relying on "findings, reasons, precedents, checks
through appeals and through internal supervision, and procedural protections. See K.
Davis, Discretionary Justice 207 (1969).
the Board for decision, subject to review by the courts. See Kenneth C. McGuiness,
Effect of the Discretionary Power of the General Counsel on the Development of the
Law, 29 Geo. Wash. L.Rev. 385, 397 (1960). I would not be fulfilling my responsibilities
if I turned a blind eye to evidence that an unfair labor practice may have occurred. I took
an oath to enforce the National Labor Relations Act and to protect workers from unlawful
conduct.
private rights of the charging party and the charged party. Automobile Workers v.
Scofield, 382 U. S. 205, 217-221 (1965).

NLRB-FOIA-00005391
NLRB v. United Food & Comm. Workers Un., 484 U.S. 112, 127 (1987) (emphasis in
original). Thus, throughout the proceeding, the General Counsel remains master of the
complaint and the charging party is not permitted to pursue alternative theories of a
violation without the consent of the General Counsel. See, e.g., Teamsters, Local 282
(E.G. Clemente Contracting Corp.), 335 NLRB 1253, 1254 (2001). Throughout the
proceedings, the General Counsel is responsible to ensure that the prosecution of the case
is justified by the facts and law. As such, it remains open to the General Counsel to make
concessions on issues of fact or law and to pursue settlement discussions with the charged
party -- even over the objections of the charging party.

NLRB-FOIA-00005392
litigants.

NLRB-FOIA-00005393
1
Microsoft Outlook
From: Wagner, Anthony R.
Thanks! Will get it posted now.
Tony
Here it is.
To: Cleeland, Nancy
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Hi Jennifer,
NLRB-FOIA-00005394
2
Nancy Cleeland
(202) 273-0222
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1
Microsoft Outlook
To: Solomon, Lafe E.; Mattina, Celeste J.
Subject: Hot off the presses
These are strange times in U.S. labor relations, and they are getting stranger by day. The past two weeks have
seen several important developments in the bizarre ongoing saga between the National Labor Relations Board
and Boeing, which has become a cause clbre for conservative politicians and pundits, even forming part of
the discussion during the New Hampshire Republican presidential debate, with former Speaker of the House
Newt Gingrich calling for abolition of the labor board.
So what happened? First, after more than a year of construction, Boeing opened its new billion-dollar facility in
North Charleston, S.C., which will act as a final assembly plant for the 787 Dreamliner, widely considered the
future of commercial aviation. Then, the NLRB started its administrative law judge hearing that will decide the
fate of the complaint issued by the acting general counsel, which accuses Boeing of breaking the law by moving
work from a unionized plant in Washington state to a non-union plant in South Carolina in retaliation for strike
action at the union plant.
Adding to the drama, South Carolina Sen. Lindsey Graham announced that he would block President Obama's
nomination for secretary of Commerce despite the nominee being a member of Boeing's board of directors
until the president states publicly that Boeing is an "ethical" corporation. Then Boeing refused a settlement
offer from the machinists union that involved keeping the disputed work in South Carolina.
Congressional Republicans, meanwhile, called a hearing of the House Oversight Committee in Charleston to
"discuss" the NLRB's actions. With considerable reluctance, Lafe Solomon, the acting general counsel who
issued the complaint, testified at the hearing only after Republicans threatened to subpoena him if he refused to
appear. Republicans accused the NLRB of waging "class" and "regional" warfare, attacked Solomon for
"prosecutorial misconduct" and quizzed him about the case a clear threat to due process. So much for
Southern hospitality.
Conservative politicians and pundits have tried to make this dispute about anything other than the key question:
Did Boeing violate the law? Fox News has run stories on South Carolina workers with headlines like: "What
would you do if the government tried to kill your job?" But South Carolina is not the issue the legal issues
would be identical if Boeing had transferred the jobs to the moon.
The NLRB is not telling a private company where it can and cannot do business. Under U.S. law, Boeing has a
right to transfer work from Washington to South Carolina for good reasons, bad reasons, or no reason at all. But
it is not allowed to transfer work for discriminatory reasons in this case, retaliation for Washington workers
exercising their right to strike.
Boeing has claimed that the NLRB complaint takes out of context remarks on the motivation behind the transfer
of work. The comments in question are about as clear as one could imagine. The "overriding factor" in the
decision to locate the jobs in South Carolina, Boeing's EVP explained, was the need to avoid further work
stoppages.
In its defense, Boeing states that, not only has it not cut jobs in Washington, but it actually has added new jobs.
True, but these new jobs involve "rework" and "out of sequence work" needed to remedy ongoing problems in
NLRB-FOIA-00005396
2
Boeing's complex and dysfunctional global supply chain. When the supply-chain problems are fixed, the jobs
will disappear.
Boeing also states that the South Carolina jobs are new jobs, which will surprise the workers on the 'surge line"
in Washington state who are doing final assembly work on the Dreamliner, and whose work will be wound
down as the South Carolina plant becomes fully functional.
So what is this really about? Though they would never say so, it is about Republicans' visceral hatred of the
current NLRB and the workplace rights it protects. Republicans have been looking for an issue with which to
attack the NLRB since their sweeping election victories last November. Several previous attempts floundered,
but Boeing has provided red meat for those who would like to destroy the last vestiges of workers' rights in
America.
If Boeing reads the situation right, it will settle this dispute. Based on the evidence so far, it probably will lose
based on the legal issues. But the Republicans who have used the Boeing dispute as a pretext to attack the
NLRB will never settle. For them, there always will be another reason to attack the agency mandated with
protecting the right to form unions. For it is that basic right on which they have really declared war.
John Logan is professor and director of Labor Studies at San Francisco State University.
NLRB-FOIA-00005397
1
Microsoft Outlook
Cc: Abruzzo, Jennifer
Subject: FW: Hot off the presses
FYI, the ALJ quashed the subpoena served on us!
From: Ahearn, Richard L.
Subject: RE: Hot off the presses
. Good news from today is the ALJ quashed Boeings subpoena to
us. Yea!
Further argument continuing on subpoena to U and to Boeing.
Cheers,
rich
To: Ahearn, Richard L.
Rich,
FYI, it puts the new jobs in context and talks about the surge line, which nobody has
mentioned in the context of discussing new vs transferred work.
but would
appreciate it if you keep me posted, as you have in the past, of developments through
e mail.
If you are on break from the hearing, hopefully the congressional and press demands
will subside a bit and we can do the work we were meant to do. There is always
hope
Keep in touch,
Celeste
Exemption 6 - Privacy
E.6 Privacy
NLRB-FOIA-00005398
2
stoppages.
will disappear.
NLRB-FOIA-00005399
3
America.
NLRB-FOIA-00005400
1
Microsoft Outlook
Sent: Tuesday, April 19, 2011 4:53 PM
Subject: RE: fact sheet so far
Thanks much.
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy; Mattina, Celeste J.
Thx. BTW, Ill plan on sending you, Lafe and Barry the complaint tomorrow am as I send courtesy copies to the parties.
Rich
To: Mattina, Celeste J.; Ahearn, Richard L.
Subject: fact sheet so far
Hi here is what I have so far for the fact sheet. I know there are a lot of gaps but I hope to get them all filled by the end
of the day.
Also attached is a copy of the latest version of the press release.
Nancy Cleeland
(202) 273-0222
NLRB-FOIA-00005401
1
Microsoft Outlook
Sent: Wednesday, April 27, 2011 1:48 PM
Subject: RE: Nice economist piece
Very interesting. Even the way they spell labour is different!
Subject: Nice economist piece
Dont know if you all saw this yet, but the Economist weighed in on Monday, and its certainly a different
perspective that what were seeing in most u.s. media:
http://www.economist.com/blogs/democracyinamerica/2011/04/boeings_labour_problems
There are lots of good points, but I really liked this one, which Ive been waiting for someone to make: If
Boeing is having more trouble with its unions than its competitors are, it's possible that the fault lies with
the company, rather than with the unions.
Nancy Cleeland
(202) 273-0222
NLRB-FOIA-00005402
1
Microsoft Outlook
To: Solomon, Lafe E.; Mattina, Celeste J.; Kearney, Barry J.; Garza, Jose; Cleeland, Nancy
Subject: FW: Sen REID - MUST KEEP INDEPENDENT AGENCIES INDEPENDENT - OPERATE
FREELY AND WITHOUT POLITICAL PRESSURE
Attachments: image001.jpg
http://democrats.senate.gov/newsroom/record.cfm?id=332789&
For Immediate Release
Date: Wednesday, May 11, 2011
CONTACT: Jon Summers, (202) 224-2939
REID: WE MUST KEEP INDEPENDENT AGENCIES INDEPENDENT, ALLOW THEM TO
OPERATE FREELY AND WITHOUT POLITICAL PRESSURE
Washington, D.C.Nevada Senator Harry Reid made the following remarks today regarding the National
Labor Relations Board. Below are his remarks as prepared for delivery:
In a partisan environment, there is the temptation turn every issue into a political issue. We certainly live in
one of those environments.
Thats regrettable, but far from unfamiliar. Politics play a role in our representative government, of course,
and they always have. The Founders created a system of checks and balances three branches of government,
for example, and two chambers of the Congress precisely because they anticipated these passions. They
wanted to keep us from losing our way.
Long after that system was created, a new independent federal agency was created in the same spirit of checks
and balances. That agency is the National Labor Relations Board, and it acts as a check on employers and
employees alike. It safeguards employees rights to unionize or not to unionize, if they so choose. It mediates
allegations of unfair labor practices. And it does all this independent of any outside influence.
NLRB-FOIA-00005403
2
The acting general counsel of the NLRB is a man who is as nonpartisan and independent as the agency he
works for. Last month, he issued a complaint against one of Americas largest companies, Boeing. The
complaint alleges that after Boeing workers in some states went on strike, the company retaliated by opening a
new production line in a non-union facility. That kind of retaliation, if thats what happened, is illegal.
Thats just the background. Im not here to judge the merits of the case. In fact, Im here to do the exact
opposite: to remind the Senate that prejudging the case is not our job. That would overstep long-established
boundaries and weaken our system of checks and balances.
Lately, though, some of our Republican colleagues have attacked the NLRB and tried to poison the decision-
making process. They are interfering with case pending before a legal body.
For example, every Republican Senator on the HELP Committee the L in HELP stands for labor, of course
sent the acting general counsel a letter defending Boeing. The letter itself, sent six weeks before a hearing
even takes place, seems questionable at best. But these 10 Republicans went further: they went out of their way
to link their request to the acting general counsels pending nomination. Sounds like intimidation to me.
Thats not all. Eight state attorneys general, all Republicans, also signed a letter to the acting general counsel,
calling on him to withdraw the complaint against Boeing again, long before an administrative judge has the
opportunity to review the case.
I strongly encourage all of them to take a step back. We all know Republicans dislike organized labor. We
know they disdain unions because unions demand fairness and equality from the big businesses Republicans so
often shield at all costs.
And lets be honest: Republicans are threatened by unions. Theyre threatened because when a large,
organized group is so concerned with workers rights, the members of that group vote in large numbers. And
because Republicans and the big businesses they defend so often try to take away workers rights, workers dont
often vote Republican.
But this kind of interference is inappropriate. It is disgraceful and dangerous. We wouldnt allow threats to
prosecutors or U.S. Attorneys, trying to stop them from moving forward with charges they see fit to bring to the
courts. And we shouldnt stand for this. It may not be illegal, but its no better than the retaliation and
intimidation that is the fundamental question in this case. It should stop.
We need agencies like the NLRB to be able to operate freely and without political pressures. We need to keep
our independent agencies independent. This case is for them to decide, not us.
###
To unsubscribe from the DPCC-PRESS list, click the following link:
&*TICKET_URL(DPCC-PRESS,SIGNOFF);
_____________________________________________________________
Notice: This message is intended for the addressee only and may contain privileged and/or
NLRB-FOIA-00005404
3
confidential information. Use or dissemination by anyone other than the intended recipient is
prohibited.
____________________________________________________________
NLRB-FOIA-00005405
NLRB-FOIA-00005406
1
Microsoft Outlook
Subject: RE: Sen REID - MUST KEEP INDEPENDENT AGENCIES INDEPENDENT - OPERATE
Nice!
Nancy Cleeland
(202) 273-0222
Subject: FW: Sen REID - MUST KEEP INDEPENDENT AGENCIES INDEPENDENT - OPERATE FREELY AND WITHOUT
POLITICAL PRESSURE
NLRB-FOIA-00005407
2
NLRB-FOIA-00005408
3
###
_____________________________________________________________
prohibited.
____________________________________________________________
NLRB-FOIA-00005409
NLRB-FOIA-00005410
1
Microsoft Outlook
To: Anzalone, Mara-Louise
Subject: RE: Edits to Ellen's version using track changes
No worriessafe travel.
R
From: Anzalone, Mara-Louise
Subject: Re: Edits to Ellen's version using track changes
Sorry - gone. I could look at it on email.
On May 17, 2011, at 5:10 PM, "Ahearn, Richard L." <Richard.Ahearn@nlrb.gov> wrote:
Take a look and stop by?
Thx.
R
From: Pomerantz, Anne
Subject: Edits to Ellen's version using track changes
Please see attached. I apologize if there are any typos.
Anne P. Pomerantz
Regional Attorney | National Labor Relations Board | Region 19
2948 Jackson Federal Building, 915 Second Ave., Seattle, WA 98174
anne.pomerantz@nlrb.gov | (206) 220-6311 | (206) 220-6305
Please consider the environment before printing this email
NLRB-FOIA-00005411
1
Microsoft Outlook
From:
Subject: seattletimes.com: Boeing will build next 787's first horizontal tails in Seattle
This message was sent to you by as a service of The Seattle Times
http://www.seattletimes.com.
----------------------------------------------------------------------
Boeing will build next 787's first horizontal tails in Seattle
Boeing Commercial Airplanes chief Jim Albaugh confirmed for the first time Tuesday that the
company intends to do initial production work...
http://seattletimes.nwsource.com/html/businesstechnology/2015138417_boeing25.html
======================================================================
TO SUBSCRIBE TO THE SEATTLE TIMES PRINT EDITION
Call (206) 464-2121 or 1-800-542-0820, or go to http://seattletimes.com/subscribe
HOW TO ADVERTISE WITH THE SEATTLE TIMES COMPANY ONLINE For information on advertising in this
e-mail newsletter, or other online marketing platforms with The Seattle Times Company, call
(206) 464-3237 or e-mail websales@seattletimes.com
TO ADVERTISE IN THE SEATTLE TIMES PRINT EDITION Please go to
http://www.seattletimescompany.com/advertise
for information.
======================================================================
Copyright (c) 2009 The Seattle Times Company
www.seattletimes.com
E.6 Privacy
E.6 Privacy
NLRB-FOIA-00005412
1
Microsoft Outlook
Sent: Sunday, June 19, 2011 9:41 AM
To: Pomerantz, Anne; Anzalone, Mara-Louise; Finch, Peter G.; Harvey, Rachel; Todd, Dianne
Subject: FW: seattletimes.com: Boeing exec: Charleston 787 plant could match Everett someday
From:
Sent: Saturday, June 18, 2011 11:22 PM
Subject: seattletimes.com: Boeing exec: Charleston 787 plant could match Everett someday
----------------------------------------------------------------------
Boeing exec: Charleston 787 plant could match Everett someday
Boeing supply-chain chief Ray Conner is bullish about the future of the second 787 Dreamliner
assembly site in North Charleston, S.C.
http://seattletimes.nwsource.com/html/businesstechnology/2015331150_airshowside19.html
======================================================================
for information.
======================================================================
Ex. 6 personal privacy
NLRB-FOIA-00005413
1
Microsoft Outlook
Rich,
but would
e mail.
hope
Keep in touch,
Celeste
E.6 Privacy
NLRB-FOIA-00005414
2
stoppages.
will disappear.
America.
NLRB-FOIA-00005415
1
Microsoft Outlook
Good news from today is the ALJ quashed Boeings subpoena to
us. Yea!
Cheers,
rich
Rich,
but would
e mail.
hope
Keep in touch,
Celeste
E.6 Privacy
E.6 Privacy
NLRB-FOIA-00005416
2
stoppages.
will disappear.
America.
NLRB-FOIA-00005417
3
NLRB-FOIA-00005418
1
Microsoft Outlook
Sent: Tuesday, April 19, 2011 10:52 AM
Subject: The Boeing Company, 19-CA-32431
Attachments: ADV.19-CA-32431.Boeing Response 2 Boeing dlw.doc
Mara, Memo.
R
NLRB-FOIA-00005419
United States Government
National Labor Relations Board
OFFICE OF THE GENERAL COUNSEL
Advice Memorandum
DATE: April 11, 2011
S.A.M.
TO: Richard L. Ahearn, Regional Director
Region 19
FROM: Barry J. Kearney, Associate General Counsel
Division of Advice
SUBJECT: The Boeing Company 512-5006-5062 524-8307-1600
Case 19-CA-32431 512-5006-5067 524-8307-5300
512-5036-8387 530-6050-0825-3300
512-5036-8389 530-6067-4011-4200
524-0167-1033 530-6067-4011-4600
524-5029-5037 530-6067-4011-7700
524-0167-1033 530-8054-7000
524-506 775-8731
The Region submitted this case for advice on several
issues relating to the Employers decision to place a second
assembly line at a nonunion facility rather than at the
facility where unit employees work on the original assembly
line. Specifically the Region requested advice as to whether:
(1) the Employer violated Section 8(a)(1) by threatening to
place the second assembly line at a nonunion facility unless
the Union agreed to a long-term no-strike clause and by
repeatedly stating that its decision to place the second line
elsewhere was based on the units strike history; (2) the
Employer violated Section 8(a)(3) by deciding to place the
second assembly line at a nonunion facility because of the
units strike history, even though no unit employees have yet
to lose their jobs; and (3) the Employer violated Section
8(a)(5) by failing to bargain in good faith over its decision
about where to locate the second assembly line or whether the
Union waived its right to bargain under the parties
collective-bargaining agreement.
We conclude that the Region should issue a complaint
alleging: independent Section 8(a)(1) violations based on the
Employers coercive and threatening statements; and a Section
8(a)(3) violation based on the Employers decision to locate
the second line at a nonunion facility and to establish a
dual-sourcing supply program in retaliation for protected
activity. However, the Region should dismiss the Section
8(a)(5) allegations because under the contract, the Union
expressly waived its right to bargain about the Employers
decision to offload unit work to a facility not covered by
the agreement. To remedy the chilling effect of Boeings
Section 8(a)(1) statements, the Region should request, in
addition to the traditional remedies, a notice reading by a
NLRB-FOIA-00005420
Case 19-CA-32431
- 2 -
high-level Boeing official. To remedy the Section 8(a)(3)
violation, the Region should seek an order that would require
Boeing to maintain the surge line in the Puget Sound area.
Specifically, Boeing intended for the second line to assemble
three aircraft each month in South Carolina, while assembling
seven planes on the first line. Thus, the Region should seek
an order requiring Boeing to assemble in the Puget Sound area
the first ten 787 aircraft that it produces each month and to
maintain the supply lines for those aircraft where they
currently exist, in the Puget Sound and Portland facilities.
FACTS
The Boeing Company is an international corporation
engaged primarily in developing and producing military and
commercial aircraft. Boeing has a long-established collective-
bargaining relationship with the International Association of
Machinists and Aerospace Workers (IAM) and certain IAM
District and Local Lodges. The parties current collective-
bargaining agreement is effective November 2, 2008 through
September 8, 2012 and covers three separate bargaining units
of production and maintenance employees in three geographical
areas, the Puget Sound area in Washington; Portland, Oregon;
and Wichita, Kansas.
Section 21.7 of that agreement, entitled
Subcontracting, sets forth various notice periods and an
opportunity for the Union to review and recommend alternatives
to Boeing proposals to subcontract or offload unit work.
[O]ffloading work is defined as moving work from one
Company facility to another Company facility not covered by
this Agreement[.] Less stringent notice requirements apply
to subcontracting and offloading decisions affecting less than
ten employees. In addition, the notice and review process
does not cover certain work transfers listed in subsections
(a) through (d), including [d]ecisions to subcontract or
offload work due to lack of capability or capacity, or to
prevent production schedule slippage[.] Section 21.7
concludes with the following language:
Anything in this Section 21.7 to the contrary
notwithstanding, it is agreed that ... the Company has
the right to subcontract and offload work, to make and
carry out decisions in (a) through (d) above, to enter
offsets and offset arrangements, and to designate the
work to be performed by the Company and the places where
it is to be performed, which rights shall not be subject
to arbitration. ...
NLRB-FOIA-00005421
Case 19-CA-32431
- 3 -
Boeing Introduces the 787 Dreamliner
The Puget Sound unit is comprised of approximately 18,000
employees working in Washington. Historically these employees
have performed the final assembly of all Boeing planes. In
late 2003, Boeing announced that it would place the assembly
line for its new 787 Dreamliner airplane in Everett,
Washington after the Washington State Legislature passed a tax
and subsidy incentive package totaling more than $3.2 billion.
That line opened in May 2007, with the capacity for producing
seven planes each month.
With the 787, Boeing departed from its previous practice
of manufacturing most of the aircraft parts with its own
employees and instead outsourced parts production to other
suppliers in the southeast U.S. and abroad. For example,
Boeing contracted with Vought Aircraft Industries in North
Charleston, South Carolina for the manufacture of the aft
fuselage and with Mitsubishi Heavy Industries in Japan for the
manufacture of the wings. Boeing repeatedly has had to
postpone the delivery dates for the aircraft, due primarily to
problems with suppliers and software issues.
Starting in mid 2008, the media began reporting that
Boeing would need to add a second 787 assembly line because of
its growing order backlog. At about the same time, Boeing
entered negotiations with the Union for a successor
collective-bargaining agreement. During those negotiations,
Company officials noted the need for a second assembly line
but did not discuss the matter further.
The 2008 Strike and Its Aftermath
On September 6, 2008, the employees struck in support of
the Unions bargaining position. On October 6, 2008, Boeings
stock dropped to a four-year low. That same day, CEO Jim
McNerney sent a long e-mail to Boeing employees about the
strike. McNerney stated that he understood and shared the
frustration so many of you feel when we dont have the whole
team together working to meet the commitments weve made to
our customers and competing to win the new business that will
sustain and grow Boeing jobs[.] McNerney went on to state,
[t]he issue of competitiveness as it relates to this strike
is a big deal[.] He also tied labor disputes to problems
with Boeings customer relationships. After asserting that
the Union had recommended that its members reject contract
offers and go on strike four of the last five negotiations
going back to 1995, he wrote, we believe this track record of
repeated union work stoppages is earning us a reputation as an
NLRB-FOIA-00005422
Case 19-CA-32431
- 4 -
unreliable supplier to our customers who ultimately provide
job security by buying our airplanes.
1
The following day, Boeings Vice President for Government
and Community Relations Fred Kiga spoke at an aerospace
conference in Everett. In a Seattle Times article, he was
quoted as stating, We cant afford to become known as the
strike zone[.] He reportedly also told the conference that
labor unrest could drive Boeings decision on where to build
planes in the future. In an interview after his speech, Kiga
reportedly stated that his strike zone comments had been
cleared by Boeing Commercial Airplanes CEO Scott Carson. Kiga
noted that he and Carson grew up in and shared a love for the
Northwest; Kiga then said that they would hate to lose a
treasure like Boeing.
The strike lasted 57 days and ended on November 1, 2008,
when the parties signed the current contract. During the
negotiations, the Union had proposed to amend Section 21.7 to,
among other things, eliminate the waiver language quoted
above. Boeing refused to agree to such an amendment, and the
language remained in the contract.
In early 2009,
2
the media again began publishing reports
that Boeing needed to establish a second 787 assembly line.
On February 9, the Seattle Times reported that Washington
Senator Patty Murray had met with Boeings Senior Vice
President of Government Operations; he had informed her that
the CEO was sick and tired of the unions strikes and was
looking to put the second 787 line elsewhere.
On April 16, Boeing and IAM officials held their annual
summit in Chicago. Management officials attending included
CEO McNerney, Boeing Commercial Airplanes CEO Carson,
Integrated Defense Systems CEO Jim Albaugh, and for the first
time, Vice President and General Manager of Supply Chain
Management & Operations Ray Conner. IAM representatives
included International President Tom Buffenbarger, General
Vice President Rich Michalski, and the Directing Business
Representatives who represented Boeing employees, including
District 751 DBR Tom Wroblewski. This was the first
opportunity for the parties to meet since the strike had
ended. McNerney and Buffenbarger were the lead speakers.
McNerney stated that Boeings customers were losing confidence
1
In his e-mail, CEO McNerney exaggerated the number of times
that the Union had struck. In actuality, prior strikes
occurred in 1948 (140 days), 1965 (19 days), 1977 (45 days),
1989 (48 days), 1995 (69 days), and 2005 (28 days).
2
Dates are in 2009 unless otherwise noted.
NLRB-FOIA-00005423
Case 19-CA-32431
- 5 -
in the Company because of past strikes and the possibility of
future strikes. He said that the parties had to come up with
a way to stop having labor disputes. The general theme was
that management and labor should continue to meet to find ways
to avoid the problems of the past.
As a follow-up to this summit, Wroblewski and IAM
Aerospace Coordinator Mark Blondin met on June 23 in Seattle
with Conner and Boeings Vice President of Human Resources
Doug Kight. The parties focused on how to build a better
relationship and improve communication. While Wroblewski had
an established relationship with Kight, Conner was new to
labor relations. Wroblewski thought that one of the purposes
of the meeting was to get to know Conner. At a subsequent
meeting on June 30 between Wroblewski and Conner, Conner
expressed Boeings concern that its customers did not have
confidence it could make timely deliveries because it had
experienced two strikes in the last five years and had
supplier issues. For the first time, Conner raised the
prospect of a long-term collective-bargaining agreement as a
way to gain the customers confidence that they would get
their aircraft on time.
In early July, Boeing announced its intent to purchase
the Vought plant in North Charleston, South Carolina. IAM
Local Lodge 183 represented the Vought production,
maintenance, and quality employees. Boeing agreed to
recognize the Union but wanted to negotiate a new collective-
bargaining agreement.
On July 8, the Seattle Times reported that Boeings CEO
had informed Washington Congressmen Norm Dicks and Jay Inslee
that as a result of past strikes, the Company would place the
second line outside the Puget Sound area unless it could reach
a long-term contract with the Union. Boeing told the
Congressmen that South Carolina was the main competitor.
Wroblewski, Blondin, Kight, and Conner met again twice in
July, on July 7 and July 23. At each of these meetings,
Conner and Kight emphasized that strikes had to stop for
Boeing to be viable. They stated that Boeing needed a long-
term agreement with no-strike language to satisfy their
customers. At this point, Boeing was two years behind
schedule and had approximately 850 787 planes on back order as
a result of supplier and software problems.
Then, on July 30, the same date that Boeing announced
that it had purchased Voughts plant, a South Carolina
employee filed a decertification petition. During August,
Boeing denied the Union access to the employees in the North
Charleston plant and wrote a memorandum to the employees
stating that it preferred to deal with employees directly
NLRB-FOIA-00005424
Case 19-CA-32431
- 6 -
without intermediaries.
3
Boeing also issued a FAQ document
to the employees stating that the mass layoffs that took place
at the Vought plant in late 2008 were due to the unique
situation created by the Everett strike. Meanwhile, the
South Carolina press was reporting that a decertification
decision could influence where Boeing located the second 787
assembly line. For example, The Post and the Courier reported
that South Carolinas low unionization rate is viewed as an
advantage in the 787 chase[.] An article in the Charleston
Business Journal asserted that Charleston might be a better
choice in the event of decertification because of its
potentially tamer work force instead of the Washington
workers with a history of walk[ing] off the job.
On August 26, Boeing e-mailed its managers and human
resource professionals that it had notified South Carolina
that it intended to file permits for the construction of a
second 787 line but that it had not yet made a decision as to
where to locate the second line. The following day, Boeing
and Union officials met in Portland to discuss the prospect of
a long-term agreement. Carson informed the Union that the
only way Boeing would place the second line in Washington was
if the Union agreed to a twenty-year no-strike agreement.
Boeing suggested a series of three-year agreements with an
overarching twenty-year no-strike pledge until 2032 and
binding interest arbitration if no agreement was reached at
the end of each of the three-year contracts. The Union said
that this was not possible, but the Union would consider a
longer agreement than the current four-year contract in return
for some sort of neutrality agreement. At the end of the
meeting, the parties agreed to schedule negotiations for a
long-term agreement.
Meanwhile, the decertification election in South Carolina
was scheduled for September 10. In reporting on Boeings
permit filings in South Carolina, the Puget Sound Business
Journal characterized this vote as [a] wild card in Boeings
decision about where to locate the second line. On September
2, Kight presented an hour-long video on Boeings website
(later quoted in a September 29 article in the Seattle Times).
In regard to the second line, he stated:
What do you do with the 787 second line so that we can
build up to rate and meet our commitment to customers?
... Theres a lot of issues to look at, a lot being
studied, no decision has been made. But truthfully, it
is very clear that this triennial disruption, our
3
The Union filed a Section 8(a)(5) charge alleging that
Boeing unilaterally changed its access rules but withdrew the
charge following the election.
NLRB-FOIA-00005425
Case 19-CA-32431
- 7 -
customers cant live with it anymore. So weve become an
unreliable supplier.... So we look at how do we become a
reliable supplier. How do we ensure production
continuity so that we can meet our commitments to our
customers in a timely way and thats what were trying to
do.
The Union lost the election in South Carolina eight days later
and was decertified on September 18.
As a follow-up to the parties August 27 meeting in
Portland, CEO McNerney wrote to IAM International President
Buffenbarger on September 21 that Boeing planned to make a
decision on the second lines location by the end of October
and wanted the Unions input within the next three to four
weeks. He stated, I look forward to our respective teams
engaging in fruitful dialog. Two days later, Boeing filed an
application for a storm water permit with the City of North
Charleston and an overall site plan with the State of South
Carolina. On October 1, Boeing applied to North Charleston
for a site clearing permit.
The Parties Meet over a Long-Term Agreement
The parties opened negotiations for a long-term agreement
on October 1. At the start of negotiations, Boeing explained
that placement of the second line in Washington depended on a
long-term agreement to insure no further disruptions in
deliveries to customers. The Union responded that in exchange
for giving up the right to strike, the parties would need to
resolve economic issues for the long term rather than through
interest arbitration every three years.
The parties met again on October 7, 8, and 15. The Union
maintains that Boeing never submitted a written proposal or
counter-proposal, that it was in the dark as to what Boeing
wanted, and that in effect it was negotiating against itself.
For example, with respect to the length of the agreement, at
various points Boeing requested a contract ending in 2020 or
2022 but at other times, demanded a twenty-year agreement. In
terms of wages, Boeing wanted to reduce general wage increases
and move toward a profit-sharing incentive program. The Union
was not adverse to this concept but requested information to
insure that Boeings measures of productivity were tied to
employee performance and not events beyond the employees
control. At one point, Boeing stated that the general wage
increase and COLA could not exceed 3.5%. When a Union
negotiator asked what would happen if the cost of living
increased more than 3.5%, Boeing responded that employees
would get more. On October 15, for the first time, Boeing
said that it wanted a lower wage structure for new hires and a
NLRB-FOIA-00005426
Case 19-CA-32431
- 8 -
defined contribution plan for them rather than the defined
benefit pension plan that the existing employees enjoyed.
The Union repeatedly raised the issues of job security
and Employer opposition to the Union elsewhere. The Union
argued that in return for giving up the right to strike during
the long-term, employees needed enhanced job security. Also,
if the parties relationship were to improve, the Union did
not want to face the type of anti-union conduct Boeing had
engaged in during the decertification campaign in South
Carolina.
At the October 15 session, Conner informed the Union that
the Board of Directors would be meeting on October 26 and he
wanted to give the Board a progress report on the
negotiations. The Union asserts that Boeing never described
the Board of Directors meeting as a deadline for resolving the
outstanding bargaining issues. Moreover, Boeing never
provided a concrete proposal that could be put to the unit
employees for a vote.
The parties met again on October 20 and 21. Conner
stated that Boeing was getting close to making its decision on
the location of the second line and it would be discussed at
the Board meeting on October 26. By the end of the parties
October 21 session, the Union orally had proposed the
following: an extension of the existing contract to 2020, 3%
annual wage increases plus a 1% COLA, ratification bonuses for
unit employees, an incentive pay program, health cost sharing
towards the end of the contract, annual increases in pension
benefits starting in 2013, and neutrality in connection with
Union organizing campaigns. In addition, the Union presented
Boeing with a two-page document entitled Rough Draft on
Concepts for a long-term agreement and a joint partnership
committee. This Draft called for retention of current unit
work; location of the second line in the Puget Sound area; and
six-month advance notice and good-faith bargaining over any
decision to establish an assembly operation for any next
generation product. Boeing asserts that this rough draft
was the Unions last and final offer, but the Union
disagrees and also maintains that its negotiators had no idea
that this would be the parties final session. Indeed, the
Union negotiator involved in working out the details of the
incentive pay program sent an e-mail to Kight on October 27
requesting further information. Kight responded that he would
get back to him.
Meanwhile, on October 21, Boeing posted its quarterly
earnings conference call on its intranet site for employees.
With respect to locating the second line in South Carolina,
CEO McNerney stated:
NLRB-FOIA-00005427
Case 19-CA-32431
- 9 -
[T]here would be some duplication. We would obviously
work to minimize that. But I think having said all of
that, diversifying our labor pool and our labor
relationship has some benefits. ... And so some of the
modest inefficiencies, for example, associated with the
move to Charleston, are certainly more than overcome by
strikes happening every three or four years in Puget
Sound. And the very negative financial impact of [sic]
the company, our balance sheet would be a lot stronger
today had we not had a strike last year. Our customers
would be a lot happier today had we not had a strike last
year, and the 787 program would be in better shape....
And I dont blame this totally on the union. We just
havent figured out a way - the mix doesnt - isnt
working well yet. So, weve either got to satisfy
ourselves that the mix is different or we have to
diversify our labor base.
McNerney stated that a decision would be made in the next
couple of weeks.
Two days later, IAM General Vice President Michalski
called Conner to ask about the status of the negotiations.
Conner stated that the Unions economic terms and demand for
neutrality were unacceptable to Boeing. Michalski explained
that the Union was not asking for a traditional neutrality
agreement but rather, as explained during negotiations, a code
of conduct. Michalski stated that the Union was willing to
meet at any time for additional negotiations, but Conner did
not respond. On October 24, Michalski called Senior Vice
President of Operations Tim Keating to reiterate that the
Union was not seeking a true neutrality agreement. He wanted
to clear up any misunderstanding if that issue was blocking
the parties ability to reach an agreement. Keating did not
respond, and no further negotiations were ever scheduled.
Meanwhile, the governmental bodies in South Carolina were
moving quickly to facilitate the second lines placement in
their State. On October 23, North Charleston approved
Boeings request for a storm water permit, and the State of
South Carolina approved Boeings overall site plan. On
October 27, the South Carolina legislature, in a special
session, approved $170 million in taxpayer-backed bonds for
Boeings startup costs and tax breaks totaling $450 million in
exchange for Boeings agreement to create at least 3,800 jobs
and invest more than $750 million in the State within the next
seven years. That same day, North Charleston approved
Boeings site clearing permit.
Boeing contends that it entered these negotiations with a
good-faith intention to reach a long-term agreement that would
have resulted in placing the second line in Washington, but
NLRB-FOIA-00005428
Case 19-CA-32431
- 10 -
the Unions economic demands were too costly and its
insistence upon neutrality and job security were unacceptable.
The Union asserts, however, that Boeings failure to submit
any proposals, its rejection of the Unions serious efforts to
address Boeings purported concerns, and then its precipitous
halting of negotiations as soon as the South Carolina
legislature awarded it a generous tax and subsidy package
demonstrate that the negotiations were in fact a sham.
Boeing Announces its Decisions to Locate the Second Line in
South Carolina and to Establish a Dual-Sourcing Program
On October 28, Boeing announced its decision to locate
the second 787 assembly line in South Carolina. In a press
release and internal e-mails, Boeing stated that the Board of
Directors had just approved the selection of North Charleston.
Boeing also announced that it intended to build a surge line
in Everett - a temporary second assembly line that would be
phased out once the South Carolina line was up and running.
Boeing issued a memo to its managers on October 28 that
provided answers to anticipated questions from employees and
talking points regarding its decision. The managers were
advised to inform employees, among other things, that the
decision to locate the second line in Charleston would
provide economic advantages by improving our competitiveness
and reducing vulnerability to delivery disruptions due to a
host of factors, from natural disasters to homeland security
issues and work stoppages. The memo further stated, In the
final analysis, this came down to ensuring our long-term
global competitiveness and diversifying the company to protect
against the risk of production disruption ... from natural
disasters, to homeland security threats, to work stoppages.
On December 3, Boeing notified its fabrication managers
that it intended to create a dual-sourcing program and
contract separate suppliers for the South Carolina assembly
line. As a result, employees in the Puget Sound and Portland
units who produce parts for the 787 assembly line are likely
to suffer a loss of work. Articles that appeared in the
Seattle Times on December 7 and the Puget Sound Business
Journal on December 8 discussed this announcement. The
Seattle Times quoted Boeing spokesman Jim Proulx as stating,
Repeated labor disruptions have affected our performance in
our customers eyes. We have to show our customers we can be
a reliable supplier to them. [The second production] line has
to be able to go on regardless of whats happening over here.
The Puget Sound Business Journal quoted Conner as follows:
Dual-sourcing and co-production will allow us to maintain
production stability and be a reliable supplier to our
customers.
NLRB-FOIA-00005429
Case 19-CA-32431
- 11 -
On March 2, 2010, a Seattle Times journalist conducted a
videotaped interview of Boeings new Commercial Airplanes CEO,
Jim Albaugh. (Albaugh had moved over from his position as
Integrated Defense Systems CEO to replace Carson.) The
interviewer asked Albaugh some hard questions on behalf of
the Washington community about Boeings decision to locate the
second 787 line in Charleston. In explaining Boeings
decision, Albaugh repeatedly referenced the Unions strike
history. For example, he stated:
The issue last fall was really about, you know, how
we could ensure production stability and how we
could ensure that we were competitive over the long
haul. And we had some very productive discussions
with the union. And unfortunately, we just didnt
come to an agreement where we felt we could ensure
production stability. And read [sic] that is [sic]
getting away from the frequent strikes that we were
having and also could we stop the rate of escalation
of wages. And we just could not get to a place
where we both felt it was a win for both ourselves
and the union so we made the decision to go to
Charleston.
[W]eve had strikes three out of the last four times
weve had a labor negotiation with the IAM. ... And
weve got to get to a position where we can ensure
our customers that every three years theyre not
going to have a protracted shutdown.
It was about ensuring to our customers that when we
commit to deliver airplanes on certain dates that we
actually do deliver. And we have lost our
customers have lost confidence in our ability to do
that, because of the strikes.
When asked whether going to Charleston, in light of the
expense and risk, made business sense, he responded:
Theres no question that whenever you go to a green field
site, theres risk involved. At the same time, with the
protracted labor stoppage that we had ... the fall of
2008, I mean that cost the company billions of dollars.
And I think if you compare, you know, what it cost
because of the stoppages versus the cost and the risk of
starting a new line in Charleston, I think the investment
certainly is the right one for us to make.
4
4
Once again, a Boeing CEO grossly exaggerated the burden of
the Unions strike activity. Boeing had alleged elsewhere
that the 2008 strike reduced its earnings by $1.8 million, far
NLRB-FOIA-00005430
Case 19-CA-32431
- 12 -
At one point, Albaugh summed up the basis of Boeings
decision as follows:
[t]he overriding factor was not the business climate.
And it was not the wages were paying today. It was that
we cannot afford to have a work stoppage, you know, every
three years. We cannot afford to continue the rate of
escalation of wages....
Albaugh also implicitly threatened the loss of additional work
because of Union strikes, stating, [w]ell do work here if we
can make sure that we have the stability of the production
lines and that we can be competitive over the long haul.
Production is now approximately three years behind
schedule. Approximately 2,900 Puget Sound unit employees
currently work on the 787 assembly line. Approximately 1,740
of them are working on out-of-sequence assembly work, away
from the main assembly line. Once supply issues are resolved
and assembly can be accomplished in sequence on the line, it
is anticipated that the number of employees will drop by
approximately 60%. Boeing asserts that the South Carolina
plant will be ready to begin assembly work in mid 2011.
Approximately 1,000 mechanic and flight line jobs will be
added in South Carolina at that time.
ACTION
This case involves Boeings transfer of work from an
experienced unionized workforce to a new, nonunion facility.
Boeings decision was motivated by antiunion considerations.
From the time of the Unions strike in the fall of 2008,
Boeing made clear to its unionized workforce that it would not
countenance further strikes. Time and again, in e-mails to
employees, on its intranet site, in the media, and in talks
with the Union, Boeing tied its ability to compete to the
avoidance of future strike activity. Then, when Boeing
purchased the Vought facility in South Carolina, its officials
denied the Union access to employees at the facility. It also
let the employees know that it preferred to deal with them
directly rather than through their Union and their receipt of
the second line hinged on their vote in a decertification
election. Simultaneously, Boeing officials told the Puget
Sound unit employees that they could retain all of the 787
assembly work only by waiving their right to strike for twenty
years. Although the Union entered negotiations with Boeing
less than the billions of dollars that Albaugh claimed in
this interview.
NLRB-FOIA-00005431
Case 19-CA-32431
- 13 -
and made major concessions in an effort to address its stated
concerns, once the Union was decertified in South Carolina,
Boeing courted the South Carolina legislature and applied for
the necessary permits from the South Carolina regulatory
bodies - even as it continued the motions of negotiating with
the Union. As soon as South Carolina approved the financial
incentives for Boeing, Boeing called off negotiations and
announced its decision. Boeings CEO admitted that the
overriding factor for moving work to South Carolina was the
employees strike activity. Moreover, to reinforce the
message to unit employees, he intimated that the continuation
of any work in Washington was contingent on the stability of
the production lines, a veiled threat designed to coerce
employees to abstain from future strikes. Nor could Boeing
credibly blame the 787 production delays on employees 2008
strike activity, which halted production for approximately two
months. Rather, the delay resulted primarily from its own
business decision to outsource the manufacture of the aircraft
components to various suppliers and from unexpected software
problems.
Further, the fact that it made little practical sense to
locate this second line in South Carolina, despite a two-and-
a-half-year delay in the production of its new 787 aircraft,
rather than its existing facilities in Washington, supports a
finding of unlawful motivation. While South Carolina would
not be ready for production for two years because of the need
for substantial capital improvements and the hiring and
training of a new workforce, Washington was already up and
running, with the space, the necessary equipment, and a
significant complement of trained employees.
On these facts, we conclude that the Region should issue
a complaint alleging: independent violations of Section
8(a)(1) based upon Boeings coercive and threatening
statements to employees on the intranet and through the media;
and a violation of Section 8(a)(3) based upon Boeings
decision to place the second line in South Carolina and to
establish a dual-sourcing supply program in order to retaliate
against the unit employees for engaging in protected Union
activity. We would also argue, in the alternative, that
Boeings actions were inherently destructive of employee
rights. But the Region should dismiss the Section 8(a)(5)
allegations because the Union waived its right to bargain
about Boeings decision to offload unit work to a facility not
covered by the parties agreement. Finally, to remedy the
Section 8(a)(1) and (3) violations, the Region should seek: a
notice reading by a high-level Boeing official in addition to
the traditional remedies; and an order requiring Boeing to
assemble in the Puget Sound area the first ten 787 aircraft
that it produces each month and to maintain the supply lines
for those aircraft in the Puget Sound and Portland facilities.
NLRB-FOIA-00005432
Case 19-CA-32431
- 14 -
I. The Employer Violated Section 8(a)(1)
The Supreme Court long ago delineated the line between
employer speech protected under Section 8(c) of the Act and
threats of reprisals violative of Section 8(a)(1).
5
The Court
ruled in Gissel that an employer may make a prediction as to
the effects of unionization but that prediction must be
carefully phrased on the basis of objective fact to convey an
employers belief as to demonstrably probable consequences
beyond his control[.]
6
On the other hand, threats of
economic reprisal to be taken solely on [the employers] own
volition violate Section 8(a)(1).
7
In General Electric Company, the Board applied the Gissel
test to set aside an election because the employer threatened
a long-term loss of work based on the possibility of a strike
at some future time.
8
Faced with a union organizing drive,
the employer gave multiple speeches touting its two-source
supplier strategy.
9
The employer stated that it had
established its nonunion plant so that customers could get the
motors they needed during the seven strikes at its union
plant. The employer also made clear that the plants nonunion
status was the reason it had experienced a rise in
employment.
10
And the employer conveyed the message that the
plant remaining nonunion was an important, if not a decisive,
factor in any company decision to choose that plant as a
second manufacturing facility for the new motor the employer
planned to introduce.
11
The Board concluded that although the
employer might want to insure itself against production
interruptions caused by employee concerted activity, no such
insurance is legally possible, for the simple reason that
employees have a federally protected right to engage in such
activity.
12
The Board expressly distinguished an employers
right to take defensive action when threatened with an
5
See NLRB v. Gissel Packing Co., 395 U.S. 575, 618 (1969).
6
Ibid.
7
Id. at 619 (citation omitted).
8
See 215 NLRB 520, 522-23, fn. 6 (1974).
9
See id. at 520.
10
See id. at 520-21.
11
See id. at 521.
12
See id. at 522.
NLRB-FOIA-00005433
Case 19-CA-32431
- 15 -
imminent strike from threats to transfer work merely because
of the possibility of a strike at some speculative future
date.
13
The Board repeatedly has held that an employer violates
Section 8(a)(1) by threatening to withhold work opportunities
because of the exercise of Section 7 rights.
14
Thus, telling
employees that they will lose their jobs if they join a strike
violates Section 8(a)(1).
15
Similarly, in Kroger Co., the
employer unlawfully threatened to put its plan to build a new
freezer facility for its distribution center on hold because
of intraunion unrest and labor disputes.
16
Further, where an employer unconditionally predicts a
loss of customers due to unionization or strike disruptions
without any factual basis, its predictions amount to
unlawful threats.
17
Rather, an employers predictions of
customer disaffection must be based on objective facts.
18
Thus, in Curwood, Inc., an employer lawfully related its
13
See id. at 522, fn. 6.
14
See, e.g., Kroger Co., 311 NLRB 1187, 1200 (1993), affd.
mem. 50 F.3d 1037 (11
th
Cir. 1995); General Electric Co., 321
NLRB 662, fn. 5 (1996), enf. denied 117 F.3d 627 (D.C. Cir.
1997).
15
Aelco Corp., 326 NLRB 1262, 1265 (1998). See also Dorsey
Trailers, Inc., 327 NLRB 835, 851 (1999), enfd. in pertinent
part 233 F.3d 831 (4
th
Cir. 2000) (threat to close the plant if
the employees went out on strike).
16
311 NLRB at 1200. See also General Electric Co., 321 NLRB
at 662, fn. 5 (employer conveyed to employees that
unionization could result in the withholding of further
investment in the plant or its closure).
17
See, e.g., Tawas Industries, 336 NLRB 318, 321 (2001) (no
objective basis for prediction that customers, fearing
strikes, would not give their business to the employer if the
employees independent union affiliated with the UAW);
Tradewaste Incineration, 336 NLRB 902, 907-08 (2001)
(prediction that 90% of the customers would not deal with a
union facility because of fear of a work stoppage was not
based on objective facts); Debbie Reynolds Hotel, 332 NLRB
466, 466 (2000) (no factual basis for statements about having
to move productions and equipment elsewhere because customers
would not be able to afford employers facilities if employees
unionized).
18
Curwood, Inc., 339 NLRB 1137, 1137-38 (2003).
NLRB-FOIA-00005434
Case 19-CA-32431
- 16 -
customers concerns about strikes, where the employer produced
written inquiries from customers seeking information about its
contingency plans in the event of a strike.
19
An employer may
also reference the possibility that unionization, including
strikes, might harm relationships with consumers, as opposed
to predicting unavoidable consequences.
20
Here, the Union has alleged that several statements by
Boeing officials violated Section 8(a)(1). Some statements
were posted by Boeing on its website or intranet. Others were
reprinted in newspaper articles as direct quotes; although
such a quotation is hearsay, it would be admissible as an
admission (an exception to the hearsay rule), if the reporter
testifies.
21
By contrast, reporter summaries cannot form the
basis for a Section 8(a)(1) violation. And statements
recounted by political figures within newspaper articles are
in effect double hearsay and inherently unreliable.
Based on these principles, we find that the following
constitute unlawful threats under the Gissel standard:
(1) Boeing posted its quarterly earnings conference call
on its intranet for employees on October 21. During the call,
CEO McNerney made an extended statement about diversifying
our labor pool and moving work to South Carolina because of
strikes happening every three or four years in Puget
Sound.
22
His comments were indistinguishable from the
comments regarding a two-source supplier strategy found
violative in General Electric.
23
(2) Boeings October 28 memo to managers advised them to
inform employees that it decided to locate the second line in
South Carolina in order to reduce vulnerability to delivery
disruptions caused by, among other things, strikes. The
thrust of Boeings message to employees was that Boeing had
19
See id. 339 NLRB at 1137.
20
E.g., Miller Industries Towing Equipment, Inc., 342 NLRB
1074, 1075-76 (2004) (employer did not predict unavoidable
consequences).
21
Cf. Sheet Metal Workers Local 15 (Brandon Regional Medical
Center), 346 NLRB 199, 201-02 (2006), enf. denied on other
grounds 491 F.3d 429 (D.C. Cir. 2007) (newspaper report of
party admission is inadmissible hearsay because the reporter
was not available for cross-examination).
22
These same comments were quoted in the Seattle Times.
23
See 215 NLRB 520, 522-23 (1974).
NLRB-FOIA-00005435
Case 19-CA-32431
- 17 -
removed jobs from Puget Sound because employees had struck and
that they would lose work if they struck again.
24
(3) In articles that appeared in the Seattle Times and
the Puget Sound Business Journal on December 7 and 8
respectively, Boeing officials attributed the plan to use a
dual-sourcing system and contract separate suppliers for the
South Carolina line to past strikes and implicitly threatened
the loss of future work opportunities in the event of future
strikes.
25
(4) In a video-taped interview on March 2, Boeing
Commercial Airplanes CEO Albaugh expressly attributed the
Employers decision to locate the second line in South
Carolina to employee strikes and threatened the loss of future
work opportunities in retaliation for such protected
activity.
26
The above statements, disseminated through various
channels to unionized and nonunionized employees nationwide,
drove home the message: union activity could cost them their
jobs, while a decision to reject union representation could
bring those jobs to their communities.
II. The Employer Violated Section 8(a)(3)
The Employers decision to locate the second 787 line at
a nonunion facility and to establish a dual-sourcing program
to support that line violated Section 8(a)(3) because the
Employer acted in retaliation for the employees Union
activity and not for a legitimate business reason.
Initially, despite Boeings assertions that its decision
to locate a second 787 assembly line in South Carolina will
not adversely impact any current unit employees, there is no
question that the decision will direct work away from Puget
Sound employees with consequent adverse effects. Instead of
24
The Region should insure that this message was communicated
to employees.
25
The authors of these articles will need to testify. If
they resist testifying, and it becomes necessary to seek
subpoena enforcement, the Region should contact Advice.
26
Vice President Kights video-taped comments that Boeings
customers could not live with this triennial disruption and
that Boeing was looking to insure production continuity
cannot be alleged as an independent violation because they
were first posted on Boeings website on September 2, outside
the Section 10(b) period.
NLRB-FOIA-00005436
Case 19-CA-32431
- 18 -
assembling all of the 787 planes in Washington as originally
planned, once the second line opens in South Carolina, a
significant portion of the remaining 787 orders will be filled
by planes produced in North Charlestown. Future work
opportunities will be lost for employees on the surge line,
as well as unit employees waiting to transfer into the more
desirable 787 jobs. There are likely to be transfers to
older, less desirable aircraft assembly lines, demotions, and
layoffs. Moreover, Boeings adoption of its new dual-
sourcing program means that the Puget Sound and Portland unit
employees will produce parts only for planes assembled in
Washington and not for those planes assembled in South
Carolina, also causing the loss of employment opportunities
for unit employees and the likelihood of demotions and
layoffs. If no unit employees have been harmed yet, it is
merely because Boeings retaliatory decision has not yet been
implemented.
Recently, in Pittsburg & Midway Coal Mining Co., the
Board expressly reaffirmed that an actual financial loss is
not necessary to establish a Section 8(a)(3) violation.
27
In
that case, the employer revised its bonus policy in
retaliation for the employees use of contractual memorial
days to engage in work stoppages. Even though no employees
thereafter suffered a diminution of their bonuses, the Board
found a Section 8(a)(3) violation based upon the employers
retaliatory motive.
28
Moreover, the Board specifically has held that an
employer may not, for unlawfully motivated reasons, divert
unit work to a nonunion plant even where there is no immediate
impact on unit employees.
29
In Adair Standish Corp., the
employer refused to take delivery of a new press ordered for
its newly-organized Standish plant and installed it instead at
its nonunion plant. The Board noted that diversion of the
press from Standish could reasonably result in diversion of
new work from Standish and therefore violated Section 8(a)(3)
even though there was no immediate impact on the unit
employees.
30
Similarly, in Cold Heading Co., the employer
unlawfully relocated equipment to a newly-purchased nonunion
facility and changed its plans to install new equipment in its
27
See 355 NLRB No. 197, slip op. at 5, fn. 8 (2010).
28
Ibid.
29
See Adair Standish Corp., 290 NLRB 317, 318-19 (1988), enfd
in pertinent part 912 F.2d 854 (6
th
Cir. 1990).
30
See id. at 319.
NLRB-FOIA-00005437
Case 19-CA-32431
- 19 -
union facility after its employees independent union
representative sought to affiliate with the UAW.
31
Here, as in Adair Standish and Cold Heading, there is a
diversion of unit work that the unit employees otherwise would
have performed. And as in Pittsburg & Midway Coal Mining Co.,
the fact that unit employees may not yet have experienced the
financial impact of Boeings decision is no defense to a
Section 8(a)(3) violation.
Further, Boeing made this decision for unlawful reasons.
Boeing admits that the overriding factor in its decision to
place the second line in a nonunion facility was the
employees strike history. An employers discouragement of
its employees participation in a legitimate strike
constitutes discouragement of union membership within the
meaning of Section 8(a)(3).
32
This applies to employer
conduct designed to retaliate against employees for having
engaged in a strike in the past,
33
as well as employer conduct
designed to forestall employees from exercising their right to
strike in the future.
34
Indeed, the Board recently reaffirmed
that an employer violates the Act when it acts to prevent
future protected activity.
35
Comparing such conduct to the
31
See 332 NLRB 956, fn. 5, 975-76 (2000). See also
Associated Constructors, 325 NLRB 998, 998-1000 (1998), enfd.
sub nom. ODovero v. NLRB, 193 F.3d 532 (D.C. Cir. 1999)
(double-breasted employer unlawfully diverted work from its
union entity to its nonunion entity in retaliation for the
unions efforts to organize the nonunion entity and to escape
the collective-bargaining agreement).
32
Capehorn Industry, 336 NLRB 364, 365 (2001).
33
See id. at 365-67 (employer violated Section 8(a)(3) by
failing to immediately reinstate strikers upon unconditional
offer to return to work where there was no legitimate business
justification for entering into a permanent subcontract).
34
See Century Air Freight, 284 NLRB 730, 732 (1987) (employer
violated Section 8(a)(3) by permanently subcontracting unit
work and discharging unit employees in order to forestall the
exercise of their right to strike); Westpac Electric, 321 NLRB
1322, 1374 (1996) (employer violated Section 8(a)(3) by
isolating employee in retaliation for his previous striking
activities and also in anticipation that he would participate
in a strike in the future).
35
See Parexel International, LLC, 356 NLRB No. 82, slip op.
at 4 and cases cited therein (2011) (employer violated Section
NLRB-FOIA-00005438
Case 19-CA-32431
- 20 -
erection of a dam at the source of supply of potential,
protected activity, the Board reasoned that, the suppression
of future protected activity is exactly what lies at the heart
of most unlawful retaliation against past protected
activity.
36
Boeing concedes that it is removing work from the unit
employees based upon their past exercise of their right to
strike. However, Boeing relies upon the Supreme Courts
decision in NLRB v. Brown Food Store
37
to argue that it is
privileged to move work outside the unit to avoid the
disruptive consequences of future strikes and that this is a
sufficient business justification to permit its actions.
In Brown Food Store, the Court held that an employer was
privileged to lock out its employees and use temporary
replacements to carry on its business in the face of a whipsaw
strike.
38
Specifically, the Court found that the use of a
lockout and the hiring of temporary replacements to bring
pressure to bear in support of its bargaining position after
an impasse in negotiations was not an unfair labor practice.
39
Rather than finding the use of this economic weapon
discriminatory, the Court concluded that it was a legitimate
defensive measure to preserve the multiemployer group in the
face of a whipsaw strike.
40
Boeings attempt to extend the holding of Brown to
legitimatize any action that an employer takes to protect
itself against future, wholly speculative, strikes would
vitiate the Section 13 right to strike. And the Board has
made it clear that an employer cannot rely upon Brown to
justify discriminatory conduct based upon the exercise of the
right to strike. Thus, in National Fabricators, the Board
expressly rejected the employers attempt to use Brown and
other lockout cases to justify its decision to lay off those
employees who were likely to honor a union picket line in the
8(a)(1) by discharging an employee to prevent her from
discussing wages with other employees).
36
Ibid. (citation omitted).
37
380 U.S. 278 (1965).
38
See id. at 283-85.
39
See id. at 284.
40
See ibid.
NLRB-FOIA-00005439
Case 19-CA-32431
- 21 -
future.
41
Instead, the Board found that disfavoring employees
who were likely to engage in protected union activities was
proscribed by Section 8(a)(3) and the employers business
justification - to avoid investing money in employees who
were going to cease work later -- was neither legitimate nor
substantial.
42
Boeings concession that choosing South Carolina will
result in duplication and economic inefficiencies further
demonstrates that Boeings actions were retaliatory and not a
legitimate business decision. In addition, Commercial
Airplanes CEO Albaugh conceded that going to South Carolina,
a green field site, involves significant risks. Boeing has
the capacity, equipment, and trained workforce to handle the
second assembly line in the Puget Sound area. The substantial
investment required to build and equip the South Carolina
facility therefore will be duplicative. In addition, Boeing
will have to recruit and train a new workforce in South
Carolina, while ultimately laying off experienced employees in
Washington. Exaggerating the disruptive effects of prior
strikes, Boeing maintains that the inefficiencies associated
with moving work to South Carolina will be counterbalanced by
the avoidance of strike disruptions in the future. However,
there are other nonretaliatory and less costly means of
dealing with the potential of relatively short disruptions
caused by employee strikes, such as concluding negotiations
with the Union for a long-term no-strike agreement. In
addition, Boeings claim that it took this action to avoid
strike disruptions is belied by Boeings rejection of the
Unions efforts to negotiate a long-term no strike agreement.
Accordingly, the Region should proceed on the theory that
Boeing violated Section 8(a)(3) by retaliating against the
unit employees for engaging in the protected activity of
striking.
We also conclude that Boeings conduct was inherently
destructive of employee interests.
43
Conduct is inherently
destructive when it carries with it unavoidable
consequences which the employer not only foresaw but which he
must have intended and thus bears its own indicia of
41
See 295 NLRB 1095, 1095 (1989), enfd. 903 F.2d 396 (5
th
Cir.
1990), cert. denied 498 U.S. 1024 (1991).
42
See 295 NLRB at 1095-96.
43
See NLRB v. Great Dane Trailers, Inc., 388 U.S. 26, 33
(1967) (citation omitted).
NLRB-FOIA-00005440
Case 19-CA-32431
- 22 -
intent.
44
In International Paper Co., the Board set forth
four fundamental guiding principles for determining whether
employer conduct is inherently destructive of employee
rights.
45
First, the Board looks to the severity of the harm
to employees Section 7 rights. Second, the Board considers
the temporal impact of the employers conduct, i.e. whether
the conduct merely influences the outcome of a particular
dispute or whether it has far reaching effects which would
hinder future bargaining. Third, the Board distinguishes
between conduct intended to support an employers bargaining
position as opposed to conduct demonstrating hostility to the
process of collective bargaining. And finally, the Board
assesses whether the employees conduct discourages collective
bargaining by making it seem a futile exercise in the eyes of
the employees.
46
Even if the employees conduct is
inherently destructive, the Board weighs the employers
asserted business justification against the invasion of
employee rights.
47
Boeings actions were inherently destructive of employee
rights under the four principles articulated in International
Paper. First, the harm to employees Section 7 rights was
severe; employees got the distinct message that if they engage
in another strike, unit work will be moved to a nonunion
facility and unit jobs will be lost. Second, Boeings
decision was designed to have far-reaching effects and not
just to influence the outcome of a particular dispute, namely,
to take away employee support for the Unions most effective
economic weapon, and for the Union itself, and thereby hinder
any future collective bargaining. Third, Boeings conduct
demonstrated hostility to the very process of collective
bargaining and not just to support a specific bargaining
position. Finally, bargaining was made to seem a futile
44
Ibid., quoting NLRB v. Erie Resistor Corp., 373 U.S. 221,
228, 231 (1963). See also Dorsey Trailers, Inc., 327 NLRB
835, 863-64 (1999), enf. denied in pertinent part 233 F.3d 831
(4
th
Cir. 2000).
45
See 319 LRB 1253, 1269 (1995), enf. denied 115 F.3d 1045
(D.C. Cir. 1997).
46
Id. at 1269-70 (citations omitted).
47
Id. at 1273 (finding no justification for employers
inherently destructive conduct of permanently subcontracting
bargaining unit work during a lawful lockout). See also
Dorsey Trailers, 327 NLRB at 863-64 (employers closing of
facility during strike and relocation of unit work to newly
purchased facility outside the unions jurisdiction was
inherently destructive of employee rights).
NLRB-FOIA-00005441
Case 19-CA-32431
- 23 -
exercise without the possibility of a strike to support the
Unions position at the bargaining table.
The unavoidable consequence of Boeings decision to place
the second line in its newly-purchased, nonunion facility,
accompanied by official comments on the intranet and in the
media, was to severely chill its employees exercise of
Section 7 rights in the future - whether it be the Puget
Sound employees, the South Carolina employees, or Boeing
employees elsewhere. Employees will correctly fear that
engaging in such protected activity could cause them to lose
their jobs to nonunionized workers. Others may be encouraged
to file or support decertification petitions. And the many
unrepresented Boeing employees will be discouraged from
organizing or voting in support of union representation if
they believe that exercising their right to concerted activity
justifies moving commercial production elsewhere.
Moreover, even if the effect on employee rights was only
comparatively slight, Boeing had no legitimate business
justification. Its only justification was its desire to insure
against its employees exercise of their Section 7 rights, and
that is not a legitimate justification.
The Board recently held in Arc Bridges, Inc. that an
employers conduct was inherently destructive where its stated
reason for withholding a regularly-scheduled wage increase
from represented employees was that it was in negotiations
with the union.
48
The Board found that the employers stated
reason - that it wanted to enhance its bargaining position
with the union -- was an admission that it withheld the
increase because employees chose union representation.
49
Likewise, Boeings stated reason for its decision - that it
wanted to avoid strike disruptions - was an admission that it
decided to locate the second line in South Carolina because
the Puget Sound employees chose union representation and the
South Carolina employees did not. Accordingly, Boeings
decision coupled with its public pronouncements emphasizing
the motivation for its decision was inherently destructive of
its employees rights to engage in union activity and violated
Section 8(a)(3).
III. The Union Waived its Right to Bargain
The Unions allegation that Boeing failed to bargain in
good faith over its decision as to where to locate the second
787 line raises two preliminary issues: (1) whether Boeings
decision was a mandatory subject of bargaining; and (2) if so,
48
See 355 NLRB No. 199, slip op. at 3-4 (2010).
49
See id., slip op. at 3.
NLRB-FOIA-00005442
Case 19-CA-32431
- 24 -
whether the Union waived its right to bargain over that
subject. Although we conclude that the decision was a
mandatory subject of bargaining and there is substantial
evidence that Boeing did not bargain in good faith to a valid
impasse, the Region should dismiss the Section 8(a)(5)
allegations on the ground that the Union waived it right to
bargain, applying Provena.
50
A. Mandatory Subject of Bargaining
Under Dubuque Packing Co., a decision to relocate unit
work that is not accompanied by a basic change in the
employers operation is a mandatory subject of bargaining
unless the employer can establish that: the work performed at
the new location varies significantly from the work performed
at the prior location; the work performed at the former
location is discontinued entirely and not moved to the new
location; or the employers decision involved a change in the
enterprises scope and direction.
51
Alternatively, the
employer can defend by showing that: labor costs were not a
factor in the decision; or if labor costs were a factor, the
union could not have offered sufficient concessions to change
the employers decision.
52
Applying the Dubuque test, the
Board repeatedly has found relocation decisions to constitute
a mandatory subject of bargaining.
53
In addition, the Board has held that a decision may be a
mandatory subject even though there is no immediate loss of
unit jobs.
54
For example, in Quickway Transportation, Inc.,
50
Provena St. Joseph Medical Center, 350 NLRB 808 (2007).
51
303 NLRB 386, 391 (1991), enfd. sub nom. Food & Commercial
Workers Local 150-A v. NLRB, 1 F.3d 24 (D.C. Cir. 1993).
52
Ibid.
53
See, e.g., Titan Tire Corp., 333 NLRB 1156, 1164-65 (2001)
(decision to permanently relocate equipment and jobs in
reaction to strike); Owens-Brockway Plastic Products, 311 NLRB
519, 521-23 (1993) (decision to close plant and transfer work
to other facilities).
54
See, e.g., Overnite Transportation Co., 330 NLRB 1275, 1276
(2000), revd. mem. 248 F.3d 1131 (3d Cir. 2000) (We think it
plain that the bargaining unit is adversely affected whenever
bargaining unit work is given away to nonunion employees,
regardless of whether the work would otherwise have been
performed by employees already in the unit or by new
employees).
NLRB-FOIA-00005443
Case 19-CA-32431
- 25 -
the Board found that the employers decision to contract with
independent owner-operators rather than expand the unit, as it
had originally planned, was mandatory because that decision
obviously constrained the work opportunities available to the
bargaining unit.
55
Likewise, in Spurlino Materials, LLC, the
Administrative Law Judge, in a decision adopted by the Board,
found that even though no unit employees suffered a loss of
work as a result of the employers subcontracting, existing
employees might have otherwise been given overtime or the
employer might have hired additional unit employees, resulting
in benefits for the Union and current unit employees in having
an expanded unit.
56
And in Dorsey Trailers, Inc., the Board
found that subcontracting work to reduce a backlog in orders
was a mandatory subject because the potential loss of
overtime or reasonably anticipated work opportunities poses a
detriment to unit employees even if no employees lost their
jobs.
57
Here, the decision to locate the second 787 assembly line
in South Carolina amounted to a relocation of unit work. Even
though no unit employees have yet to lose work, as in Dorsey
Trailers the assignment of unit work to nonunit employees in
order to reduce an order backlog presents a potential loss of
overtime or reasonably anticipated work opportunities and
therefore poses a detriment to unit employees.
58
The work
that will be performed in South Carolina is identical to that
performed on the first line and the surge line in Everett by
unit employees. The decision did not involve a basic change
in Boeings operation or any change in the enterprises scope
or direction; Boeing does not intend to change its production
methods or its products.
59
Boeing did not demonstrate that
labor costs were not a factor in the decision. In fact,
according to Boeings CEO, the decision was motivated
primarily by a desire to avoid strikes and secondarily because
the Employer cannot afford the rate at which unit wages are
escalating. Boeing also did not demonstrate that the Union
could not have offered sufficient concessions to change its
55
See 355 NLRB No. 140 (2010), incorporating by reference the
rationale of 354 NLRB No. 80, slip op. at 2 (2009).
56
See 355 NLRB No. 77 (2010), incorporating by reference the
rational of 353 NLRB 1198, 1219 (2009).
57
See 321 NLRB 616, 617 (1996), enf. denied in relevant part
134 F.3d 125 (3d Cir. 1998). Accord Acme Die Casting, 315
NLRB 202, fn. 1, 209 (1994).
58
See 321 NLRB at 617.
59
See Owens-Brockway Plastic Products, 311 NLRB at 522.
NLRB-FOIA-00005444
Case 19-CA-32431
- 26 -
decision; the Union was willing to make concessions on both
the strike and wage issues during negotiations in the fall of
2009. Accordingly, we conclude that Boeings decision as to
where to locate the second 787 line was a mandatory subject of
bargaining.
B. Waiver of the Right to Bargain
The Board applies a clear and unmistakable waiver
standard to determine whether a union has waived its right to
bargain about a mandatory subject of bargaining during the
term of a collective-bargaining agreement.
60
The Board will
find a waiver if the contract either expressly or by
necessary implication confers on management a right to
unilaterally take the action in question.
61
In interpreting
the parties agreement, the relevant factors include: (1) the
wording of pertinent contractual provisions; (2) the parties
bargaining history; and (3) the parties past practice.
62
The Board has found a waiver based on contract language
where there is an express reference to the specific type of
decision that the employer has implemented unilaterally.
63
Thus, in Ingham Regional Medical Center, the Board adopted an
Administrative Law Judges decision that the union waived its
right to bargain about a subcontracting decision where the
contractual management-rights clause expressly reserved to
management the right to use outside assistance or engage
independent contractors to perform any of the Employers
operations or phases thereof (subcontracting)[.]
64
This
right was vested exclusively in the Employer and was not
60
See Provena St. Joseph Medical Center, 350 NLRB at 810-11.
61
See id. at 812, fn. 19.
62
See Johnson-Bateman Co., 295 NLRB 180, 184-89 (1989) (no
waiver of right to bargain about drug/alcohol testing
requirement where the management rights clause was generally
worded, issue was not fully discussed and consciously
explored during negotiations, and past practice of union
acquiescence to other unilateral work rule changes did not
waive the right to bargain about such changes for all time).
63
See, e.g., Ingham Regional Medical Center, 342 NLRB 1259,
1261-62 (2004) (under the management-rights clause, the
employer expressly reserved the right to subcontract); Allison
Corp., 330 NLRB 1363, 1364-65 (2000) (management-rights clause
specifically, precisely, and plainly granted the employer
the exclusive right ... to subcontract).
64
See 342 NLRB at 1260, 1261-62.
NLRB-FOIA-00005445
Case 19-CA-32431
- 27 -
subject to arbitration.
65
Although another contractual
provision required the employer to provide 60 days notice and
discuss with the union any subcontracting decision that
would cause unit employees to be laid off, the words discuss
and bargain were found not synonymous in the parties
contract.
66
In this case, Section 21.7 of the parties agreement
specifically, precisely, and plainly
67
granted Boeing the
right to offload work to a facility not covered by the
agreement. As in Ingham Regional Medical Center, the other
provisions of Section 21.7 that required Boeing to provide the
Union notice and an opportunity to review and recommend
alternatives did not require the Employer to bargain over an
offloading decision.
The Union does not dispute that Section 21.7 contains a
waiver but asserts instead that the Employer may not take
advantage of the waiver. Specifically, the Union maintains
that a contractual waiver cannot be applied to a decision that
is unlawfully motivated. But there is no authority for the
proposition that an unlawful motive negates a contractual
waiver; rather, the cases on which the Region and Union rely
hold that a contractual waiver is no defense to a Section
8(a)(3) violation.
68
The Unions other arguments against application of the
waiver are also unavailing. Thus, the Union asserts that the
contractual waiver does not apply because the parties entered
negotiations for a new contract. However, during those mid-
term negotiations, their existing contract -- including
Section 21.7 -- continued in effect. The Union also contends
65
Id. at 1260.
66
Id. at 1262.
67
See Allison Corp., 330 NLRB at 1365.
68
See Reno Hilton, 326 NLRB 1421, 1430 (1998), enfd. 196 F.3d
1275 (D.C. Cir. 1999) (merely because the Respondent has
negotiated the unfettered right in a collective-bargaining
agreement to contract out work at any time, such right ...
does not unfetter and insulate the Respondent from the
sanctions of the Act prohibiting it from discriminating); RGC
(USA) Mineral Sands, Inc. v. NLRB, 281 F.3d 442, 450 (4
th
Cir.
2002) (enforcing Board decision finding Section 8(a)(3)
violation on grounds that, even if contract authorized
employer to unilaterally alter shift assignments, an employer
cannot exercise contractual rights to punish employees for
protected activity).
NLRB-FOIA-00005446
Case 19-CA-32431
- 28 -
that the waiver cannot extend to work transferred after the
contracts expiration in September 2012, but Boeing made its
final decision in 2009 and expects to open the second line in
South Carolina in mid 2011.
69
The Unions estoppel argument
also lacks merit. While Boeing took the position that the
notice and review provisions in Article 21.7 did not apply
because no employees will be laid off, Boeing is not thereby
estopped from asserting the waiver provision.
Moreover, Boeings request to negotiate mid-term changes
to the parties agreement did not subject it to the
traditional Section 8(a)(5) bargaining obligations.
70
Absent
a contractual reopener provision, parties are under no
obligation to bargain over proposals for mid-term
modifications.
71
For this reason, we do not reach the
question of whether Boeing engaged in surface bargaining in
the fall of 2009, bargained to a valid impasse, or unlawfully
failed to provide information relevant to those negotiations.
IV. The Appropriate Remedy
We conclude that special remedies must be fashioned in
the unusual circumstances of this case.
First, with respect to the Section 8(a)(1) violations,
which had a particularly chilling impact upon employees, the
Region should seek a notice reading by a high-level Boeing
official, to insure that employees learn about their statutory
69
Thus, if there is a duty to bargain over a relocation
decision, it arises when the decision is announced and not
when it is ultimately implemented. See, e.g., Bell Atlantic
Corp., 336 NLRB 1076, 1086-89 (2001) (union waived right to
bargain over employers decision to close facility and
transfer work to nonunion facility where it received notice of
decision in August and did not request bargaining until
December, even though no unit work would be relocated before
the following April).
70
See St. Barnabas Medical Center, 341 NLRB 1325, 1325 (2004)
(union did not incur traditional bargaining obligations by
requesting that employer meet to discuss feasibility of wage
reopener, and employer violated Section 8(a)(5) by
unilaterally implementing wage increases after an impasse in
those negotiations).
71
See Boeing Co., 337 NLRB 758, 763 (2002) (employer did not
incur bargaining obligation by agreeing to unions request to
consider midterm modification); Connecticut Power Co., 271
NLRB 766, 766-67 (Section 8(d) does not require an employer
who suggests a midterm contract change to negotiate about it).
NLRB-FOIA-00005447
Case 19-CA-32431
- 29 -
rights and gain assurance that Boeing will respect those
rights.
72
The notice reading is particularly effective if
read by an official who personally committed some of the
violations, or read by a Board agent in his presence, in order
to dispel the atmosphere of intimidation he created.
73
Finally, to remedy the Section 8(a)(3) violation, the
Region should seek an order requiring Boeing to maintain the
second line in Washington. At the time of the discriminatory
conduct, Boeing intended to use the second line to assemble
three 787 aircraft each month, while assembling seven 787
aircraft each month on the first line in Everett. At present,
even the first line is not producing up to capacity because of
problems with suppliers and FAA certification. Thus, the
Region should seek an order requiring that, as Boeing
production increases, the first ten aircraft assembled each
72
See, e.g., Homer D. Bronson Co., 349 NLRB 512, 515 (2007),
enfd. 273 F. Appx 32 (2d Cir. 2008) (notice reading is an
effective but moderate way to let in a warming wind of
information, and more important, reassurance); Federated
Logistics & Operations, 340 NLRB 255, 258 (2003), affd. 400
F.3d 920 (D.C. Cir. 2005) (employees will perceive that the
Respondent and its managers are bound by the requirements of
the Act).
73
Three Sisters Sportswear Co., 312 NLRB 853, 853 (1993),
enfd. mem. 55 F3d 684 (D.C. Cir. 1995), cert. denied 516 U.S.
1093 (1996). See also, e.g., Homer D. Bronson Co., 349 NLRB
at 515 (reading by president of manufacturing, who personally
delivered speeches threatening plant closure or relocation);
Texas Super Foods, 303 NLRB 209, 209 (1991) notice reading by
owner and president who signed unlawful letters to unit
employees, drafted unlawful speech threatening job losses, and
personally gave the speech to at least two groups of
employees).
NLRB-FOIA-00005448
Case 19-CA-32431
- 30 -
month be assembled by the Puget Sound unit employees and that
the supply lines for these aircraft be maintained in the Puget
Sound and Portland facilities.
74
B.J.K.
ROFs - 9
H:ADV.19-CA-32431.Response2.Boeing.dlw
74
At this time, we do not reach a decision on the Unions
request for preliminary injunctive relief. The Region should
reassess whether Section 10(j) relief is warranted after the
case is tried before the Administrative Law Judge. In the
meantime, the Region should put evidence in the record
regarding the chilling impact of Boeings violative statements
and conduct to support the notice-reading remedy. This will
facilitate use of the administrative record to demonstrate in
a subsequent Section 10(j) proceeding that preliminary
injunctive relief is just and proper.
NLRB-FOIA-00005449
1
Microsoft Outlook
Sent: Tuesday, April 19, 2011 11:04 AM
Subject: Re: The Boeing Company, 19-CA-32431
Interesting. Do we have an affidavit from the Senator?
On Apr 19, 2011, at 7:52 AM, "Ahearn, Richard L." <Richard.Ahearn@nlrb.gov> wrote:
Mara, Memo.
R
<ADV.19-CA-32431.Boeing Response 2 Boeing dlw.doc>
NLRB-FOIA-00005450
1
Microsoft Outlook
Sent: Wednesday, May 11, 2011 4:04 PM
Subject: RE: FYI Reid Press Release
I am not available at 2.
To: 'David Campbell'
Cc: Anzalone, Mara-Louise; 'Peter Finch'
I understand Peter was going to speak with you at 2; do you need me and Mara also?
R
From: David Campbell [mailto:campbell@workerlaw.com]
Are you and your folks available to talk in the next hour or so?
Thanks, Dave
Sincerely, David Campbell
campbell@workerlaw.com
Schwerin Campbell Barnard Iglitzin & Lavitt
18 W Mercer Suite 400
Seattle, Washington 98119-3971
Phone (206)285-2828: FAX (206)378-4132
This communication is protected by the attorney client and attorney work-product privileges. Please do not copy, forward
or append.
From: Ahearn, Richard L. [mailto:Richard.Ahearn@nlrb.gov]
To: David Campbell
Cant open.
Subject: FYI Reid Press Release
Thanks, Dave
NLRB-FOIA-00005451
2
Phone (206)285-2828: FAX (206)378-4132
This communication is protected by the attorney client and attorney work-product privileges. Please do not copy, forward
or append.
NLRB-FOIA-00005452
1
Microsoft Outlook
Subject: Re: FYI Reid Press Release
I'm on my cell ) if you need anything --
M-L.A.
R
Thanks, Dave
Phone (206)285-2828: FAX (206)378-4132
This communication is protected by the attorney client and attorney work-product privileges. Please do
not copy, forward or append.
To: David Campbell
Cant open.
Thanks, Dave
E.6 Privacy E.6 Privacy
NLRB-FOIA-00005453
2
Phone (206)285-2828: FAX (206)378-4132
NLRB-FOIA-00005454
1
Microsoft Outlook
No worries.
Subject: Re: FYI Reid Press Release
I'm on my cell if you need anything --
M-L.A.
R
Thanks, Dave
Phone (206)285-2828: FAX (206)378-4132
To: David Campbell
Cant open.
E.6 Privacy E.6 Privacy
NLRB-FOIA-00005455
2
Thanks, Dave
Phone (206)285-2828: FAX (206)378-4132
NLRB-FOIA-00005456
1
Microsoft Outlook
Thx.
R
Anne P. Pomerantz
NLRB-FOIA-00005457
1
Microsoft Outlook
Subject: RE: Edits to Ellen's version using track changes
No worriessafe travel.
R
Thx.
R
Anne P. Pomerantz
NLRB-FOIA-00005458
1
Microsoft Outlook
To: Pomerantz, Anne; Anzalone, Mara-Louise; Finch, Peter G.; Harvey, Rachel
Subject: FYI
GOP Lawmakers Move From NLRB Criticism
To Document Demands and Legislative Action
A National Labor Relations Board administrative law judge will not hear Acting General Counsel Lafe E.
Solomon's unfair labor practice complaint against Boeing Co. until June 14, but Republican lawmakers in
Washington, D.C., and in...
Not responsive
NLRB-FOIA-00005459
1
Microsoft Outlook
To: Cleeland, Nancy
I think the fact sheet looks very good.
of the day.
Nancy Cleeland
(202) 273-0222
NLRB-FOIA-00005460
1
Microsoft Outlook
Subject: FW: Harkin Responds to GOP Attacks on Nonpartisan National Labor Relations Board
Nancy Cleeland
(202) 273-0222
From: Harkin Press Office [mailto:tom_harkin@harkin.enews.senate.gov]
To: Cleeland, Nancy
Subject: Harkin Responds to GOP Attacks on Nonpartisan National Labor Relations Board
Add us to your Address Book! Add tom_harkin@harkin.enews.senate.gov to your address book now to ensure
your newsletter always get delivered.
May 10, 2011 Unsubscribe Update My Profile
FOR IMMEDIATE RELEASE Contact: Justine Sessions / Kate Cyrul
May 10, 2011 (202) 224-3254
Harkin Responds to GOP Attacks on Nonpartisan National Labor Relations Board
WASHINGTON Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Tom Harkin (D-IA) today
released the following statement responding to the comments made by Republican politicians at a press conference today
on the National Labor Relations Board investigation of the Boeing Company. On Thursday, Harkin will convene a HELP
Committee hearing to discuss why the middle class is increasingly slipping out of reach for Americans, at which the
General Counsel for Boeing will testify.
What we are really witnessing here is another example of the Republican assault on the middle class that has been
echoing across the country for months now. Instead of focusing on how we can get Americans working again and get the
middle class back on its feet, Republicans have chosen to spend their time attacking the handling of a routine unfair labor
practice charge. This overly dramatic response and the disturbing misinformation they are peddling has needlessly
NLRB-FOIA-00005461
2
complicated the legal process and distorted the public discussion of this case.
These opponents of workers rights have also mischaracterized the fundamental issue at stake, suggesting that this case
represents an assault on right to work laws. Thats just factually incorrect there is absolutely no way that the outcome
of this case could affect in any way the laws of any state.
This fight is about far more than just one group of workers in Washington State. Unions are one of the few voices left in
our society speaking up for the little guy, and if we let powerful CEOs trample all over these rights without consequences,
we might as well give up on having a middle class altogether.
Thats what this all comes down to: powerful corporate interests are pressuring public officials to interfere with an
independent agency, rather than let justice run its course. And we should not tolerate this interference. Instead, we should
turn our attention back to the issues that really matter to American families how we can create jobs in Washington, South
Carolina, Iowa, and across the country
###
HELP Committee Website | News | Hearings | About Chairman Harkin
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NLRB-FOIA-00005462
1
Microsoft Outlook
To: Solomon, Lafe E.; Liebman, Wilma B.; Wagner, Anthony R.
Subject: see this letter to editor in the wall street journal?
Boeing is Wrong, the NLRB Is Right
The recent complaint filed by the National Labor Relations Board's general counsel against Boeing's efforts to
relocate its production facility from Washington state to South Carolina has unleashed a flurry of anger among
big business interests ("The White House vs. Boeing: A Tennessee Tale" by Sen. Lamar Alexander, op-ed,
April 26).
This outrage should instead be redirected at Boeing for explicitly and egregiously breaking the law. It is illegal
to retaliate against employees exercising their rights to form a union or strike, and that is exactly what the
company did. The complaint issued was based on public comments from Boeing executives making clear their
reasons for relocation: to avoid strikes by their employees.
The general counsel, in exercising his sworn duty to uphold the National Labor Relations Act, had no choice but
to issue a complaint against the company's violation. To not have done so would send the wrong signal to both
American employers and workersthat it's OK to flagrantly break our labor laws.
Dorian Warren
Assistant Professor of Political Science
and Public Affairs
Columbia University
New York
Nancy Cleeland
(202) 273-0222
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Microsoft Outlook
April 26).
Dorian Warren
and Public Affairs
Columbia University
New York
Nancy Cleeland
(202) 273-0222
Non-Responsive
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Nice!
Nancy Cleeland
(202) 273-0222
POLITICAL PRESSURE
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Microsoft Outlook
To: Liebman, Wilma B.; Solomon, Lafe E.; Cleeland, Nancy; Schiff, Robert; Colwell, John F.; Garza, Jose
Subject: Social media trends
It was an interesting day for the Boeing story. The majority of the traffic involved Reids statement, with Boeing CEO
McNerneys Wall Street Journal opinion piece coming in second. Its very clear that the response from the Democrats is
that it is wrong to attack the NLRB for doing its job, regardless of the merits of the case, while Boeing and its supporters
continue to discuss the specifics of the case with no new lines of argument.
A Gannet piece on Reid and Clyburns statements was passed around quite a bit:
http://www.wltx.com/news/article/136263/2/Top-Dem-scolds-GOP-on-NLRB-Stance-
McNerneys opinion piece: http://nation.foxnews.com/politics/2011/05/11/palin-removing-boot-throat-american-
businesses
Lafes statement from Monday continues to have an impact on coverage. Most articles and posts now contain
reference to it, for instance this Wall Street Journal blog entry by Melanie Trottman, which leads Having failed to
get the National Labor Relations Board to drop its complaint against Boeing, a group of congressional
Republicans and business leaders have begun pressuring President Barack Obama to get involved. And
includes, On Monday, Mr. Solomon said the complaint involves matters of fact and law. He said the June 14
hearing before an NLRB administrative law judge in Seattle will be the appropriate time and place to argue the
merits. http://blogs.wsj.com/washwire/2011/05/10/business-gop-leaders-turn-to-obama-in-boeing-
dispute/?mod=google_news_blog
And finally, Sarah Palin thinks we should Remove our boots from the throats of American business :
http://nation.foxnews.com/politics/2011/05/11/palin-removing-boot-throat-american-businesses
Tony Wagner
New Media Specialist | Office of Public Affairs
National Labor Relations Board (NLRB)
1099 14th Street NW, Suite 11550 | Washington, DC 20570
anthony.wagner@nlrb.gov | 202-273-0187 | cell: 202-375-9791
nlrb.gov | m.nlrb.gov | facebook.com/NLRBpage | @nlrb
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Sent: Friday, May 13, 2011 2:34 PM
To: Solomon, Lafe E.; Liebman, Wilma B.
Subject: FW: TUESDAY: Insider briefing on NLRB & how to push back on attacks
fyi
Nancy Cleeland
(202) 273-0222
From: American Rights at Work [mailto:action@americanrightsatwork.org]
To: Cleeland, Nancy
Subject: TUESDAY: Insider briefing on NLRB & how to push back on attacks
For 75 years, the National Labor Relations Board (NLRB), an independent federal agency charged with
ensuring that unions and employers play by the rules, has investigated claims of unfair retaliation in the
workplace. The agency has been coming under increased attack and scrutiny by corporations and
politicians that do not want the agency to do its job of protecting workers rights.
Most recently, the NLRB's statutorily authorized decision to issue a complaint against Boeing for a
potential violation of workers exercising their rights has caused right-wing hyperventilation, political
theater, and numerous mistruths.
Please join us for an informal phone briefing to learn about the NLRB, the true facts of the
Boeing case, and what labor and progressive allies can do to push back.
What: Phone briefing for labor & progressive ally communicators on NLRB
When: Tuesday, May 17 11:30am EST
Who: AFL-CIO, American Rights at Work, IAM
RSVP: Email lcattaneo@americanrightsatwork.org to receive dial-in information.
We hope you can join us! In the meantime, we hope you find our core talking points below useful:
The recent complaint issued by the National Labor Relations Boardalleging that Boeing unlawfully
retaliated against its employees when it decided to move production away from its Washington state
facilityhas generated coordinated and focused attacks from Republicans and corporate interests.
CORE POINTS:
No company is above the law. Working people play by the rules, and so should businesses. But
corporate lobbyists and Republicans in Congress are attacking the National Labor Relations Boarda
neutral, independent agencyfor asking Boeing to play by the rules. The fact is that retaliating against
workersas Boeings own statements indicate it may haveis against the law, and the agency had no
choice but to investigate. So lets be clear: The right-wing attacks on the NLRB have nothing to do with
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the facts of the case or the economy, and everything to do with politics.
OTHER POINTS:
This uproar is politically motivatedits about politics, not the economy. Remember, the
politicians and corporate lobbyists attacking this complaint are the same crowd who want to defund the
NLRB and dismantle any protections for workers. Whats more, the complaint is only the first step of a
legal process designed to determine whether the law has been violated, and Boeing will have its
chance to make its case in court. The right-wing outrage is just an excuse to play politics and further
the ongoing attack on an agency designed to protect workers.
Republicans in Congress are playing the same old political games Americans are tired of. They
were elected to fight for an economic recovery that creates jobs and works for all of us. Instead, they're
doing the work of corporate CEOs and lobbyists who are rigging the system to help themselves not
working families. It's time for Congress to do what they were elected to do: Address the real problems
facing the middle class and stand up for everyday Americans.
The NLRB is a neutral arbiter of workers issues and is just doing its job. The very mission of the
NLRB is to enforce the National Labor Relations Act of 1935, a law that governs private sector workers
right to unionize as well as relations between companies and employees. Thats not a partisan mission,
but one that has been endorsed by Presidents and Members of Congress on both sides of the aisle
since its inception. The General Counsel of the NLRB, Lafe Solomon, has served the Board for 29
years, working with both parties. His job as a professional investigator and prosecutor is to interpret
and enforce the law. The decision to bring the complaint was based on the facts in the case and
interpretation of decades of precedent under the NLRA.
On Boeing: Retaliating against workers for exercising their protected rights is against the law.
Boeing repeatedly told its employees and the media that it was moving production away from its
Washington state facility in response to workers there exercising their freedom to protect their voice
and union. The fact is, retaliating against workers for exercising their protected rights is against the law,
and Boeings own comments suggest that it may have done. This isnt about South Carolinaits illegal
everywhere.
This message was sent to nancy.cleeland@nlrb.gov. You can unsubscribe from American Rights at Work emails by going here.
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Microsoft Outlook
Subject: FW: Committee Republicans Demand NLRB Cease Job-Destroying Bureaucratic Activism
They wont stop!
Nancy Cleeland
(202) 273-0222
From: Education & the Workforce Press [mailto:educationlaborgoppress@mail.house.gov]
To: Cleeland, Nancy
Subject: Committee Republicans Demand NLRB Cease Job-Destroying Bureaucratic Activism
Congressman John Kline, Chairman
FOR IMMEDIATE RELEASE
May 13, 2011
CONTACT: Press Office
(202) 226-9440
Committee Republicans Demand NLRB Cease
Job-Destroying Bureaucratic Activism
WASHINGTON, D.C. --- Today, Republican Members of the House Education and the Workforce
Committee demanded the National Labor Relations Board (NLRB) end its job-destroying activist
agenda. In a letter to NLRB Acting General Counsel Lafe Solomon, members describe a number of
actions by the Obama labor board that call into question the objectivity and credibility of the office,
including the NLRBs most recent effort to force The Boeing Company to relocate a South Carolina
assembly line to Washington.
As the Republican members note, Taken together, your actions threaten future economic growth and
job creation and reflect an unsavory culture of union favoritism. We demand you cease your
bureaucratic activism immediately and restore the objectivity that is essential to the effectiveness and
credibility of the General Counsels office.
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Education and the Workforce Republican signees include:
Rep. Joe Wilson (R-SC)
Rep. Virginia Foxx (R-NC)
Rep. Duncan D. Hunter (R-CA)
Rep. Tim Walberg (R-MI)
Rep. Todd Rokita (R-IN)
Rep. Trey Gowdy (R-SC)
Rep. Kristi Noem (R-SD)
Rep. Martha Roby (R-AL)
Rep. Dennis Ross (R-FL)
Rep. Mike Kelly (R-PA)
To read the letter, click here.
###
FORWARD TO A FRIEND | SHARE ON FACEBOOK | SHARE ON TWITTER | PERMALINK
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Microsoft Outlook
To: Solomon, Lafe E.; Garza, Jose
Subject: FW: Kline and Roe Statements on NLRB's Failure to Adequately Respond to Congressional
Inquiry
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Subject: Kline and Roe Statements on NLRB's Failure to Adequately Respond to Congressional Inquiry
May 24, 2011
(202) 226-9440
Kline and Roe Express Disappointment with NLRB's
Inadequate Response to Congressional Inquiry
"The general counsel's office has offered to discuss our request further, and
we intend to take them up on their offer."
WASHINGTON, D.C. --- Today, Republican leaders on the U.S. House Committee on Education and
the Workforce responded to the National Labor Relations Board's (NLRB) failure to provide requested
documents related to its complaint against The Boeing Company. On May 5th, Chairman John Kline
(R-MN) and Representative Phil Roe, M.D. (R-TN) requested information from the NLRB to address
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questions surrounding the timing of the Boeing complaint, as well as concerns about public statements
made by NLRB officials.
"The NLRB is not immune from congressional oversight or public scrutiny," said Chairman Kline.
"While this insufficient response is not entirely unexpected from todays board, it is still extremely
disappointing. In the case of Boeing, there are legitimate questions over public statements made by
NLRB officials and the timing of its complaint. The American people deserve a full explanation and
Congress has a right to a complete response. The general counsel's office has offered to discuss our
request further, and we intend to take them up on their offer."
"The troubling allegations the NLRB has filed against Boeing warrant further investigation," said Rep.
Phil Roe, chairman of the Subcommittee on Health, Employment, Labor, and Pensions. "I am
disappointed the NLRB chose not to fully respond to important inquires made in the letter because the
American people deserve answers. While all the facts in this case are still in dispute, thousands of jobs
are at risk in South Carolina. The extreme remedy demanded by the NLRB will have a detrimental
effect on local economies and a chilling effect on the American workforce. I am very concerned about
NLRB's actions in this matter, and will be exploring these allegations further."
"Congress cannot stand by while the NLRB attempts to impose sweeping changes to labor laws that
govern the nation's workplaces," continued Chairman Kline. "For more than two years, the Obama
board has pursued an activist agenda that champions the interests of Big Labor over the interests of all
American workers. Republicans have pledged to make job creation a leading priority, and our
oversight of the NLRB will remain an important part of that effort."
To read the May 5th letter by Chairman Kline and Rep. Roe, click here.
To read the NLRB's response, click here.
###
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Microsoft Outlook
To: Solomon, Lafe E.; Garza, Jose; Wagner, Anthony R.
Subject: boeing talks about ramping up 787 production to 12 or more a month
http://www.thestreet.com/story/11131798/1/boeing-hints-at-787-production-boost.html?kval=dontmiss
Nancy Cleeland
(202) 273-0222
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Microsoft Outlook
Sure
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
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Microsoft Outlook
To: 'HOLLY ROSENKRANTZ, BLOOMBERG/ NEWSROOM:'
Hi - what's your address? I'm planning to be there at 11 today. Thanks
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
NLRB-FOIA-00005482
1
Microsoft Outlook
Hi - I'm planning to come by at 3 unless I hear from you otherwise.
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
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Microsoft Outlook
Sent: Wednesday, June 01, 2011 3:44 PM
Subject: FW: boeing information - an update on NPR stories
Hi can we discuss this NPR request? Im free anytime this afternoon.
Nancy Cleeland
(202) 273-0222
From: Kathy Lohr [mailto:KLohr@npr.org]
To: Cleeland, Nancy
Cc: Kathy Lohr
Subject: RE: boeing information - an update on NPR stories
Hi Nancy,
Wendy is covering the hearing and I am doing a piece out of South Carolina. Just want to make sure you are not
commenting as that is what I will have to say in the story. Just fyi Boeing did comment for my story.
I am in SC now and my cell is 404-771-8916.
Thanks,
Kathy Lohr
From: Cleeland, Nancy [mailto:Nancy.Cleeland@nlrb.gov]
Sent: Thursday, May 26, 2011 2:36 PM
To: Kathy Lohr
Subject: RE: boeing information
Hi Kathy, I just got a similar request for an interview with Lafe Solomon from Wendy Kaufman in Seattle. Are you guys
coordinating? The problem is he has said hes not going to talk publicly about the Boeing complaint any further until the
hearing happens. Ill ask him again, but hes turned down a number of requests.
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Cc: Kathy Lohr
Hi Nancy,
NLRB-FOIA-00005484
2
Is it possible to interview someone regarding the Boeing complaint on Friday? If they are in DC, could they go into NPR?
I can work with you to get a time if this is doable. If Friday wont work, how about Tuesday afternoon?
I am heading to Charleston on Tuesday morning.
Thanks,
Kathy
Kathy Lohr
NPR Correspondent
Office 770-640-3878
Cell 404-771-8916
To: Kathy Lohr
Subject: boeing information
Hi Kathy,
Our original press release: http://www.nlrb.gov/news/national-labor-relations-board-issues-complaint-against-boeing-
company-unlawfully-transferring-
Our fact sheet (with a link to the complaint): http://www.nlrb.gov/boeing-complaint-fact-sheet
A later release with a statement from the Acting General Counsel: http://www.nlrb.gov/news/acting-general-counsel-lafe-
solomon-releases-statement-boeing-complaint
We also posted a couple of Fact Checks in response to misinformation being widely reported:
Several blogs and news outlets continue to mischaracterize the complaint issued on April 20 by the NLRB Acting General
Counsel as a ruling of the Board. One outlet today described Board Member Craig Becker as having been a key player
in the decision to issue the complaint. That is untrue. In fact, the case has not yet come before the Board. As the NLRB
Fact Sheet explains, the General Counsel and the Board are separate and independent under the NLRA, with the General
Counsel functioning as prosecutor and the Board functioning as a court. The case is scheduled to be tried before an
administrative law judge, acting under the Boards authority. That decision could then be appealed to the Board itself for
its decision. (posted 5/6/11)
Several news outlets have erroneously reported in recent days that the National Labor Relations Board has ordered the
Boeing Company to close its operations in South Carolina. (Examples here and here). In fact, the complaint issued on
April 20 by the Acting General Counsel does not seek to have the South Carolina facility closed. It seeks to halt the
transfer of a specific piece of production work due to allegations that the transfer was unlawfully motivated. The complaint
explicitly states that Boeing may place work where it likes, including at its South Carolina facility, as long as the decision is
not made for discriminatory reasons.
In addition, the Board has not yet considered or ruled on the allegations in the complaint. Under the NLRBs statute, the
General Counsel and the Board are separate and independent, with the General Counsel functioning as prosecutor and
the Board functioning as a court. The case is scheduled to be tried before an administrative law judge, acting under the
Boards authority. That decision could then be appealed to the Board itself for its decision. (posted 4/26/11)
Theres plenty of information out there, but much of it is wrong. Media Matters posted a couple of pieces pointing out
errors. As I said on the phone, please contact me if you have any questions and Ill do everything I can to help.
Thanks for your interest,
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Nancy Cleeland
(202) 273-0222
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Microsoft Outlook
OK, thats right, I forgot. Good luck.
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Subject: Re: boeing information - an update on NPR stories
I'm on the Hill. I will call you tomorrow. I won't be at the office but I will be able to talk.
--------------------------
Sent: Wed Jun 01 15:44:29 2011
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Cc: Kathy Lohr
Hi Nancy,
Thanks,
Kathy Lohr
NLRB-FOIA-00005487
2
To: Kathy Lohr
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Cc: Kathy Lohr
Hi Nancy,
Thanks,
Kathy
Kathy Lohr
NPR Correspondent
Office 770-640-3878
Cell 404-771-8916
To: Kathy Lohr
Hi Kathy,
NLRB-FOIA-00005488
3
Nancy Cleeland
(202) 273-0222
NLRB-FOIA-00005489
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Microsoft Outlook
Subject: Re: South Carolina Boeing Employees Move to Intervene in Obama Labor Board's Assault on
Right to Work Laws
Sure thing
To: Cleeland, Nancy
Sent: Fri Jun 03 06:12:22 2011
Subject: RE: South Carolina Boeing Employees Move to Intervene in Obama Labor Board's Assault on Right to Work
Laws
Good morning Nancy,
When you see something relevant in the press, please forward a copy to me as well.
Thanks,
Jennifer
Laws
The latest
Laws
fyi
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Laws
NLRB-FOIA-00005490
2
Thanks
(703) 770-
3364
strictly voluntary.
case is pending.
NLRB-FOIA-00005491
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Microsoft Outlook
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Hi Jennifer,
Nancy Cleeland
(202) 273-0222
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Microsoft Outlook
Subject: RE: Boeing update
Thanks, Ill be there.
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy; Wagner, Anthony R.
Subject: Boeing update
At 2 pm today in my office, we are calling Rich to get an update, and among other things, we will be discussing posting
public documents in the case on the web. You are invited to join us. Thanks, Lafe
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Microsoft Outlook
From: Willen, Debra L
To: Kearney, Barry J.; Farrell, Ellen; Sophir, Jayme; Szapiro, Miriam
A nice antidote to todays story in the Daily Labor Report.
To: Farrell, Ellen; Sophir, Jayme; Szapiro, Miriam; Willen, Debra L
POLITICAL PRESSURE
POLITICAL PRESSURE
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Microsoft Outlook
To: Mattina, Celeste J.; Kearney, Barry J.; Farrell, Ellen; Garza, Jose
Subject: Fw: seattletimes.com: Boeing will build next 787's first horizontal tails in Seattle
--------------------------
----- Original Message -----
From:
Sent: Wed May 25 07:42:42 2011
----------------------------------------------------------------------
======================================================================
for information.
======================================================================
E.6 Privacy
E.6 Privacy
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Microsoft Outlook
From: Pye, Rosemary
Sent: Tuesday, June 07, 2011 3:07 PM
To: Farrell, Ellen
Subject: FW: ACS to Host Call-In Briefing on National Labor Relations Board's Complaint aginst
Boeing Co.
Dear Ellen,
I thought you might be interested in this discussion.
Rosemary
From: Reyes, Lucy E.
To: Pye, Rosemary
Subject: ACS to Host Call-In Briefing on National Labor Relations Board's Complaint aginst Boeing Co.
Rosemary,
A friend sent me this earlier today.
I thought youd be interested.
Lucy
ACS Hosts Call-In Briefing on National Labor Relations Boards Complaint against Boeing Co.
Experts to Explore Boeing Case Alleging Violations of Workers Rights
For Immediate release: Contact: Jeremy Leaming
June 7, 2011 202-393-6181
jleaming@acslaw.org
Washington, D.C. In a teleconference briefing hosted by the American Constitution Society for Law and Policy (ACS),
labor and constitutional law experts will explore the National Labor Relations Boards complaint lodged against Boeing
Company for allegedly retaliating against its workers in Washington State for exercising their right to strike. The NLRB
complaint, which charges Boeing with violating the National Labor Relations Act (NLRA), is scheduled to be heard before
an administrative law judge on June 14. The ACS teleconference briefing will examine the complaint, the right-wing
attacks against it, including calls from conservative lawmakers to defund the NLRB, and other questions surrounding the
matter. For example, is there anything unusual about the substance of the complaint, and what is the proper role of
Congress in relation to the actions of independent agencies such as the NLRB?
WHO:
Caroline Fredrickson, Executive Director of ACS (will provide introductory remarks).
James J. Brudney, Newton D. Baker-Baker & Hostetler Chair in Law, Ohio State University Michael E. Moritz
College of Law; Beginning in September 2011, Professor of Law, Fordham University School of Law.
Catherine Fisk, Chancellors Professor of Law, University of California, Irvine School of Law.
WHEN: Thursday, June 9, 2011, 12:00 p.m.
NLRB-FOIA-00005502
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CALL-IN NUMBERS: Call-In: (308) 344 - 6400 ID: 381130#
Please RSVP: at press@acslaw.org
The American Constitution Society for Law and Policy (ACS), founded in 2001 and one of the nation's leading progressive
legal organizations, is a rapidly growing network of lawyers, law students, scholars, judges, policymakers and other
concerned individuals. For more information about the organization or to locate one of the more than 200 lawyer and law
student chapters in 48 states, please visit www.acslaw.org.
If you would rather not receive future communications from American Constitution Society, let us know by clicking here.
American Constitution Society, 1333 H Street, NW 11th Floor, Washington, DC 20005 United States
NLRB-FOIA-00005503
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Microsoft Outlook
From: Martin, Andrew
Sent: Monday, April 11, 2011 10:24 AM
To: Abruzzo, Jennifer; Ahearn, Richard L.; Ananthanayagam, Shanti; Arlook, Martin M.; Baniszewski, Joseph; Barker,
Joseph; Becker, Craig; Blyer, Alvin P.; Bonett Jr., Edward J.; Boren, Dennis R.; Burton, Spence; Carlton, Peter J.; Chester,
Robert W.; Christman Jr., Thomas J.; Cleeland, Nancy; Colwell, John F.; Cowen, William B.; Dreeben, Linda J.; Eddins-
Hill, Rosalind Elaine; Englehart, Bob; Farrell, Ellen; Ferguson, John H.; Fies-Keller, Cara L.; Figueroa, Marta; Flynn,
Terence F.; Franklin, Kirk; Garza, Jose; Glasser, Stephen M.; Gold, Wayne R.; Goldstein, Dawn; Gottschalk, Irving E.;
Graham, David; Grant, Regina; Griffin, Jill; Guest, Matt; Habenstreit, David; Hankins, Raymond; Hayes, Brian; Heinzmann,
Kym; HELTZER, LES (Hdqs); Hirozawa, Kent; Hollo, Elana R.; Hooks, Ronald K.; Howard, Deidran; Jacob, Fred B.; James,
Kathleen; Jones, Harry; Joseph, Gloria; Kane, Robert F.; Karsh, Aaron; Katz, Judy; Kearney, Barry J.; Kelly, David A.;
Kilpatrick, Elizabeth; Kinard, Martha E.; Krafts, Andrew J.; Lee, Sydney A.; Lennie, Rachel G.; Levin, Nelson; Levitan,
Daniel; Ley, Rhonda; Lieber, Margery E.; Liebman, Wilma B.; Lightner, J. Michael; Lineback, Rik D.; Martin, David P.;
Mattina, Celeste J.; McDermott, James J.; McKinney, M. Kathleen; Mills, Jacqueline; Moore-Duncan, Dorothy L.; Moran,
Gail R.; Morgan, Terry A.; Murphy, James R.; Ohr, Peter S.; Osthus, Marlin O.; Overstreet, Cornele; Pearce, Mark G.;
Purcell, Anne G.; Reynolds, Vanita S.; Rivchin, Julie Y.; Robinson, Miles A; Rosenberg, Joshua; Saunders, Josh D; Schiff,
Robert; Shapiro, Ken; Siegel, Richard A.; Simms, Abby; Smith, Barry F.; Solomon, Lafe E.; Sophir, Jayme; Spector,
Jennifer R.; Tellem, Elbert F.; Tendrich, Robert; Thompson, Scott C.; Tuli, Manisha E.; Wagner, Anthony R.; Williams,
Harold; Yaffe, Deborah; Zick, Lara S.
Subject: Legal News FYI
Legal eagles fly high at Crain's inaugural awards program, summit
Crain's Detroit Business 4/10/11 8:42 PM
Words matched: Lafe Solomon
Crain's Detroit Business and its partners in the inaugural General and In-House Counsel Awards will honor top legal minds and provide
a forum for legal
...trends in the automotive sector. Speakers for the event include: Lafe Solomon, acting general counsel for the National Labor
Relations Board ;
Not responsive
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Anna Aronova, Michael Berger - Weddings
The New York Times 4/8/11 9:52 PM
Words matched: National Labor Relations Board
Dr. Anna Aronova and Michael Brandon Berger were married Saturday evening at the North Ritz Club, a caterer in Syosset, N.Y.
Cantor Sergei Schwartz
...Island. The bridegroom is a lawyer in Brooklyn with the National Labor Relations Board, for which he investigates and litigates
accusations of...
Kleiner and Weil on NLRA Remedies
Workplace Prof Blog 4/8/11 5:20 PM
Words matched: Labor Relations, NLRA, National Labor Relations Act
Morris Kleiner (Minnesota) and David Weil (Boston University) have posted on the NBER Working Paper site their piece, "Evaluating
the Effectiveness
Kleiner and Weil on NLRA Remedies Morris Kleiner (Minnesota) and David Weil (Boston University) have posted on the NBER
Working Paper site their ...
(Let me know if you would like a copy of this article -Andrew)
Anti-union fight intensifies in S.C.
TheSunNews 4/10/11 7:47 AM
Critics: Effort distracts from real issues
...workers the right to secret ballots in union elections. The National Labor Relations Board has threatened to sue South Carolina,
claiming the...
Andrew Martin
Librarian (Law)
1099 14th Street NW
Suite 800
Washington, DC 20570
(202) 273-3724
(202) 273-2906 fax
andrew.martin@nlrb.gov
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Non-Responsive
NLRB-FOIA-00005516
Non-Responsive
NLRB-FOIA-00005517
Non-Responsive
NLRB-FOIA-00005518
Non-Responsive
NLRB-FOIA-00005519
Non-Responsive
NLRB-FOIA-00005520
Non-Responsive
NLRB-FOIA-00005521
Non-Responsive
NLRB-FOIA-00005522
Non-Responsive
NLRB-FOIA-00005523
Non-Responsive
NLRB-FOIA-00005524
Non-Responsive
NLRB-FOIA-00005525
Non-Responsive
NLRB-FOIA-00005526
Non-Responsive
NLRB-FOIA-00005527
Non-Responsive
NLRB-FOIA-00005528
Non-Responsive
NLRB-FOIA-00005529
Non-Responsive
NLRB-FOIA-00005530
Non-Responsive
NLRB-FOIA-00005531
Non-Responsive
NLRB-FOIA-00005532
Non-Responsive
NLRB-FOIA-00005533
Non-Responsive
NLRB-FOIA-00005534
Non-Responsive
NLRB-FOIA-00005535
Non-Responsive
NLRB-FOIA-00005536
Non-Responsive
NLRB-FOIA-00005537
Non-Responsive
NLRB-FOIA-00005538
Non-Responsive
NLRB-FOIA-00005539
Non-Responsive
NLRB-FOIA-00005540
Non-Responsive
NLRB-FOIA-00005541
Non-Responsive
NLRB-FOIA-00005542
Non-Responsive
NLRB-FOIA-00005543
Non-Responsive
NLRB-FOIA-00005544
Non-Responsive
NLRB-FOIA-00005545
Non-Responsive
NLRB-FOIA-00005546
Non-Responsive
NLRB-FOIA-00005547
Non-Responsive
NLRB-FOIA-00005548
Non-Responsive
NLRB-FOIA-00005549
Non-Responsive
NLRB-FOIA-00005550
Non-Responsive
NLRB-FOIA-00005551
Non-Responsive
NLRB-FOIA-00005552
Non-Responsive
NLRB-FOIA-00005553
Non-Responsive
NLRB-FOIA-00005554
Non-Responsive
NLRB-FOIA-00005555
Non-Responsive
NLRB-FOIA-00005556
Non-Responsive
NLRB-FOIA-00005557
Non-Responsive
NLRB-FOIA-00005558
Non-Responsive
NLRB-FOIA-00005559
Non-Responsive
NLRB-FOIA-00005560
Non-Responsive
NLRB-FOIA-00005561
Non-Responsive
NLRB-FOIA-00005562
Non-Responsive
NLRB-FOIA-00005563
Non-Responsive
NLRB-FOIA-00005564
Non-Responsive
NLRB-FOIA-00005565
Non-Responsive
NLRB-FOIA-00005566
Non-Responsive
NLRB-FOIA-00005567
Non-Responsive
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Non-Responsive
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Non-Responsive
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Non-Responsive
NLRB-FOIA-00005571
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NLRB-FOIA-00005573
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NLRB-FOIA-00005574
1
Microsoft Outlook
To: Abruzzo, Jennifer; Ahearn, Richard L.; Ananthanayagam, Shanti; Arlook, Martin M.;
Baniszewski, Joseph; Barker, Joseph; Becker, Craig; Blyer, Alvin P.; Bonett Jr., Edward J.;
Boren, Dennis R.; Burton, Spence; Carlton, Peter J.; Chester, Robert W.; Christman Jr.,
Thomas J.; Cleeland, Nancy; Colwell, John F.; Cowen, William B.; Dreeben, Linda J.; Eddins-
Hill, Rosalind Elaine; Englehart, Bob; Farrell, Ellen; Fedorova, Ioulia; Ferguson, John H.; Fies-
Keller, Cara L.; Figueroa, Marta; Flynn, Terence F.; Franklin, Kirk; Garza, Jose; Glasser,
Stephen M.; Gold, Wayne R.; Goldstein, Dawn; Gottschalk, Irving E.; Graham, David; Grant,
Regina; Griffin, Jill; Guest, Matt; Habenstreit, David; Hankins, Raymond; Hayes, Brian;
Heinzmann, Kym; HELTZER, LES (Hdqs); Hirozawa, Kent; Hollo, Elana R.; Hooks, Ronald K.;
Howard, Deidran; Hoyte, Joan E.; Jacob, Fred B.; James, Kathleen; Jones, Harry; Joseph,
Gloria; Kane, Robert F.; Karsh, Aaron; Katz, Judy; Kearney, Barry J.; Kelly, David A.;
Kilpatrick, Elizabeth; Kinard, Martha E.; Krafts, Andrew J.; Lee, Sydney A.; Lennie, Rachel G.;
Levin, Nelson; Levitan, Daniel; Ley, Rhonda; Lieber, Margery E.; Liebman, Wilma B.; Lightner,
J. Michael; Lineback, Rik D.; Martin, David P.; Mattina, Celeste J.; McDermott, James J.;
McKinney, M. Kathleen; Mills, Jacqueline; Moore-Duncan, Dorothy L.; Moran, Gail R.; Morgan,
Terry A.; Murphy, James R.; Ohr, Peter S.; Osthus, Marlin O.; Overstreet, Cornele; Pearce,
Mark G.; Purcell, Anne G.; Reynolds, Vanita S.; Rivchin, Julie Y.; Robinson, Miles A;
Rosenberg, Joshua; Saunders, Josh D; Schiff, Robert; Shapiro, Ken; Siegel, Richard A.;
Simms, Abby; Smith, Barry F.; Solomon, Lafe E.; Sophir, Jayme; Spector, Jennifer R.; Tellem,
Elbert F.; Tendrich, Robert; Thompson, Scott C.; Tuli, Manisha E.; Wagner, Anthony R.;
Williams, Harold; Yaffe, Deborah; Zick, Lara S.
Subject: NBA ulp charges
House Panel Leaders Disappointed' by NLRB
Failure to Produce Boeing Case Documents
House Education and the Workforce Committee Chairman John Kline (R-Minn.) and Phil Roe (R-Tenn.),
chairman of the panel's Health, Employment, Labor, and Pensions Subcommittee, May 24 said they were
disappointed that the National Labor...
UWU Members Ratify Three-Year Contract
With New Jerseys Public Service Group
Members of Utility Workers Union Local 601 have ratified by a 93 percent majority of voting members a
three-year contract with Public Service Enterprise Group Inc. covering about 1,300 employees of the
Newark, N.J.-based utility, a local...
Labor Board: BMW salesman wrongfully fired
RedEye: Chicago's 05/24/11 16:20
Words matched: National Labor Relations Act
The National Labor Relations Board has issued a complaint against Knauz BMW for allegedly wrongfully firing an employee who
complained on his Facebook page about a dealership event.
...that the employee's Facebook posting was protected under the National Labor Relations Act, because it concerned a discussion
among employees ...
Labors Hail Mary pass
Washington Post 05/24/11 21:59
Words matched: National Labor Relations Act
This is a maddening time for anyone concerned about the lives of working-class Americans. The frustration and anger that suffused
AFL-CIO President Richard Trumkas declaration last week that labor would distance itself from the Democratic Party was both clear
and widely noted.
...reprisals. American business has poked so many holes in the 1935 National Labor Relations Act that it now affords workers no
protections at all .
Power plant labor fight
Cape Cod Online (AP) 05/25/11 02:31
SANDWICH The union local representing workers at the Canal Generating Station has charged the plant's owner with infringing on
employees' labor rights.
NLRB-FOIA-00005575
2
...fixed." Local 369 filed a charge against GenOn with the National Labor Relations Board on Friday. The labor relations board
receives between...
Brownsville hospital scene of union showdown
Brownsville Herald (AP) 05/24/11 22:39
Under a hot sun and bedecked in red scrubs, seven registered nurses who were fired from their jobs at Valley Regional Medical Center
and their supporters held a picket rally in front of the hospital midday Tuesday.
which will verify the signatures. The matter then goes to the National Labor Relations Board, which will decide whether nurses get to
vote again...
NBA players plead to block lockout, but swift response unlikely
Sports Illustrated 05/24/11 20:53
Words matched: National Labor Relations Board, NLRB
The NBA players' union has made the first move in what will likely be a long legal chess match played out in mediation rooms and
courthouses. Earlier today, the union filed an unfair labor practices charge with the National Labor Relations Board (NLRB), asserting
that the NBA refuses to bargain in g
Earlier today, the union filed an unfair labor practices charge with the National Labor Relations Board (NLRB), asserting that the NBA
refuses to...
Andrew Martin
Librarian (Law)
1099 14th Street NW
Suite 800
(202) 273-3724
(202) 273-2906 fax
NLRB-FOIA-00005576
1
Microsoft Outlook
To: Liebman, Wilma B.; Solomon, Lafe E.; Cleeland, Nancy; Schiff, Robert; Colwell, John F.;
Garza, Jose
Today saw significantly decreased traffic. We saw around 25 blogs posts with mentions of the NLRB today, while
yesterday there were in excess of 75. Significantly, about half of the Twitter traffic was favorable to the NLRB, stemming
from a Think Progress blog post, a Huffingtonpost piece, and a few union blog postings.
The Think Progress piece reported on the floor speeches yesterday:
http://wonkroom.thinkprogress.org/2011/05/03/gop-workers-thugs/
The Huffingtonpost piece was significant in that it netted over 1600 comments from users and includes
this paragraph: Graham said Tuesday that he intends to introduce another piece of legislation next week
that would "defund" the complaint against Boeing. Asked exactly how that would work, Graham would
only say that the move would be "a shot across [the NLRB's] bow."
http://www.huffingtonpost.com/2011/05/03/right-to-work-senate-nlrb_n_857021.html
On the other side, the only story making the rounds concerned yesterdays Boeing letter to Lafe. An
example: http://washingtonexaminer.com/blogs/beltway-confidential/2011/05/boeing-slams-nlrb-
making-false-accusations
Tony Wagner
NLRB-FOIA-00005577
1
Microsoft Outlook
From: Garza, Jose
NLRB-FOIA-00005578
1
Microsoft Outlook
From: Garza, Jose
To: Kearney, Barry J.; Abruzzo, Jennifer; Mattina, Celeste J.; Ahearn, Richard L.
Attachments:
available.
From: Garza, Jose
Non-Responsive
NLRB-FOIA-00005579

NLRB-FOIA-00005580

NLRB-FOIA-00005581

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1
Microsoft Outlook
From: Nancy Cleeland
To: Liebman, Wilma B.; Solomon, Lafe E.
Sent: Wed May 11 07:12:20 2011
Subject: csm story
Impressive job from the Christian Science Monitor. Shows the difference a good reporter and an investment in
time can make.
http://www.csmonitor.com/USA/Politics/2011/0510/Boeing-s-South-Carolina-move-Illegal-union-bashing-or-
just-good-business
Non-Responsive
Exemption 6
NLRB-FOIA-00005585
1
Microsoft Outlook
NLRB-FOIA-00005586
2
###
_____________________________________________________________
NLRB-FOIA-00005587
3
prohibited.
____________________________________________________________
NLRB-FOIA-00005588
NLRB-FOIA-00005589
1
Microsoft Outlook
Garza, Jose
businesses
Tony Wagner
NLRB-FOIA-00005590
1
Microsoft Outlook
Sent: Monday, May 16, 2011 4:48 PM
To: Liebman, Wilma B.; Solomon, Lafe E.; Cleeland, Nancy; Schiff, Robert; Garza, Jose; Colwell,
John F.
Traffic was down significantly on Boeing today
The day started with discussion of George Wills column from yesterdays Post, but saw significant traction for
Media Matters refutation of some of the coverage. : http://mediamatters.org/research/201105140001 There was
very little new information and few new articles posted. National Right to Work Foundation tried to make some
splash with an announcement that theyve filed a FOIA request for documents related to the Boeing complaint:
http://www.nrtw.org/en/press/2011/05/NLRB-Boeing-FOIA-request-05162011
The Arizona Star Twitter firing case was also in the mix today, mostly with discussion of the line between
inappropriate comments and protected activity:
http://www.abajournal.com/news/article/nlrb_says_newspapers_firing_of_reporter_over_twitter_posts_was_lawful
/?utm_source=feedburner&utm_medium=feed&utm_campaign=ABA+Journal+Top+Stories
Tony Wagner
NLRB-FOIA-00005591
1
Microsoft Outlook
Garza, Jose
Subject: Social Media Trends
In addition to Boeing, we saw a new trending topic, the issues surrounding Dubuque Packing Co. It appears that the story
stems from a blog posted yesterday by Ron Meisburg: http://www.laborrelationsupdate.com/nlrb-searches-for-case-to-
revisit-dubuque-packing-relocation-bargaining-rules/, which got picked up for a National Review story co-authored by
Hans A. von Spakovsky from the Heritage Foundation. http://www.nationalreview.com/corner/267381/new-nlrb-boeing-
just-beginning-hans-von-spakovsky No main stream or reputable blogs or press have picked up the story.
For Boeing, a couple of notable additions to the conversation:
Speaker Boehner enter the fray with a brief blog post and a couple of tweets that were passed around:
http://www.speaker.gov/blog/?postid=241749 No new information or angles, just a new platform.
The National Right to Work Committee spent some time this morning distributing information on their FOIA
request for Boeing related materials: http://www.nrtwc.org/foia-seeks-records-of-possible-collusion-between-
white-house-governors-and-the-nlrb/
Tony Wagner
NLRB-FOIA-00005592
1
Microsoft Outlook
To: Wagner, Anthony R.; Garza, Jose; Solomon, Lafe E.
Subject: wondered why it was so quiet for us today
Its the NMBs turn, but still they managed to bring us into it
News Release
Delta Applauds House Committee Decision to Investigate Labor Board
Delta employees rejected union representation; partisan politics stifle voter choice
May 18, 2011
ATLANTA, May 18, 2011 /PRNewswire/ -- Delta Air Lines (NYSE: DAL) today applauded the decision of the U.S. House
of Representatives Committee on Oversight and Government Reform to further investigate the National Mediation Board's
(NMB) significant departure from decades of consistent interpretation of the Railway Labor Act.
(Logo: http://photos.prnewswire.com/prnh/20090202/DELTALOGO )
In the letter to the Chairman of the NMB, the Committee expressed its "concern" regarding the NMB's "recent decision to
advance a rule, which allows a minority of employees to determine union representation." Delta shares the Committee's
concern that there is "evidence tending to show that this change in the rule was the result of a predetermined effort to
advance a partisan policy agenda."
"This investigation is an important victory for Delta people because it will finally allow the facts to speak for themselves,"
said Mike Campbell, executive vice president of H.R. and Labor Relations. "Unfortunately, this is not the only recent
occasion when a federal labor agency has attempted an unprecedented shift in labor policy at the behest of unions. The
Committee's decision to investigate the questionable circumstances behind the NMB's voting rule change
follows last week's announcement that they would investigate similar partisan actions involving the National
Labor Relations Board and the Boeing Co."
Delta and Delta people have been targeted by two unions the Association of Flight Attendants (AFA) and the
International Association of Machinists (IAM) and two members of the NMB in a coordinated attempt to influence the
outcome of Delta's union elections by changing to a minority rules voting process. Union elections for Delta flight
attendants and ground employees were delayed until new voting rules were implemented. Meanwhile, the NMB
conducted elections at other airlines using the traditional majority voting rules that had been reviewed and maintained by
all administrations during the past 75 years.
Delta employees waited more than two years for the opportunity to vote in a representation election. In late 2010, they
participated in elections using the new minority voting rules and turned out at the polls in record numbers more than 94
percent of flight attendants and more than 80 percent of ground employees voted. Across all employee groups, in four
elections covering more than 50,000 employees, the majority of voters said no to representation by the pre-merger
Northwest unions. Today, Delta people are still waiting for their vote to count.
The Committee's letter requested documents and communication between the NMB and union officials, and
communication related to the NMB's election proceedings. A copy of the letter is available at http://oversight.house.gov.
Delta Air Lines serves more than 160 million customers each year, and was named by Fortune magazine as the most
admired airline worldwide in its 2011 World's Most Admired Companies airline industry list. With an industry-leading
global network, Delta and the Delta Connection carriers offer service to 346 destinations in 64 countries on six continents.
Headquartered in Atlanta, Delta employs 80,000 employees worldwide and operates a mainline fleet of more than 700
aircraft. A founding member of the SkyTeam global alliance, Delta participates in the industry's leading trans-Atlantic joint
venture with Air France-KLM and Alitalia. Including its worldwide alliance partners, Delta offers customers more than
13,000 daily flights, with hubs in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK,
Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita. The airline's service includes the SkyMiles frequent flier
program, the world's largest airline loyalty program; the award-winning BusinessElite service; and more than 50 Delta Sky
Clubs in airports worldwide. Delta is investing more than $2 billion through 2013 in airport facilities and global products,
services and technology to enhance the customer experience in the air and on the ground. Customers can check in for
flights, print boarding passes, check bags and review flight status at delta.com.
SOURCE Delta Air Lines
For further information: Delta Airlines Corporate Communications, +1-404-715-2554, news.delta.com
Nancy Cleeland
(202) 273-0222
NLRB-FOIA-00005593
2
NLRB-FOIA-00005594
1
Microsoft Outlook
Garza, Jose
Subject: Social MediaTrends
Was a very quiet day on social media no new trending topics and very little traffic on Boeing.
One new story on Boeing was Bill Goulds statement, which gave some fodder for the Chamber and friends:
http://www.redstate.com/laborunionreport/2011/05/18/former-clinton-nlrb-chairman-opposes-obama-nlrb-attack-
on-boeing/?utm_source=twitterfeed&utm_medium=twitter Couple with a column by Peter Schaumber in the Daily
Caller: http://dailycaller.com/2011/05/18/the-national-labor-relations-boards-attack-on-the-secret-ballot/2/
At the end of the day we posted news of a complaint against a New York non profit regarding Facebook firings. I
suspect that will be the subject of discussion overnight: http://www.nlrb.gov/news/complaint-issued-against-new-
york-nonprofit-unlawfully-discharging-employees-following-facebook
Apart from that there were sporadic mentions of the Arizona amendment lawsuit, and some continued discussion of our
social media cases.
Tony Wagner
NLRB-FOIA-00005595
1
Microsoft Outlook
Garza, Jose
Subject: Social Media Trends
The newest Facebook complaint did get some traction today. An example blog posting:
http://milwaukeeemploymentlawyer.blogspot.com/2011/05/nlrb-files-another-facebook-
firing.html?sms_ss=twitter&at_xt=4dd582efab8794c9,0
For Boeing, the AFL-CIO published a blog post yesterday that made the rounds today. It points to the
conservative response to Boeing as part of a larger war against workers:
http://blog.aflcio.org/2011/05/18/republican-nlrb-threats-part-of-bigger-war-on-workers/
It appears that certain opponents of the Boeing complaint continue to unsuccessfully draw democrats into the
argument, calling for various democratic politicians to make a statement:
http://www.weeklystandard.com/blogs/not-single-dem-senator-will-support-effort-curb-nlrb-after-boeing-
overreach_567514.html?utm_source=twitterfeed&utm_medium=twitter
Sen. Demint held a closed media call this morning, and several of his statements were retweeted throughout the
day. No new information was included. Coverage of the call in this paper has a rather humorous headline U.S.
Sen. Jim DeMint continues opposition to Boeing complaint: http://www.charlestonbusiness.com/news/39709-u-s-
sen-jim-demint-continues-opposition-to-boeing-complaint
Tony Wagner
NLRB-FOIA-00005596
1
Microsoft Outlook
Garza, Jose
An interesting day. The conversation was split fairly evenly between the Facebook cases and Boeing:
The Facebook conversation centered on an HR blog posting this morning. Its a good description of how the line
is shaping up on how to determine what constitutes protected activity: http://www.hrmorning.com/nlrb-stance-on-
social-networks-getting-a-little-
clearer/?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+hrmorning+%28HRMorning.co
m%29
For Boeing, those opposed had almost nothing new to say today while we say a burst of support on some blogs
and editorial pages. Some notable examples:
o ARAWs Kimberly Freeman Brown in the Hill: http://thehill.com/blogs/congress-blog/politics/162389-right-
wing-flies-off-course-on-boeing-controversy
o Labor professor John Logan in the News Tribune:
http://www.thenewstribune.com/2011/05/18/1669563/conservatives-extend-assault-on.html
o Labor organizer John Eidelson: http://www.commondreams.org/view/2011/05/20-9
o American Constitution Society blog: http://www.acslaw.org/acsblog/rightwing-policymakers-pundits-target-
nlrb-over-its-charge-that-boeing-is-retaliating-agains
Enjoy the weekend!
Tony Wagner
NLRB-FOIA-00005597
1
Microsoft Outlook
To: Solomon, Lafe E.; Garza, Jose
Subject: FW: Kline and Roe Statements on NLRB's Failure to Adequately Respond to Congressional
Inquiry
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Subject: Kline and Roe Statements on NLRB's Failure to Adequately Respond to Congressional Inquiry
May 24, 2011
(202) 226-9440
Kline and Roe Express Disappointment with NLRB's
Inadequate Response to Congressional Inquiry
"The general counsel's office has offered to discuss our request further, and
we intend to take them up on their offer."
WASHINGTON, D.C. --- Today, Republican leaders on the U.S. House Committee on Education and
the Workforce responded to the National Labor Relations Board's (NLRB) failure to provide requested
documents related to its complaint against The Boeing Company. On May 5th, Chairman John Kline
(R-MN) and Representative Phil Roe, M.D. (R-TN) requested information from the NLRB to address
NLRB-FOIA-00005598
2
questions surrounding the timing of the Boeing complaint, as well as concerns about public statements
made by NLRB officials.
"The NLRB is not immune from congressional oversight or public scrutiny," said Chairman Kline.
"While this insufficient response is not entirely unexpected from todays board, it is still extremely
disappointing. In the case of Boeing, there are legitimate questions over public statements made by
NLRB officials and the timing of its complaint. The American people deserve a full explanation and
Congress has a right to a complete response. The general counsel's office has offered to discuss our
request further, and we intend to take them up on their offer."
"The troubling allegations the NLRB has filed against Boeing warrant further investigation," said Rep.
Phil Roe, chairman of the Subcommittee on Health, Employment, Labor, and Pensions. "I am
disappointed the NLRB chose not to fully respond to important inquires made in the letter because the
American people deserve answers. While all the facts in this case are still in dispute, thousands of jobs
are at risk in South Carolina. The extreme remedy demanded by the NLRB will have a detrimental
effect on local economies and a chilling effect on the American workforce. I am very concerned about
NLRB's actions in this matter, and will be exploring these allegations further."
"Congress cannot stand by while the NLRB attempts to impose sweeping changes to labor laws that
govern the nation's workplaces," continued Chairman Kline. "For more than two years, the Obama
board has pursued an activist agenda that champions the interests of Big Labor over the interests of all
American workers. Republicans have pledged to make job creation a leading priority, and our
oversight of the NLRB will remain an important part of that effort."
To read the May 5th letter by Chairman Kline and Rep. Roe, click here.
To read the NLRB's response, click here.
###
NLRB-FOIA-00005599
1
Microsoft Outlook
Subject: boeing talks about ramping up 787 production to 12 or more a month
http://www.thestreet.com/story/11131798/1/boeing-hints-at-787-production-boost.html?kval=dontmiss
Nancy Cleeland
(202) 273-0222
NLRB-FOIA-00005600
1
Microsoft Outlook
Right to Work Laws
fyi
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Laws
Thanks
(703) 770-
3364
strictly voluntary.
NLRB-FOIA-00005601
2
case is pending.
NLRB-FOIA-00005602
NLRB-FOIA-00005603
NLRB-FOIA-00005604
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NLRB-FOIA-00005635
NLRB-FOIA-00005636
NLRB-FOIA-00005637
NLRB-FOIA-00005638
NLRB-FOIA-00005639
NLRB-FOIA-00005640
1
Microsoft Outlook
Subject: bryson
In a Senate hearing, John Bryson said he thought the complaint against Boeing was wrong. This is Obamas pick for
commerce secretary. I just got a call about it.
Nancy Cleeland
(202) 273-0222
NLRB-FOIA-00005641
1
Microsoft Outlook
To: Cleeland, Nancy; Solomon, Lafe E.; Garza, Jose
Subject: RE: bryson
Its all over Twitter at the moment too links to this AP story:
http://seattletimes.nwsource.com/html/nationworld/2015386247_apuscommercenomineesenate.html?syndication=rss
Subject: bryson
Nancy Cleeland
(202) 273-0222
NLRB-FOIA-00005642
1
Microsoft Outlook
Subject: FYI
Non-Responsive
NLRB-FOIA-00005643
1
Microsoft Outlook
Subject: FYI
Non-Responsive
NLRB-FOIA-00005644
1
Microsoft Outlook
From: Todd, Dianne
Sent: Tuesday, November 16, 2010 11:54 AM
To: Ahearn, Richard L.; Jablonski, Colleen G.
Subject: Pending 787 Boeing case (outsourcing of interior 787 part), 19-CA-32811
I spoke with Boeing attorney Drew Lunt this morning and he informed me that Boeing did not want to
submit information on this case prior to the meeting with the General Counsel on the Advice case (19-
CA-32431). I informed Lunt that the issue in this newest case outsourcing 787 interior work -
appeared to be an extension of the allegations in the last case as that case included allegations that
Boeing had announced in late 2009 that it would be outsourcing 787 supporting work. I further
informed him that, although I could not say whether Advice would address this new charge, I believed
that the Region would be forwarding the evidence we had regarding this new case to Advice prior to
the meeting with the General Counsel. Lunt stated that he would confer with his client.
Dianne
NLRB-FOIA-00005645
1
Microsoft Outlook
Sent: Tuesday, November 16, 2010 12:01 PM
To: Todd, Dianne; Jablonski, Colleen G.
Subject: RE: Pending 787 Boeing case (outsourcing of interior 787 part), 19-CA-32811
Thanks!
From: Todd, Dianne
Dianne
NLRB-FOIA-00005646
1
Microsoft Outlook
From: Todd, Dianne
Drew Lunt called me back and informed me that Boeing is going to respond to this latest charge in its
submission to Advice which is due on December 6, 2010. Drew will forward a copy to us at that time.
Thanks!
From: Todd, Dianne
Dianne
NLRB-FOIA-00005647
1
Microsoft Outlook
From: Kobe, James
Sent: Monday, March 28, 2011 9:32 PM
To: Jablonski, Colleen G.
Subject: 3/23 EOM LIST
Attachments: EOM MAR 2011 as of Mar23.xls
Here it is !
Jim Kobe
ARD, Region 19
206-220-6314
NLRB-FOIA-00005648
Non-Responsive
NLRB-FOIA-00005649
Non-Responsive Non-Responsive
NLRB-FOIA-00005650
19-CA-32811-001 Boeing Company Todd 3
related to Boeing case now before Advice
EXCUSED FOR MARCH:
Non-Responsive
Non-Responsive
NLRB-FOIA-00005651
Non-Responsive
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Non-Responsive
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1
Microsoft Outlook
From: Jablonski, Colleen G.
To:
Subject: FW: 3/23 EOM LIST
From: Kobe, James
To: Jablonski, Colleen G.
Subject: 3/23 EOM LIST
Here it is !
Jim Kobe
ARD, Region 19
206-220-6314
NLRB-FOIA-00005654
NLRB-FOIA-00005655
NLRB-FOIA-00005656
EXCUSED FOR MARCH:
Non-Responsive
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Non-Responsive
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Page 5 of 5
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1
Microsoft Outlook
From: Jablonski, Colleen G.
Sent: Tuesday, March 29, 2011 12:47 PM
To: Rooker, Karen; Eskenazi, Martin; Sweeney, Brian
Cc: Kobe, James; Pomerantz, Anne; Estep, Susan C.
Subject: eom status update
NLRB-FOIA-00005660
Non-Responsive
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EXCUSED FOR MARCH:
Page 2 of 5
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1
Microsoft Outlook
From: BNA Highlights [bhighlig@bna.com]
Sent: Monday, June 20, 2011 11:23 PM
To: Kearney, Barry J.
Subject: Jun. 20 -- BNA, Inc. Daily Labor Report
E-mail not displaying correctly? View publication in your browser: http://news.bna.com/dlln
Monday, June 20, 2011 Number 118
LEADING THE NEWS
First Amendment
Free Speech Clauses Public Concern Test
Applies to Employees Petition Clause Claims
Public employees who sue under the Civil Rights Act of 1871 (42
U.S.C. 1983) claiming retaliation in violation of the petition
clause of the First Amendment to the U.S. Constitution must
show that, as under the First Amendments...
Labor Law
Justices Decline to Review Conviction
Of UAW Official Charged With Conspiracy
The U.S. Supreme Court June 20 declined to review a federal
appeals court decision upholding the conviction of a former
United Auto Workers official on charges of conspiracy to violate
labor laws and extort jobs from General Motors Corp. in...
Sex Discrimination
Justices Hand Wal-Mart a Big Victory,
Reversing Sex Bias Class Certification
Reversing a federal appeals court decision certifying a massive
sex discrimination class action against Wal-Mart Stores Inc., a
divided U.S. Supreme Court June 20 ruled that the female
plaintiffs failed to satisfy the requirements of Rule...
NEWS
Airlines
Frontier Pilots Approve Contract Extension
That Includes Concessions, Equity Stake
DENVERMembers of the Frontier Airline Pilots Association
ratified a new labor agreement June 17 that provides them with
an equity stake in the flagging Denver airline but also came with
deep concessions. ...
NLRB New Filing Finder
Display Latest Filings
View Recent Articles By:
Agencies
States
Courts/Tribunals
Federal Statutes
Industries
Law Firms
Unions
Cases Reported
Key Features:
Analysis & Perspective
Special Reports
Also in the Courts
NLRB Summaries
Wage Trend Indicator
Calendar of Events
NLRB-FOIA-00005666
2
Disabilities
Boss's Negative Comments About Employee
With Dyslexia Fuel Rehabilitation Act Claims
A former Army employee with dyslexia can proceed with her
claims under the Rehabilitation Act that she was fired because
of her disability, the U.S. District Court for the Eastern District
of California ruled June 1 (McCoy v. Dep't of Army,...
Discrimination
University Ordered to Pay $364,500 for Bias
Against Chinese-American Female Professor
BOSTONThe Massachusetts Commission Against
Discrimination June 15 announced that it had taken the
"unprecedented step of ordering a public university to promote
an associate professor and also to pay $364,500...
Employment
Chamber Report Highlights Strategies
States Use to Stay Competitive, Create Jobs
A report released June 20 by the U.S. Chamber of Commerce
discusses specific strategies that all 50 states are using to
remain competitive, restore jobs, and bolster economic growth.
...
Entertainment
SAG, AFTRA Members Meet
To Map Out Details of Possible Merger
Members of the Screen Actors Guild and the American
Federation of Television and Radio Artists held a weekend
meeting to discuss details of a possible merger of the two
entertainment unions, SAG and AFTRA announced June 19. ...
FLSA
Businesses Challenge Tip Credit Notice Rule,
Claiming DOL Failed to Give Notice of Change
Business groups representing restaurants and other eating and
drinking establishments filed a lawsuit June 16 in federal district
court in Washington, D.C., alleging that the Labor Department
recently implemented a final regulation making...
Labor Law
OLMS Proposes Rule to Expand Reporting
Of Persuader Agreements on LM-10s and 20s
A proposed rule from the Labor Department's Office of Labor-
Management Standards would revise the interpretation of
"advice" to expand the requirements for reporting persuader
agreements between employers and labor relations...
Manufacturing
General Electric Reaches Tentative Contracts
With Unions That Represent 15,200 Workers
The International Union of Electrical Workers, an affiliate of the
Communications Workers of America, and the United Electrical
Workers June 19 reached tentative agreement with the General
Electric Co. on four-year national contracts...
NLRB-FOIA-00005667
3
Mining
UMW Members Ratify Agreement With BCOA;
Union to Take Same Pact to Other Operators
Members of the United Mine Workers have overwhelmingly
ratified a new five and one-half year agreement with the
Bituminous Coal Operators Association, the union announced
late June 17....
Railroads
Smaller Freight Rail Unions Frown
On Tentative Railroad Pact Reached by UTU
Following the release of details of a tentative collective
bargaining agreement reached between the largest of the 13
unions representing freight railroad workers and the employers'
bargaining team, the remaining unions June 16 announced...
Retail Stores
Workers at Long Island Target Store
Reject UFCW Representation as Charges Filed
Workers at a Target Corp. retail store in Valley Stream, N.Y.,
June 17 voted 137-95 to reject representation by the United
Food and Commercial Workers, a National Labor Relations
Board official told BNA June 20. ...
Safety & Health
Dole, Foreign Agricultural Workers Reach
Tentative Settlement on Pesticide Exposure
LOS ANGELESDole Food Co. Inc. has agreed to settle pesticide
exposure claims filed by more than 5,000 agricultural workers in
Nicaragua, Costa Rica, and Honduras, an attorney representing
the plaintiffs told BNA June 17 (Abarca v....
Safety & Health
MSHA Issues Final Rule for Rock Dust
To Reduce Likelihood of Coal Mine Explosions
Operators of underground bituminous coal mines must ensure
that rock dust contains higher concentrations of incombustible
material as a way to reduce the likelihood of mine explosions,
the Labor Departments Mine Safety and Health...
Trade
Greenspan Questions Jobs Focus
In Trade Policy, Kirk Stresses Benefits
Former Federal Reserve Chairman Alan Greenspan June 17
questioned the focus on employment in trade policy at a
roundtable discussion while U.S. Trade Representative Ron Kirk
stressed the importance of trade-related job creation to make...
Unemployment Insurance
DOL Gives $48.7 Million to Assess UI Recipients
The Labor Department will provide $48.7 million in funding for
37 states and the District of Columbia to implement re-
employment and eligibility assessments for beneficiaries of
unemployment insurance, DOL announced June 20....
Unfair Labor Practices
NLRB-FOIA-00005668
4
Board Allows Limited Boeing Case Role
To South Carolina Workers Who Filed Motion
The National Labor Relations Board ruled June 20 that three
workers from Boeing Co.'s South Carolina aircraft plant should
be allowed a limited opportunity to participate in the unfair
labor practice case in which Acting General Counsel...
Whistleblowers
City Worker's Whistleblower Claim
Not Ripe for Dismissal, District Court Decides
A senior contract specialist for the city of Washington, D.C., who
was selected for a reduction in force after he made multiple
complaints about fraudulent and wasteful government
contracts, may proceed with his claim under the District of...
Work Stoppages
UNITE HERE Conducts One-Day Strike
At Hyatt Regency Chicago Over Stalled Talks
UNITE HERE Local 1 June 20 began a one-day strike at the
Hyatt Regency Chicago in protest over stalled collective
bargaining for renewal of a labor contract that expired 20
months ago and against outsourced work and alleged dangerous
working...
SPECIAL REPORT
Hiring
Using Social Media During Hiring Process
Seen Exposing Employers to Bias Claims
While social media tools such as Twitter, Facebook, and
LinkedIn allow employers to access vast amounts of information
about job applicants, hiring managers who even casually use
these tools to gather information about a prospective
employee...
CONFERENCE REPORT
Immigration
Attorneys Outline Specific Issues Facing
Small Employers in the Immigration Context
SAN DIEGOSmall businesses are likely to be inexperienced in
the complexities of hiring immigrant workers, and attorneys
should be prepared to help them navigate the process, speakers
said June 17 at the American Immigration Lawyers...
Immigration
Attorneys Say L-1B and B-1 Visa Issues
Among Hottest' in Business Immigration Law
SAN DIEGOSeveral visa concernsincluding the processing of
L-1B visas and the use of B-1 visas in lieu of H-1B visastop
the list of "hottest" issues in business immigration law, speakers
said June 16 at the American...
NLRB-FOIA-00005669
5
TEXT
Supreme Court Denies Review in Three Labor,
Employment Cases June 20, 2011
Following are summaries of the three labor and employment law
cases denied Supreme Court review June 20, 2011....
U.S. Supreme Court Decision in Duryea v. Guarnieri
U.S. Supreme Court Decision in Wal-Mart Stores Inc. v.
Dukes
CONFERENCE CALENDAR
Calendar of Events
This e-mail is part of your subscription to Daily Labor Report (ISSN 1522-
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the license agreement with BNA. Unauthorized access or distribution is
prohibited.
NLRB-FOIA-00005670
1
Microsoft Outlook
From: Perkins, Victoria
Sent: Wednesday, January 26, 2011 8:48 PM
To: Kobe, James
Subject: C Cases Open Spreadsheet as of January 26, 2011
Attachments: C Cases Open as of January 26, 2011.xls
Attached is spreadsheet
Vicky Perkins
ASA
Region 19 - Seattle
206-220-6331
NLRB-FOIA-00005671
Non-Responsive
NLRB-FOIA-00005672
Non-Responsive
NLRB-FOIA-00005673
Non-Responsive
NLRB-FOIA-00005674
19-CA-32431-001 Boeing Company 03/26/2010 Advice Todd, Dianne Y Jablonski, Colleen 529
Non-Responsive
Non-Responsive
NLRB-FOIA-00005675
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NLRB-FOIA-00005676
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NLRB-FOIA-00005677
Non-Responsive
NLRB-FOIA-00005678
Non-Responsive
NLRB-FOIA-00005679
Non-Responsive
NLRB-FOIA-00005680
Non-Responsive
NLRB-FOIA-00005681
Non-Responsive
NLRB-FOIA-00005682
Non-Responsive
NLRB-FOIA-00005683
Non-Responsive
NLRB-FOIA-00005684
Non-Responsive
NLRB-FOIA-00005685
Non-Responsive
NLRB-FOIA-00005686
Non-Responsive
NLRB-FOIA-00005687
1
Microsoft Outlook
a forum for legal
Relations Board ;
accusations of...
the Effectiveness
Not responsive
NLRB-FOIA-00005688
2
claiming the...
Andrew Martin
Librarian (Law)
1099 14th Street NW
Suite 800
(202) 273-3724
(202) 273-2906 fax
NLRB-FOIA-00005689
1
Microsoft Outlook
a forum for legal
Relations Board ;
accusations of...
the Effectiveness
Not responsive
NLRB-FOIA-00005690
2
claiming the...
Andrew Martin
Librarian (Law)
1099 14th Street NW
Suite 800
(202) 273-3724
(202) 273-2906 fax
NLRB-FOIA-00005691
1
Microsoft Outlook
a forum for legal
Relations Board ;
accusations of...
Not responsive
NLRB-FOIA-00005692
2
the Effectiveness
claiming the...
Andrew Martin
Librarian (Law)
1099 14th Street NW
Suite 800
(202) 273-3724
(202) 273-2906 fax
NLRB-FOIA-00005693
1
Microsoft Outlook
Not responsive
NLRB-FOIA-00005694
2
a forum for legal
Relations Board ;
accusations of...
the Effectiveness
claiming the...
Andrew Martin
Librarian (Law)
1099 14th Street NW
Suite 800
(202) 273-3724
(202) 273-2906 fax
NLRB-FOIA-00005695
1
Microsoft Outlook
Not responsive
NLRB-FOIA-00005696
2
a forum for legal
Relations Board ;
accusations of...
the Effectiveness
claiming the...
Andrew Martin
Librarian (Law)
1099 14th Street NW
Suite 800
(202) 273-3724
(202) 273-2906 fax
NLRB-FOIA-00005697
1
Microsoft Outlook
a forum for legal
Relations Board ;
Not responsive
NLRB-FOIA-00005698
2
accusations of...
the Effectiveness
claiming the...
Andrew Martin
Librarian (Law)
1099 14th Street NW
Suite 800
(202) 273-3724
(202) 273-2906 fax
NLRB-FOIA-00005699
1
Microsoft Outlook
Sent: Wednesday, June 01, 2011 7:32 AM
To: Abruzzo, Jennifer; Ahearn, Richard L.; Ananthanayagam, Shanti; Arlook, Martin M.;
Baniszewski, Joseph; Barker, Joseph; Becker, Craig; Blyer, Alvin P.; Bonett Jr., Edward J.;
Boren, Dennis R.; Burton, Spence; Carlton, Peter J.; Chester, Robert W.; Christman Jr.,
Thomas J.; Cleeland, Nancy; Colwell, John F.; Cowen, William B.; Dreeben, Linda J.; Eddins-
Hill, Rosalind Elaine; Englehart, Bob; Farrell, Ellen; Fedorova, Ioulia; Ferguson, John H.; Fies-
Keller, Cara L.; Figueroa, Marta; Flynn, Terence F.; Franklin, Kirk; Garza, Jose; Glasser,
Stephen M.; Gold, Wayne R.; Goldstein, Dawn; Gottschalk, Irving E.; Graham, David; Grant,
Regina; Griffin, Jill; Guest, Matt; Habenstreit, David; Hankins, Raymond; Hayes, Brian;
Heinzmann, Kym; HELTZER, LES (Hdqs); Hirozawa, Kent; Hollo, Elana R.; Hooks, Ronald K.;
Howard, Deidran; Hoyte, Joan E.; Jacob, Fred B.; James, Kathleen; Jones, Harry; Joseph,
Gloria; Kane, Robert F.; Karsh, Aaron; Katz, Judy; Kearney, Barry J.; Kelly, David A.;
Kilpatrick, Elizabeth; Kinard, Martha E.; Krafts, Andrew J.; Lee, Sydney A.; Lennie, Rachel G.;
Levin, Nelson; Levitan, Daniel; Ley, Rhonda; Lieber, Margery E.; Liebman, Wilma B.; Lightner,
J. Michael; Lineback, Rik D.; Martin, David P.; Mattina, Celeste J.; McDermott, James J.;
McKinney, M. Kathleen; Mills, Jacqueline; Moore-Duncan, Dorothy L.; Moran, Gail R.; Morgan,
Terry A.; Murphy, James R.; Ohr, Peter S.; Osthus, Marlin O.; Overstreet, Cornele; Pearce,
Mark G.; Purcell, Anne G.; Reynolds, Vanita S.; Rivchin, Julie Y.; Robinson, Miles A;
Rosenberg, Joshua; Saunders, Josh D; Schiff, Robert; Shapiro, Ken; Siegel, Richard A.;
Simms, Abby; Smith, Barry F.; Solomon, Lafe E.; Sophir, Jayme; Spector, Jennifer R.; Tellem,
Elbert F.; Tendrich, Robert; Thompson, Scott C.; Tuli, Manisha E.; Wagner, Anthony;
Williams, Harold; Yaffe, Deborah; Zick, Lara S.
Subject: Text of bill to block Boeing relocation
112th CONGRESS
1st Session
H. R. 1976
To amend the National Labor Relations Act to clarify the applicability of such Act with respect to States that
have right to work laws in effect.
IN THE HOUSE OF REPRESENTATIVES
MAY 24, 2011
Mr. SCOTT of South Carolina (for himself, Mr. WILSON of South Carolina, Mr. GOWDY, Mr. DUNCAN of
South Carolina, and Mr. MULVANEY) introduced the following bill; which was referred to the Committee on
Education and the Workforce
A BILL
To amend the National Labor Relations Act to clarify the applicability of such Act with respect to States that
have right to work laws in effect.
NLRB-FOIA-00005700
2
Be it enacted by the Senate and House of Representatives of the United States of America in Congress
assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the Job Protection Act.
SEC. 2. APPLICATION TO CERTAIN SPEECH, BUSINESS DECISIONS.
(a) Unfair Labor Practices.Section 8(a)(3) of the National Labor Relations Act (29 U.S.C. 158(a)(3)) is
amended by inserting before the semicolon at the end the following: : Provided further, That an employers
expression of any views, argument, or opinion related to the costs associated with collective bargaining, work
stoppages, or strikes, or the dissemination of such views, arguments, or opinions, whether in written, printed,
graphic, digital, or visual form, shall not constitute or be evidence of antiunion animus or unlawful motive, if
such expression contains no threat of reprisal or force or promise of benefit.
(b) Prevention of Unfair Labor Practices.Section 10 of the National Labor Relations Act (29 U.S.C. 160) is
amended
(1) in subsection (a), by inserting after the period at the end the following: : Provided further, That the
Board shall have no power to order any employer to relocate, shut down, or transfer any existing or planned
facility or work or employment opportunity, or prevent any employer from making such relocations,
transfers, or expansions to new or existing facilities in the future, or prevent any employer from closing a
facility, not developing a facility, or eliminating any employment opportunity unless and until the employer
has been adjudicated finally to have unlawfully undertaken such actions
(1) without advance notice to the labor organization, if any, representing the bargaining unit of the affected
employees, of the economic reason(s) for the relocation, shut down, or transfer of existing or future work; or
(2) as a primary and direct response to efforts by a labor organization to organize a previously
unrepresented workplace; and
(2) by adding at the end the following:
(n) Nothing in this Act shall prevent an employer from choosing where to locate, develop, or expand its
business or facilities, or require any employer to move, transfer, or relocate any facility, production line, or
employment opportunity, or require that an employer cease or refrain from doing so, or prevent any employer
from closing a facility or eliminating any employment opportunity unless the employer has been adjudicated
finally to have unlawfully undertaken such actions
(1) without advance notice to the labor organization, if any, representing the bargaining unit of the affected
employees, of the economic reason(s) for the relocation, shut down, or transfer of existing or future work; or
(2) as a primary and direct response to efforts by a labor organization to organize a previously
unrepresented workplace..
Andrew Martin
Librarian (Law)
1099 14th Street NW
Suite 800
(202) 273-3724
NLRB-FOIA-00005701
3
(202) 273-2906 fax
NLRB-FOIA-00005702
1
Microsoft Outlook
To: Cleeland, Nancy; Mattina, Celeste J.
Thx. BTW, Ill plan on sending you, Lafe and Barry the complaint tomorrow am as I send courtesy copies to the parties.
Rich
of the day.
Nancy Cleeland
(202) 273-0222
NLRB-FOIA-00005703
1
Microsoft Outlook
Sent: Thursday, April 21, 2011 2:44 PM
Subject: hi - i have a quick question for you
When you have a chancean editorial writer at the NYTimes would like to speak to someone on background about the
legal issues on the Boeing complaint. I wondered what you think.
Nancy Cleeland
(202) 273-0222
NLRB-FOIA-00005704
1
Microsoft Outlook
Subject: Nice economist piece
Dont know if you all saw this yet, but the Economist weighed in on Monday, and its certainly a different
perspective that what were seeing in most u.s. media:
http://www.economist.com/blogs/democracyinamerica/2011/04/boeings_labour_problems
There are lots of good points, but I really liked this one, which Ive been waiting for someone to make: If
Boeing is having more trouble with its unions than its competitors are, it's possible that the fault lies with
the company, rather than with the unions.
Nancy Cleeland
(202) 273-0222
NLRB-FOIA-00005705
1
Microsoft Outlook
Subject: DLR
disappointed that the National Labor Relations Board's acting general counsel has resisted their request for
internal documents concerning a highly publicized unfair labor practice complaint against Boeing Co.
Writing to the chairmen May 19 on behalf of Acting General Counsel Lafe E. Solomon, Celeste J. Mattina, the
NLRB's acting deputy general counsel, provided a two-page chronology of the agency's consideration of the
case.
But she told Kline and Roe that their extensive May 5 request for internal documents and research was the
first this Agency has ever received from a Committee of the House of Representatives with jurisdiction over the
Agency seeking documents within litigation files of an open enforcement action.
Writing that prematurely disclosing the acting general counsel's strategic plans could compromise the Boeing
litigation and result in an unfair advantage to one litigant over another, NLRB failed to produce the
documents Kline and Roe requested. However, the agency offered to meet with the chairmen to discuss further
information needs that you may have.
In the May 24 statement, Kline said that NLRB is not exempt from congressional oversight or public scrutiny.
But he added the general counsel's office has offered to discuss our request further, and we intend to take them
up on their offer.
Document Dispute Relates to Boeing Litigation
According to the NLRB complaint and a fact sheetissued by the acting general counsel, the International
Association of Machinists has represented Boeing production and maintenance employees in the Puget Sound
area of Washington, and in Portland, Ore., in two bargaining units that have been covered by a series of
collective bargaining agreements with the union
The company, which has a backlog of orders for its new 787 Dreamliner, announced in October 2009 that it
would build a second assembly line in North Charleston, S.C., rather than in the Puget Sound area (207 DLR A-
7, 10/29/09). The company said it planned to produce three Dreamliners per month in South Carolina in
addition to seven per month at the Puget Sound facility.
IAM filed an unfair labor practice charge over the Boeing announcement, and on April 20, NLRB's Seattle
regional director, Richard Ahearn, issued a complaint, authorized by Solomon, that alleges that the company's
actions violated National Labor Relations Act Section 8(a)(1), which prohibits an employer from interfering
with, restraining, or coercing employees in their exercise of rights under the federal labor law, and Section
8(a)(3), which makes it an unfair labor practice for an employer by discrimination in regard to hire or tenure of
employment or any term or condition of employment to encourage or discourage membership in any labor
organization.
The case, which has provoked public criticism and calls for legislative action (95 DLR C-1, 5/17/11) is
scheduled for a hearing before an administrative law judge in Seattle beginning on June 14.
Chairmen Requested NLRB Explanation, Documents
In their May 5 letter to Solomon, Kline and Roe acknowledged that the facts of case against Boeing are still in
dispute, but they expressed concern that the case could have significant consequences for job-creators and
workers.
Kline and Roe observed that the NLRB complaint references alleged statements made by Boeing officials
between October 2009 and March 2010 that work stoppages were one reason for choosing the new location.
NLRB-FOIA-00005706
2
But they observed that in June 2010, Ahearn was quoted by the Seattle Times as saying it would have been an
easier case for the union to argue if Boeing had moved existing work from Everett[, Wash.], rather than placing
new work in Charleston.
The chairmen said that 10 months after the newspaper interview, Ahearn signed the unfair labor practice
complaint against Boeing, which Solomon has said he authorized. Kline and Roe said [t]he pivot in position by
NLRB officials, as well as the unusual timing, raises serious concerns that warrant congressional inquiry.
They asked Solomon to provide by May 19 a description of what transpired between June 2010 and April 2011
that led the NLRB to alter its opinion in this matter, as well as all documents and communications between the
NLRB regional and national offices concerning the case. The House panel also asked for all documentation that
supports the NLRB view that work is being transferred' in this case, as well as [p]ast precedent that supports
a finding that Boeing violated sections 8(a)(3) and 8(a)(1) of the NLRA when it decided to locate, not transfer, a
second assembly line.
NLRB Official Explains Remarks, Chronology
Mattina responded at length in her May 19 letter concerning Ahearn's remarks and the chairmen's inquiry about
the timing of the eventual complaint against Boeing.
According to the NLRB letter, the charge filed by IAM District Lodge 751 in Seattle on March 26, 2010, was
investigated by the NLRB regional office until Aug. 31, 2010, when Ahearn submitted the case to NLRB's
Division of Advice in Washington, D.C. Such a submission was consistent with the agency's established
practice in cases of national significance, Mattina wrote.
Solomon recognized the significance of the case to the company and the union, Mattina said, and the acting
general counsel issued an Oct. 19, 2010, invitation for Boeing to make an oral presentation of its case in
Solomon's Washington, D.C., office. Boeing made its presentation on Dec. 15, 2010, and the union made an
oral presentation on Jan. 19, followed by a written statement of position.
According to NLRB, Solomon encouraged the company and the union to settle the dispute, and Ahearn signed
and issued the complaint on behalf of the acting general counsel on April 20 only after settlement efforts failed.
Mattina wrote that discrimination cases under Section 8(a)(3) of the NLRA involve shifting burdens and require
a careful and balanced assessment of whether protected conduct of employees was a motivating factor in the
employer's decision and whether the employer can affirmatively introduce evidence to demonstrate that the
challenged action would have taken place regardless of the employees' protected activity.
Ahearn's remarks merely reflect an appropriate appreciation of the delicate balancing and careful scrutiny of
often conflicting evidence, Mattina said. She added that while Ahearn had predicted in June 2010 that an
initial ruling in the case was weeks away, the delay in issuance of a complaint until April 2011 was the
result of Solomon's giving the parties additional time to argue their positions and to explore possible settlement
before advancing the case by issuing a complaint.
Official Describes Objections to Document Disclosure
Addressing the chairmen's request for internal documents reflecting NLRB discussions and consideration of the
case, and supporting documents and research, Mattina described several concerns.
Stating that NLRB litigation files typically contain affidavits taken from witnesses who have been promised
confidentiality, Mattina also said the files contain the privileged work product of our attorneys and road maps'
of our litigation plans and preparations.
In NLRB v. Robbins Tire & Rubber Co., 437 U.S. 214, 98 LRRM 2617 (1978), the U.S. Supreme Court
upheld NLRB's policy of withholding witness affidavits in open cases from disclosures made under the
Freedom of Information Act, and Mattina said the high court recognized the importance of protecting the
NLRB's assurances of confidentiality.
The House chairmen also asked Solomon to produce all documents and communications that support the
NLRB's position that work is being transferred' in this case, as well as past precedent that would support a
finding Boeing violated the NLRA.
Mattina said that we are not in a position to address the issues to be litigated in the public hearing outside
the context of that hearing. Stating that the information Kline and Roe requested goes to the crux of those
issues, Mattina said that the acting general counsel has already disclosed the basic facts and legal theory in
the complaint against Boeing as well as in press releases and a fact sheet posted on NLRB's website.
NLRB-FOIA-00005707
3
Once the hearing commences, Mattina said, NLRB could provide the House committee with copies of the
transcript and exhibits and post-hearing briefs of the parties.
Mattina concluded that NLRB representatives would be pleased to meet with Kline and Roe to discuss how
we might accommodate further information needs that you may have, consistent with our need to protect the
integrity of our legal processes.
Kline, Roe Call Response Insufficient.'
In the joint statement by the committee leaders, Kline said, While this insufficient response is not entirely
unexpected from today's board, it is still extremely disappointing. Stating that there are legitimate questions
over public statements made by NLRB officials and the timing of its complaint, the House committee
chairman said that [t]he American people deserve a full explanation and Congress has a right to a complete
response.
Roe said that NLRB's troubling allegations against Boeing warrant further investigation, and said that the
extreme remedy sought by the acting general counsel will have a detrimental effect on local economies and a
chilling effect on the American workforce. Stating that he is very concerned about NLRB action in the
Boeing case, Roe said he will be exploring these allegations further.
Kline charged that [f]or more than two years, the Obama board has pursued an activist agenda that champions
the interests of Big Labor over the interests of all American workers.
Republicans have pledged to make job creation a leading priority, Kline said, and our oversight of the NLRB
will remain an important part of that effort.
NLRB-FOIA-00005708
1
Microsoft Outlook
Cc: Abruzzo, Jennifer
FYI, the ALJ quashed the subpoena served on us!
Good news from today is the ALJ quashed Boeings subpoena to
us. Yea!
Cheers,
rich
Rich,
but would
e mail.
hope
Keep in touch,
Celeste
E.6 Privacy
E.6 Privacy
NLRB-FOIA-00005709
2
stoppages.
will disappear.
NLRB-FOIA-00005710
3
America.
NLRB-FOIA-00005711
1
Microsoft Outlook
Sent: Tuesday, January 11, 2011 1:23 PM
To: Contee, Ernestine R.; Kearney, Barry J.; Farrell, Ellen; Sophir, Jayme; Szapiro, Miriam; Katz,
Judy; Omberg, Bob; Ahearn, Richard L.
Subject: FW: IAM meeting with AGC, Jan. 19
From: Jude Bryan [mailto:bryan@workerlaw.com]
Sent: Tuesday, January 11, 2011 11:54 AM
To: Willen, Debra L
Cc: David Campbell
Subject: IAM meeting with AGC
Ms. Willen,
In response to your email to Dave Campbell, the following people will be attending the meeting with AGC Lafe Solomon
next week.
Richard P. Michalski, General Vice President, IAMAW
Christopher Corson, General Counsel, IAMAW
Neil Gladstein, Director Strategic Resources, IAMAW
Mark Blondin, IAM Aerospace Coordinator
Tom Wroblewski, President, IAM District Lodge 751
David Campbell, Attorney
Carson Glickman-Flora, Attorney
Jude Bryan, Paralegal
Please let us know if there is any more information you need.
Sincerely,
Schwerin Campbell Barnard Iglitzin & Lavitt LLP
18 West Mercer Street, Ste. 400
Seattle, WA 98119
206-285-2828
NLRB-FOIA-00005712
1
Microsoft Outlook
From: Omberg, Bob
To: Sokolow, Steven L.
Cc: Katz, Judy
Subject: case status sheet
Attachments: casestatussheet.doc
Non-Responsive
NLRB-FOIA-00005713
TO: Barry J. Kearney January 18, 2011
Associate General Counsel
Ellen A. Farrell
Deputy Associate General Counsel
Judith I. Katz
Assistant General Counsel
FROM: Steven L. Sokolow
Robert E. Omberg
Deputy Assistant General Counsels
SUBJECT: Status of Pending Section 10(j)/10(l) Injunction,
Litigation Advice and Contempt Cases and Special Projects
Non-Responsive
NLRB-FOIA-00005714
- 2 -
6. Boeing
19-CA-32431
(relocation of unit work)
9/1 Willen/
Omberg
(def 9/1-
Defer to RAB for merits
(Willen/Szapiro); GC agenda
10/18; ER coming in 11/10 2:30 to
Advice, 12/15 10:00 to GC; draft to
REO 10/28 [subject to revision];
BJK meeting 12/14; Union to come
in 1/19
Non-Responsive
Non-Responsive
NLRB-FOIA-00005715
- 3 -
Non-Responsive
NLRB-FOIA-00005716
- 4 -
NLRB-FOIA-00005717
- 5 -
Non-Responsive
NLRB-FOIA-00005718
- 6 -
Willen
Boeing (Omberg)
Non-Responsive
Non-Responsive
Non-Responsive
NLRB-FOIA-00005719
- 7 -
Miscellaneous
Case Name and Number Status
1. Boeing
19-CA-32431
(relocation of unit work)
In 9/1; defer to RAb for merits (Willen/Szapiro); GC
agenda 10/18; ER coming in 12/15 to see GC; U
coming in 1/19
Non-Responsive
Non-Responsive
NLRB-FOIA-00005720
- 8 -
Non-Responsive
NLRB-FOIA-00005721
- 9 -
Non-Responsive
NLRB-FOIA-00005722
- 10 -
Non-Responsive
NLRB-FOIA-00005723
- 11 -
Non-Responsive
NLRB-FOIA-00005724
- 12 -
Non-Responsive
NLRB-FOIA-00005725
- 13 -
Non-Responsive
NLRB-FOIA-00005726
- 14 -
Non-Responsive
NLRB-FOIA-00005727
- 15 -
Non-Responsive
NLRB-FOIA-00005728
- 16 -
Non-Responsive
NLRB-FOIA-00005729
- 17 -
cc: Celeste Mattina, Acting Deputy General Counsel
Non-Responsive
Non-Responsive
NLRB-FOIA-00005730
1
Microsoft Outlook
From: Baniszewski, Joseph
Sent: Friday, February 18, 2011 9:32 AM
To: Moskowitz, Eric G.
Subject: IAM lawsuit against South Carolina
Eric,
As I mentioned yesterday, this is a link to the suit that the IAM filed against the Governor
of South Carolina. I'll keep you informed, too, about the status of the unfair labor
practice charge against Boeing regarding the construction of the 787 assembly facility in
Charleston SC.
Joe
http://op.bna.com/dlrcases.nsf/id/czon-8dbths/$File/haley.pdf
Non-Responsive
NLRB-FOIA-00005731
Non-Responsive
NLRB-FOIA-00005732
Non-Responsive
NLRB-FOIA-00005733
Non-Responsive
NLRB-FOIA-00005734
Non-Responsive
NLRB-FOIA-00005735
Non-Responsive
NLRB-FOIA-00005736
Non-Responsive
NLRB-FOIA-00005737
Non-Responsive
NLRB-FOIA-00005738
Non-Responsive
NLRB-FOIA-00005739
Non-Responsive
NLRB-FOIA-00005740
Non-Responsive
NLRB-FOIA-00005741
Non-Responsive
NLRB-FOIA-00005742
Non-Responsive
NLRB-FOIA-00005743
Non-Responsive
NLRB-FOIA-00005744
Non-Responsive
NLRB-FOIA-00005745
Non-Responsive
NLRB-FOIA-00005746
Non-Responsive
NLRB-FOIA-00005747
1
Microsoft Outlook
Eric,
Charleston SC.
Joe
Non-Responsive
NLRB-FOIA-00005748
1
Microsoft Outlook
Eric,
Charleston SC.
Joe
Non-Responsive
NLRB-FOIA-00005749
1
Microsoft Outlook
Subject: FYI
NLRB-FOIA-00005750
1
Microsoft Outlook
Subject: Fw: seattletimes.com: Boeing will build next 787's first horizontal tails in Seattle
--------------------------
From:
Sent: Wed May 25 07:42:42 2011
----------------------------------------------------------------------
======================================================================
for information.
======================================================================
E.6 Privacy
E.6 Privacy
NLRB-FOIA-00005751
IAMAW and IAM District 751
Unfair Labor Practice Complaint
Against The Boeing Company Against The Boeing Company
NLRB-FOIA-00005752
Boeing Facilities with Machinist Workers
NLRB-FOIA-00005753
May An Employer Protected By A
Long-Term, No-Strike Clause Place
Work Which Would Otherwise Be
Performed By Union Members At A Performed By Union Members At A
Non-Union Location Because of Its
Unionized Members Past, And
Possible Future, Lawful Strikes?
NLRB-FOIA-00005754
It is undisputed that after the 2008 strike, Boeing
officials made the following statements:
Boeings Commercial Airplanes CEO authorized
a public statement criticizing the Everett plant of a public statement criticizing the Everett plant of
becoming a strike zone, and a statement that
labor unrest might drive Boeing out of the
Puget Sound.
(October 2008)
NLRB-FOIA-00005755
Boeing CEO Jim McNerney told U.S.
Senator Patty Murray (WA) that Boeing was
sick and tired of the Unions history of
strikes and was looking elsewhere to put
the second 787 Dreamliner assembly line.
(February 2009)
NLRB-FOIA-00005756
Representative Jay Inslee (WA) that one
of the principal reasons [Washington
state] even ended up in a competition
[for the 787 second line was] the work
stoppage issues.
(March 2009)
NLRB-FOIA-00005757
Representative Norm Dicks (WA) we need
to get a solution to this (strike) problem. We
cant live with this.
(March 2009)
NLRB-FOIA-00005758
Washingtons Governors office confirmed that
Boeing told it the same: We know what the
[Boeing] company has said publiclythat
the work stoppages are the biggest
challenge [to the second line staying in
Washington state] and we take them at Washington state] and we take them at
their word.
(March 2009)
NLRB-FOIA-00005759
Boeing CEO McNerney addressed concerns about
duplication in an investors conference call:
And there would be some duplication [with a second line in
South Carolina]. We would obviously work to minimize that.
But I think having said all of that, diversifying our labor pool
and labor relationship has some benefits. I think the union
and the company have had trouble figuring it out between and the company have had trouble figuring it out between
themselves over the last few contract discussions and I've
got to figure out a way to reduce that risk to the company.
And so some of the modest inefficiencies, for example,
associated with the move to Charleston, are certainly
more than overcome by strikes happening every three or
four years in Puget Sound.
(October 21, 2009)
NLRB-FOIA-00005760
March 1, 2010 Boeing BCA CEO Jim Albaugh
Seattle Times Interview
NLRB-FOIA-00005761
Boeing CEO Jim Albaugh explained the
Companys decision to move the second 787
line to South Carolina:
"The overriding factor was not the business
climate [in Washington]. And it was not the climate [in Washington]. And it was not the
wages we are paying today. It was that we
can't afford to have a work stoppage every
three years. And we can't afford to continue
the rate of escalation of wages."
(March 2010)
NLRB-FOIA-00005762
Boeings unlawful act, if unchecked, will inevitably
discourage workers from engaging in protected activity
Exemption 6
NLRB-FOIA-00005763
Lost Jobs Not If But When
When Boeing Gets Past Delays And Final
Assembly Lines Are Established It Is Undisputed
That Three 787s Per Month Will Be Assembled In
South Carolina
South Carolina Work Represents Hundreds Of Final
Assembly Jobs Which But For IAM Strikes Would
Be Performed By Unionized Workers
NLRB-FOIA-00005764
Lost Jobs And Experience
Each Job Lost Represents
Lost Pay And Benefits For A Current, New Or
Upgraded Union Employee
Loss Of The Job Security Gained By Working In
Newest Program With The Longest Future
Loss Of Experience In Composites The Future
Of Boeing Aircraft
The Job Security of Unionized Workers in the Puget
Sound Is Based On Total Unit Jobs
NLRB-FOIA-00005765
Impact On Current Employees
2,900 IAM Workers Currently On the 787
About 60% (1740) Perform Out-of-
Sequence Assembly on 787s
NLRB-FOIA-00005766
Exemption 4
NLRB-FOIA-00005767
The Surge Line
The Surge Line Is Operating Today
Space In 24 Building For Surge Line Is Already
Being Used For Out-of-Sequence 787 Assembly
Line Work Line Work
Three Fourths Of The Final Assembly Work Can Be
Performed On The Surge Line Now
A Major Tool Is Needed Both Here And In South
Carolina To Do Other 25% Of Final Assembly
NLRB-FOIA-00005768
In an October 28, 2009, press release, Boeing
stated:
Until the second 787 assembly line is brought on
line in North Charleston, Boeing will establish
transitional surge capabilityWhen the second line transitional surge capabilityWhen the second line
in Charleston is up and operating, the surge
capability in Everett will be phased out.
Boeing Press Release entitled: Boeing to Place
Second 787 Assembly Line in North Charleston,
SC
NLRB-FOIA-00005769
Loss of Jobs
When the 787 Assembly Line Is Functioning Properly, There
Will No Longer Be Jobs For Every Worker on the line.
787 assembly jobs in the Puget Sound will drop back to
Boeings originally projected levels, resulting in job losses.
Workers on the Surge Line will lose their jobs when it ends. Workers on the Surge Line will lose their jobs when it ends.
CAT C Green-Lighted employees will not have jobs to
transfer into, resulting in lost pay and opportunities
Pursuant to the CBA, Junior Employees Will Be Laid Off Or
Downgraded When The Re-working and Surge Line ends.
Any Promise By Boeing To The Contrary Is Empty
NLRB-FOIA-00005770
Exemption 4
NLRB-FOIA-00005771
Boeings Unlawfully Motivated Decision To Move
The Second 787 Assembly Line Economically
Harms Union Workers in the Puget Sound
Exemption 6
NLRB-FOIA-00005772
Boeing Commercial President Jim Albaugh is on
record saying he wants to build the 737 replacement
airplane right here in Puget Sound, but he added a
significant caveat: It depends on labor. significant caveat: It depends on labor.
Leeham News and Comment
Intelligence for the Aviation Industry
May 5, 2010
NLRB-FOIA-00005773
Boeings unlawful act, if unchecked, puts all
union work in the Puget Sound at risk
Exemption 6
NLRB-FOIA-00005774
Whats Next?
The Company Rhetoric Has Already Begun
Placement Of Future Models Depends On The Union
6,000 IAM Employees Work On 737
Next Time Boeing Wont Have To Say The Next
Airplane Model Is Moving To South Carolina Because
Of Strikes Everyone Will Already Know
This Case Presents The Sole Opportunity To
Remedy Boeings Unlawful Conduct
NLRB-FOIA-00005775
If A Complaint Does Not Issue
Union Members Will Correctly Understand That Boeing
May Permanently Take Away Their Jobs If They Strike
Workers Will Believe That Long After A Strike Is Over And
The Contract Settled Boeing Will, In Retaliation, Take The The Contract Settled Boeing Will, In Retaliation, Take The
Lifeblood Of Their Job Security Working on The Newest
Evolving Model
A New Standard for Corporate Behavior Will Be Set
NLRB-FOIA-00005776
If A Complaint Does Not Issue
Any Reasonable Worker Will Think Twice Before Engaging In
Concerted Activity
Every NLRB Representation Case Will Be Tainted
All Boeing Employees Heard The Companys Brazen
Announcement That It Moved The Work To Avoid Union
Activity Activity
They All Know Boeing Awarded SC The Work Six Weeks
After Boeing Encouraged Workers to Decertify The Union
Press In Seattle And South Carolina Touted The Decert Vote
As The Key To The Decision To Relocate
Could Any Election Escape The Taint Of Boeings Threat To
Grow Its Non-Union Programs And Starve Those Who
Strike?
NLRB-FOIA-00005777
Who Should Bear The Burden?
Boeing Has Existing Capacity, Currently Employed
Experienced Personnel And A Plan To Assemble At Least
Three Additional 787s In Everett On The Surge Line.
No Additional Capital Is Required
No Financial Jeopardy
Less Than 5% Of Commercial Assembly
Boeings Only Cost Would Be To Support An Empty
Building in South Carolina, a Building That is Empty Today
Boeing Accepted Legal Hazard By
Brazenly Announcing It Antiunion Motive
Constructing Its Building At An Accelerated Pace
Knowing This Case Was Pending
NLRB-FOIA-00005778
Boeing Commercial Airplane CEO Jim Albaugh
NLRB-FOIA-00005779
UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
REGION 19
THE BOEING COMPANY
and Case 19-CA-32431
INTERNATIONAL ASSOCIATION OF
MACHINISTS AND AEROSPACE WORKERS
DISTRICT LODGE 751, affiliated with
INTERNATIONAL ASSOCIATION OF
MACHINISTS AND AEROSPACE WORKERS
COMPLAINT AND NOTICE OF HEARING
International Association of Machinists and Aerospace Workers District
Lodge No. 751 (Local 751 or the Union), affiliated with International Association of
Machinists and Aerospace Workers (IAM), has charged in Case 19-CA-32431 that
The Boeing Company (Respondent or Boeing), has been engaging in unfair labor
practices as set forth in the National Labor Relations Act (the Act), 29 U.S.C. 151 et
seq.
Based thereon, the Acting General Counsel of the National Labor
Relations Board (the Board), by the undersigned, pursuant to 10(b) of the Act and
102.15 of the Board's Rules and Regulations, issues this Complaint and Notice of
Hearing and alleges as follows:
1.
The Charge was filed by the Union on March 26, 2010, and was served on
Respondent by regular mail on or about March 29, 2010.
NLRB-FOIA-00005780
- 2 -
2.
(a) Respondent, a State of Delaware corporation with its headquarters
in Chicago, Illinois, manufactures and produces military and commercial aircraft at
various facilities throughout the United States, including in Everett, Washington (the
facility), and others in the Seattle, Washington, and Portland, Oregon, metropolitan
areas.
(b) Respondent, during the past twelve months, which period is
representative of all material times, in conducting its business operations described
above in paragraph 2(a), derived gross revenues in excess of $500,000.
(c) Respondent, during the past twelve months, which period is
representative of all material times, in conducting its business operations described
above in paragraph 2(a), both sold and shipped from, and purchased and received at,
the facility goods valued in excess of $50,000 directly to and from points outside the
State of Washington.
(d) Respondent has been at all material times an employer engaged in
commerce within the meaning of 2(2), (6) and (7) of the Act.
3.
The Union is, and has been at all material times, a labor organization
within the meaning of 2(5) of the Act.
4.
At all material times the following individuals held the positions set forth
opposite their respective names and have been supervisors within the meaning of
NLRB-FOIA-00005781
- 3 -
2(11) of the Act, and/or agents within the meaning of 2(13) of the Act, acting on
behalf of Respondent:
Jim Albaugh Executive Vice President, Boeing; President
and CEO of Integrated Defense Systems (until
late August 2009); CEO, Boeing Commercial
Airplanes (as of late August 2009)
Scott Carson Executive Vice President, Boeing; CEO, Boeing
Commercial Airplanes (until late August 2009)
Ray Conner Vice President and General Manager of Supply
Chain Management and Operations, Boeing
Commercial Airplanes
Scott Fancher Vice President and General Manager of the 787
Program
Fred Kiga Vice President, Government and Community
Relations
Doug Kight Vice President, Human Resources, Boeing
Jim McNerney President, Chairman, and CEO
Jim Proulx Boeing spokesman
Pat Shanahan Vice President and General Manager of
Airplane Programs
Gene Woloshyn Vice President, Employee Relations
5.
(a) Those employees of Respondent enumerated in Section 1.1(a) of
the collective bargaining agreement described below in paragraph 5(c), including, inter
alia, all production and maintenance employees in Washington State, constitute a unit
appropriate for the purposes of collective bargaining within the meaning of 9(b) of the
Act (the Puget Sound Unit).
(b) Those employees of Respondent enumerated in Section 1.1(c) of
the collective bargaining agreement described below in paragraph 5(c), including, inter
NLRB-FOIA-00005782
- 4 -
alia, all production and maintenance employees in the Portland, Oregon area, constitute
a unit appropriate for the purposes of collective bargaining within the meaning of 9(b)
of the Act (the Portland Unit).
(c) Since at least 1975 and at all material times, the IAM has been the
designated exclusive collective bargaining representative of the Puget Sound Unit and
the Portland Unit (collectively, the Unit) and recognized as such representative by
Respondent. This recognition has been embodied in successive collective-bargaining
agreements, the most recent of which is effective from November 2, 2008, to
September 8, 2012.
(d) Since 1975, during the course of the parties collective-bargaining
relationship, the IAM engaged in strikes in 1977, 1989, 1995, 2005, and 2008.
6.
On or about the dates and by the manner noted below, Respondent made
coercive statements to its employees that it would remove or had removed work from
the Unit because employees had struck and Respondent threatened or impliedly
threatened that the Unit would lose additional work in the event of future strikes:
(a) October 21, 2009, by McNerney in a quarterly earnings conference
call that was posted on Boeings intranet website for all employees and reported in the
Seattle Post Intelligencer Aerospace News and quoted in the Seattle Times, made an
extended statement regarding diversifying [Respondents] labor pool and labor
relationship, and moving the 787 Dreamliner work to South Carolina due to strikes
happening every three to four years in Puget Sound.
NLRB-FOIA-00005783
- 5 -
(b) October 28, 2009, based on its October 28, 2009, memorandum
entitled 787 Second Line, Questions and Answers for Managers, informed employees,
among other things, that its decision to locate the second 787 Dreamliner line in South
Carolina was made in order to reduce Respondents vulnerability to delivery disruptions
caused by work stoppages.
(c) December 7, 2009, by Conner and Proulx in an article appearing in
the Seattle Times, attributed Respondents 787 Dreamliner production decision to use a
dual-sourcing system and to contract with separate suppliers for the South Carolina
line to past Unit strikes.
(d) December 8, 2009, by Conner in an article appearing in the Puget
Sound Business Journal, attributed Respondents 787 Dreamliner production decision
to use a dual-sourcing system and to contract with separate suppliers for the South
Carolina line to past Unit strikes.
(e) March 2, 2010, by Albaugh in a video-taped interview with a Seattle
Times reporter, stated that Respondent decided to locate its 787 Dreamliner second line
in South Carolina because of past Unit strikes, and threatened the loss of future Unit
work opportunities because of such strikes.
7.
(a) In or about October 2009, on a date better known to Respondent,
but no later than October 28, 2009, Respondent decided to transfer its second 787
Dreamliner production line of 3 planes per month from the Unit to its non-union site in
North Charleston, South Carolina.
NLRB-FOIA-00005784
- 6 -
(b) Respondent engaged in the conduct described above in paragraph
7(a) because the Unit employees assisted and/or supported the Union by, inter alia,
engaging in the protected, concerted activity of lawful strikes and to discourage these
and/or other employees from engaging in these or other union and/or protected,
concerted activities.
(c) Respondents conduct described above in paragraph 7(a),
combined with the conduct described above in paragraph 6, is also inherently
destructive of the rights guaranteed employees by 7 of the Act.
8.
(a) In or about October 2009, on a date better known to Respondent,
but no later than December 3, 2009, Respondent decided to transfer a sourcing supply
program for its 787 Dreamliner production line from the Unit to its non-union facility in
North Charleston, South Carolina, or to subcontractors.
(b) Respondent engaged in the conduct described above in paragraph
8(a) because the Unit employees assisted and/or supported the Union by, inter alia,
engaging in the protected, concerted activity of lawful strikes and to discourage these
and/or other employees from engaging in these or other union and/or protected,
concerted activities.
(c) Respondents conduct described above in paragraph 8(a),
combined with the conduct described above in paragraphs 6 and 7(a), is also inherently
destructive of the rights guaranteed employees by 7 of the Act.
NLRB-FOIA-00005785
- 7 -
9.
By the conduct described above in paragraph 6, Respondent has been
interfering with, restraining, and coercing employees in the exercise of the rights
guaranteed in 7 of the Act in violation of 8(a)(1) of the Act.
10.
By the conduct described above in paragraphs 7 and 8, Respondent has
been discriminating in regard to the hire or tenure or terms or conditions of employment
of its employees, thereby discouraging membership in a labor organization in violation
of 8(a)(3) and (1) of the Act.
11.
By the conduct described above in paragraphs 6 through 10, Respondent
has engaged in unfair labor practices affecting commerce within the meaning of 2(6)
and (7) of the Act.
12.
As part of the remedy for the unfair labor practices alleged herein, the
Acting General Counsel seeks an Order requiring either that one of the high level
officials of Respondent alleged to have committed the violations enumerated above in
paragraph 6 read, or that a designated Board agent read in the presence of a high level
Boeing official, any notice that issues in this matter, and requiring Respondent to
broadcast such reading on Respondents intranet to all employees.
13.
(a) As part of the remedy for the unfair labor practices alleged above in
paragraphs 7 and 8, the Acting General Counsel seeks an Order requiring Respondent
NLRB-FOIA-00005786
- 8 -
to have the Unit operate its second line of 787 Dreamliner aircraft assembly production
in the State of Washington, utilizing supply lines maintained by the Unit in the Seattle,
Washington, and Portland, Oregon, area facilities.
(b) Other than as set forth in paragraph 13(a) above, the relief
requested by the Acting General Counsel does not seek to prohibit Respondent from
making non-discriminatory decisions with respect to where work will be performed,
including non-discriminatory decisions with respect to work at its North Charleston,
South Carolina, facility.
ANSWER REQUIREMENT
Respondent is notified that, pursuant to 102.20 and 102.21 of the
Boards Rules and Regulations, it must file an answer to this Complaint. The answer
must be received by this office on or before May 4, 2011, or postmarked on or
before May 3, 2011. Unless filed electronically in a pdf format, Respondent should file
an original and four copies of the answer with this office and serve a copy of the answer
on each of the other parties.
An answer may also be filed electronically by using the E-Filing system on
the Agencys website. In order to file an answer electronically, access the Agencys
website at www.nlrb.gov, click on File Case Documents, enter the NLRB Case
Number, and follow the detailed instructions. The responsibility for the receipt and
usability of the answer rests exclusively upon the sender. Unless notification on the
Agencys website informs users that the Agencys E-Filing system is officially
determined to be in technical failure because it is unable to receive documents for a
continuous period of more than 2 hours after 12:00 noon (Eastern Time) on the due
NLRB-FOIA-00005787
- 9 -
date for filing, a failure to timely file the answer will not be excused on the basis that the
transmission could not be accomplished because the Agencys website was off-line or
unavailable for some other reason. The Boards Rules and Regulations require that an
answer be signed by counsel or non-attorney representative for represented parties or
by the party if not represented. See 102.21. If the answer being filed electronically is
a pdf document containing the required signature, no paper copies of the document
need to be transmitted to the Regional Office. However, if the electronic version of an
answer to a complaint is not a pdf file containing the required signature, then the E-filing
rules require that such answer containing the required signature be submitted to the
Regional Office by traditional means within three (3) business days after the date of
electronic filing.
Service of the answer on each of the other parties must be accomplished
in conformance with the requirements of 102.114 of the Boards Rules and
Regulations. The answer may not be filed by facsimile transmission. If no answer is
filed or if an answer is filed untimely, the Board may find, pursuant to Motion for Default
Judgment, that the allegations in this Complaint are true.
NOTICE OF HEARING
PLEASE TAKE NOTICE THAT on the 14
th
day of June, 2011, at 9:00
a.m., in James C. Sand Hearing Room, 2966 Jackson Federal Building, 915
Second Avenue, Seattle, Washington, and on consecutive days thereafter until
concluded, a hearing will be conducted before an Administrative Law Judge of the
National Labor Relations Board. At the hearing, Respondent and any other party to this
proceeding have the right to appear and present testimony regarding the allegations in
NLRB-FOIA-00005788
- 10 -
this complaint. The procedures to be followed at the hearing are described in the
attached Form NLRB-4668. The procedure to request a postponement of the hearing is
described in the attached Form NLRB-4338.
DATED at Seattle, Washington, this 20
th
day of April, 2011.
___________________________________
Richard L. Ahearn, Regional Director
National Labor Relations Board, Region 19
2948 Jackson Federal Building
915 Second Avenue
NLRB-FOIA-00005789
The Boeing Company
2009 Annual Report
NLRB-FOIA-00005790
At Boeing, we aspire to be the
strongest, best and best-integrated
aerospace-based company in the
world for today and tomorrow.
The Boeing Company
Boeing is the worlds largest aerospace
company and leading manufacturer of
commercial airplanes and defense, space
and security systems. A top U.S. exporter,
the company supports airlines and U.S.
and allied government customers in more
than 90 countries. Our products and
tailored services include commercial and
military aircraft, satellites, weapons,
electronic and defense systems, launch
systems, advanced information and
communication systems, and performance-
based logistics and training. With corporate
of ces in Chicago, Boeing employs more
than 157,000 people across the United
States and in 70 countries. Our leadership
is strengthened further by hundreds of
thousands of people who work for Boeing
suppliers worldwide.
Contents
1 Operational Summary
2 Message From Our Chairman
7 The Executive Council
8 Financial Results
9 Form 1 0-K
1 39 Selected Programs, Products
and Services
1 46 Board of Directors
1 46 Company Of cers
1 47 Shareholder Information
NLRB-FOIA-00005791
1
Delivered record revenue of $68.3
billion up 12 percent from 2008 on
higher commercial deliveries and growth
in our defense, space and security
business.
Earned $1.87 per share, down from
$3.65 a share, due principally to the
reclassi cation of certain 787 costs, the
impact of dif cult market conditions and
increased development costs for the
747-8 program.
Maintained a total backlog of
$316 billion more than four times
current annual revenue.
Generated strong operating cash ow
of $5.6 billion for the year, re ecting
disciplined operational and working
capital management across Boeing.
Delivered 481 commercial airplanes,
including the most-ever 737 and 777
deliveries in a given year, and captured
263 gross orders.
Delivered 121 production military
aircraft and six satellites.
Captured new Boeing Defense, Space
& Security business, including an Intelsat
satellite contract; key proprietary and
services contracts; and international
sales of eight P-8I long-range maritime
reconnaissance and anti-submarine
warfare aircraft to India, 15 Chinooks to
Canada and 16 to Italy, and six C-17s to
the United Arab Emirates.
Operational Summary Operational Summary
Achieved critical Boeing Commercial
Airplanes milestones with rst ight of the
787 Dreamliner, delivery of the rst 777
Freighter, delivery of the 6,000th 737 and
breaking ground on a 787 nal assembly
facility in North Charleston, South Carolina.
Met key Defense, Space & Security
milestones, including approval of full-rate
production for the EA-18G, rst ight of
the P-8A Poseidon, delivery of the rst of
24 F/A-18F Super Hornets for the Royal
Australian Air Force, approval of low-
rate production for Increment One of the
Brigade Combat Team Modernization
program (formerly Future Combat Systems)
and 100-percent mission success on
21 space shuttle and satellite launches.
Extended our environmental leadership
in many areas, including conducting
sustainable biofuel demonstration ights;
earning recognition from the investor-led
Carbon Disclosure Project as the top-
performing industrial company in climate-
change disclosure; receiving Smart Grid
grants from the U.S. Department of
Energy; and piloting programs to deliver
military and commercial airplanes painted
with chrome-free primer.
2009 2008 2007 2006 2005
Revenues 68,281 60,909 66,387 61,530 53,621
Net earnings 1,312 2,672 4,074 2,21 5 2,572
Earnings per share* 1.87 3.65 5.26 2.84 3.19
Operating margins 3.1% 6.5% 8.8% 4.9% 5.2%
Contractual backlog 296,500 323,860 296,964 21 6,563 1 60,637
Total backlog
315,558 351 ,926 327,137 250,21 1 205,21 5

2009 Financial Highlights U.S. dollars in millions except per share data
* Represents diluted earnings per share from continuing operations
Total backlog includes contractual and unobligated backlog. See page 20 of the 10-K.
NLRB-FOIA-00005792
2
W. James McNerney, Jr.
Chairman, President and Chief Executive Of cer
Message From Our Chairman
NLRB-FOIA-00005793
3
In the end, it was a year of notable
achievement, culminating with the historic
rst ight of the breakthrough 787 Dream-
liner. Through the tireless determination
of employees who proudly serve our cus-
tomers every day, I believe weve turned
momentum in our favor for addressing the
challenges that still lie ahead.
2009 Review
During the year, we confronted unprec-
edented market environments. The global
recession and record-setting declines
in passenger and cargo air traf c drove
Boeing Commercial Airplanes orders
down, softened its services revenues and
slowed wide-body airplane production
rates. Boeing Defense, Space & Security
(formerly Integrated Defense Systems)
was challenged by the changing priorities
of the U.S. Department of Defense and
other agencies as they addressed their
own budget pressures; we felt the impact
most in our Army modernization and mis-
sile defense programs.
Despite these stresses, and not-
withstanding our development-program
challenges, our core operating perfor-
mance was strong:
We booked record revenues; retained a
large, diverse total backlog (which stood
at $316 billion at year end); and main-
tained strong liquidity and cash ows.
Our services businesses and the vast
majority of our production programs
including the 737, 777 and our portfolio
of military aircraft generated solid
pro t margins.
We delivered 481 commercial
airplanes including the most-ever 737s
and 777s in a given year along with
121 military aircraft and six satellites.
Boeing Capital, our nancing arm, suc-
cessfully engaged third-party nanciers to
support our customers deliveries, while
generating solid pre-tax earnings, reducing
its portfolio and returning cash dividends
to the company.
We made important progress on
several development programs in
delivering the rst 777 freighters, winning
full-rate production approval for the
EA-18G electronic-warfare aircraft, ying
the rst 737-based P-8A maritime patrol
aircraft and performing well on the
Brigade Combat Team Modernization
program (formerly Future Combat
Systems). However, a reclassi cation of
costs on the 787 program and higher
costs on the 747-8 (due in part to dif cult
market conditions) signi cantly affected
our overall nancial results. By years end,
however, our team had made substantial
progress on these programs, too. Both
airplanes are now in ight testing and are
steadily reducing risk as they move
through the certi cation process.
Preparing for an Eventual Rebound
With two tough years behind us, and our
nancial strength and competitive strate-
gies intact, we enter 2010 with growing
con dence about the future. Yet we are
acutely aware that this is no time for com-
placency. We must execute exceptionally
well, support our customers better every
day and preserve our nancial position in
a tenuous economy. Our basic challenge
is to balance the nancial with the strate-
gic; it is to produce the short-term results
that will enable us to pursue long-term
growth objectives.
Although the global economy shows
signs of improvement, we believe it will
take some time for economic indicators
to rebound signi cantly. Fortunately, our
discipline in setting commercial airplane
production rates and diversifying our
customer base during the recent up-cycle
is paying off. We ended 2009 with
Commercial Airplanes backlog holding
strong at more than 3,300 rm orders
valued at $250 billion. We believe the
strength of this backlog is suf cient to
keep our production lines full until an ex-
pected recovery in order activity in 2012.
The commercial airplane market remains
a substantial long-term growth opportu-
nity, and we are strongly positioned for
the eventual rebound.
At the same time, we anticipate a
continued attening and reprioritization of
U.S. defense budgets, given the size of
the federal de cit and spending increases
in other areas. Defense markets outside
the U.S. are expanding, however, as
more countries are making market- and
technology-based decisions on defense
and security products. That has created
To the Shareholders and Employees of
The Boeing Company: Breakthrough innovation
is what we do. But it is seldom easy. Add global
economic turbulence to the mix, and the chal-
lenges of 2009 were among the biggest in our
94-year history.
NLRB-FOIA-00005794
4
Commercial Airplane Deliveries
20052009
05
06
07
08
09
290
398
441
375
481
Total Backlog*
($ in billions)
05
06
07
08
09
205.2
250.2
327.1
351.9
315.6
*Total backlog includes contractual and un-
obligated backlog. See page 20 of the 10-K.
As we begin 2010,
our fundamental
product-and-
services strategy
and competitive-
ness remain intact,
as reected in our
year-end backlog
of $316 billion.
For 2009, we
delivered 481 com-
mercial airplanes
(including the
most-ever 737 and
777 deliveries in
a given year), our
6,000th 737 and our
rst 777 Freighter.
huge opportunities for Boeing. International
sales have grown from just 7 percent
of total defense revenues in 2004 to 15
percent in 2009. Over the next ve years,
we expect international sales to increase
to as much as a quarter of defense and
security revenues.
Given these market conditions and our
commitments to our customers, we have
set clear priorities for 2010 and beyond:
Deliveron OurDevelopment Programs
Our top priority is to deliver on the incred-
ible promise of our major development
programs, starting with the 787 Dreamliner,
which accounts for nearly 40 percent of
our contracted backlog.
Made mostly with composites rather
than metals, the 787 is the most impor-
tant new airplane since the Boeing 707
at the dawn of the Jet Age, half a century
ago. The Boeing 787 marks a major
advance in fuel ef ciency. It will soon
become known as the worlds most com-
fortable passenger jet with the lightest
environmental footprint in its class. It will
connect scores of new city-pairs around
the globe and change the way airplanes
are made through the rest of this century.
While we have clearly experienced
unforeseen dif culties in this program,
including last years delayed rst ight, the
787 remains the best-selling new airplane
in history, with approximately 850 orders
from 56 customers around the world.
The innovation brought to life in the
787 should separate us from our com-
petitors for many years to come and in
ways that reach beyond the 787 itself. We
already have applied key elements of that
innovation to the 747-8, which entered
ight testing in February 2010. With 108
total orders on the books, including 76 for
the freighter version and a second major
passenger-airline order secured at the
end of 2009, the outlook for this airplane
and its unmatched ef ciency remains
solid despite temporary weakness in the
demand for very large airplanes.
As testing of both airplanes contin-
ues, their production ramp-ups are also
progressing. We plan to deliver our rst
787 and 747-8 Freighter late this year,
and our rst passenger variant of the
747-8 in the fourth quarter of 2011.
Even as our Commercial Airplanes
production programs continue to per-
form well, improving our performance
on development programs remains an
intense focus. We have incorporated les-
sons learned from our setbacks and are
strengthening ourselves where we need
to do so particularly in our program-
management and engineering organiza-
tions, processes and leadership.
We have also taken steps to reduce
risk in our supply chain. We have
brought certain work back inside Boeing,
and we have increased visibility and co-
ordination across all suppliers with new
information technology tools. Through
the purchase of Vought and Global
Aeronautica facilities in North Charleston,
South Carolina, and the establishment of
a 787 nal assembly facility there, we will
also improve our long-term competitive-
ness and reduce the risk of production
interruptions for our customers.
Accelerate the Repositioning
of OurDefense Business
No other company possesses a more
complete range of technical capabilities in
defense, space and security than Boeing.
Over the years, this side of our busi-
ness has consistently delivered strong
operating performance and had great
success in capturing new and follow-on
contracts. Through a series of acquisi-
tions over the past two years, we have
been reshaping our capabilities in antici-
pation of shifting customer needs.
NLRB-FOIA-00005795
5
Asia-Pacific 1,130
Europe 800
North America 680
Middle East 300
Latin America 150
Russia &
Central Asia 90
Africa 70
Products
Services
Total Market Value $3.2T
Region $B
Market Value by Region
2009 2028
2%
3%
5%
9%
21%
25%
35%
Addressable Defense, Space
and Security Market
2010 2014 ($ in billions)
Core International
170
Core U.S.
360
Adjacent U.S. & International
430
Total Addressable
960
200 $0 400 600 800 1,000
With a projected
market value of
$3.2 trillion over
the next 20 years,
commercial aviation
will continue to
expand and provide
long-term growth
opportunities.
Our focus here is three-fold: extend
our existing lines of business, capture a
healthy share of international defense
and services opportunities and move
aggressively into high-growth adjacencies
(both civilian and government) with
investments in cyber-security, intelligence
and surveillance, unmanned systems,
logistics command and control, energy
solutions and infrastructure services.
In 2009, we made progress on all
three fronts. We added either U.S. or
international orders for several existing
programs, including the C-17, F/A-18 and
Chinook, as well as 27 major services
and support contracts. We also had key
unmanned systems and cybersecurity
wins and won three Smart Grid demon-
stration awards from the U.S. Department
of Energy, where we will endeavor to
apply our capability in large-scale systems
integration to the creation of a more
ef cient, environmentally progressive and
secure power-distribution system. And
we became the sole nalist as delivery
partner for the United Kingdoms Future
Logistic Information Systems program.
Expand OurInternational Advantage
Our international relationships, reputation
and experience are among this com-
panys strongest competitive advantages.
And our opportunity is large and growing:
More than 80 percent of our current
Commercial Airplanes backlog will go to
international customers, and a big
percentage of future growth in Defense,
Space & Security will come from interna-
tional markets. So we must continue to
address market opportunities as one
company with a global team that
broadens and deepens our relationships
with customers, governments, non-
governmental organizations, technology
centers, industry partners and communi-
ties. This approach resulted in recent
multi-billion-dollar defense sales to
Australia, India, Japan, the Republic of
Korea, Qatar, Saudi Arabia, the United
Arab Emirates and the United Kingdom.
But weve only scratched the surface of
how much we can achieve as we compete
for new business in 2010 and beyond.
Grow OurServices Businesses
In 2009, our services businesses account-
ed for more than $13 billion of revenue.
Defense services earned double-digit
margins and grew its top line 18 percent.
Commercial services also maintained
double-digit margins even as it experi-
enced marketplace realities that brought
its revenue down 6 percent. Meanwhile,
both services businesses have been
improving customer satisfaction and
reducing costs by sharing infrastructure,
logistics, training and technology in key
areas. Both also have worked together
to integrate acquisitions that are making
meaningful nancial contributions in a
dif cult market while sowing seeds of
growth that will ourish when todays
struggling commercial markets revive.
Drive Innovation Through Focused R&D
We have made excellent progress in
aligning our technology investments with
our overall business strategies and
managing them centrally. In 2009, our
enterprise technology team found hun-
dreds of millions of dollars in synergies
that will allow us to spend once, reap
multiple bene ts and generate greater
impact from the companys substantial
investment in research and development.
Last year we also strengthened the
role of Boeing Research & Technology, our
central research arm, and consolidated our
multiple test-and-evaluation teams into a
single companywide organization Boeing
Test & Evaluation, which is responsible
for all of our ight and laboratory testing.
With a projected
addressable market
of nearly $1 trillion
over the next ve
years, Boeing will
continue to pursue
and deliver product
and service growth
opportunities
across our core,
adjacent and inter-
national markets.
NLRB-FOIA-00005796
6
Environmental Footprint Reduction*
(Percent)
Performance indicators
normalized to revenue.
Energy: MMBtu/$ million
CO2 Emissions:
metric ton/$ million
Hazardous Waste:
ton/$ million
Charitable
Grants 57.00
Business
Donations 45.47
Employee
Contributions 39.47
In-kind
Donations 0.95
Total $142.89
$ million
CO2 Emissions
Intensity 31
EnergyEfficiency 32
Hazardous Waste 38
Progress Achieved %
Investing in Our Communities
0.7%
27.6%
31.8%
39.9%
03 02 04 05 06 07 08 09
25%
0%
50%
75%
100%
*Major U.S. sites
In addition to more
than $142 million
from Boeing, its
employees and The
Boeing Company
Charitable Trust,
Boeing employees
volunteered many
hours to help improve
lives and communi-
ties worldwide.
On a revenue-
adjusted basis,
Boeing has
reduced CO2
emissions by 31
percent, energy
consumption by
32 percent and
hazardous-waste
generation by 38
percent since 2002.
This consolidation and alignment allows
us to eliminate redundancies while
expanding capabilities to speed new
products to market.
Maintain OurFinancial Strength
In 2009, employee teams across the
company rose to the challenge of
improving productivity through Lean+
and our other growth-and-productivity
initiatives. That focus, along with disci-
plined cash management, helped Boeing
generate $5.6 billion of operating cash
ow while at the same time enabling
signi cant investments in programs (such
as the 787 and 747-8) that will grow our
business in the years ahead. We also
issued $5 billion of corporate debt at
very attractive rates.
In starting 2010 with more than
$11 billion of cash and marketable
securities, Boeing has suf cient liquidity
to continue investing in our development
efforts and growth strategies while
navigating ongoing market uncertainties.
And we have renewed our commitment
to manage our nances just as tightly this
year as we did last.
Empowera New Generation of Leaders
I believe we have the best overall team
in the industry. But our goal is to develop
an even better team for the future. So
we have proactively moved promising
leaders into key positions based on how
well they perform their jobs, develop their
own teams, act with integrity and model
the companys Leadership Attributes
(chart the course, set high expectations,
inspire others, nd a way, live the Boeing
values and deliver results). We will continue
to develop and promote leaders on this
basis, stretching ourselves to make Boeing
a better company with each passing day.
Corporate Citizenship
Boeing and its people continue to make
steady progress in protecting the environ-
ment and helping to meet vital needs in
communities all around the world.
We remain on track to achieve ag-
gressive ve-year targets for 25-percent
improvements in greenhouse-gas
emissions intensity, energy ef ciency,
recycling rates and hazardous waste
at our major manufacturing facilities.
Our team also showed tremendous
generosity of spirit throughout the
global recession. In total, Boeing, its
employees and The Boeing Company
Charitable Trust contributed more than
$142 million and employees also
volunteered many hours of their time and
expertise to help improve lives and
communities worldwide in 2009.
In Closing
These are challenging times for most
businesses. They are challenging for us.
The people of Boeing have been tested.
And we have pulled together. I believe
the actions we are taking today will make
this company even more competitive for
decades to come. We are energized,
focused on shared objectives and ready
to take advantage of the tremendous
opportunities that call out for this com-
panys unique strengths. I am honored
to lead the Boeing team as we strive to
make this the strongest, best and best-
integrated aerospace-based company in
the world for today and tomorrow.
Jim McNerney
Chairman, President and
Chief Executive Of cer
NLRB-FOIA-00005797
7
Front row, left to right:
James F. Albaugh
Executive Vice President; President and Chief
Executive Of cer, Commercial Airplanes
Dennis A. Muilenburg
Executive Vice President; President and Chief
Executive Of cer, Defense, Space & Security
James A. Bell
Executive Vice President; Corporate President
and Chief Financial Of cer
Middle row, left to right:
Wanda K. Denson-Low
Senior Vice President, Of ce of Internal
Governance
John J. Tracy
Senior Vice President, Engineering, Operations
and Technology, and Chief Technology Of cer
Timothy J. Keating
Senior Vice President, Government Operations
Backrow, left to right:
Richard D. Stephens
Senior Vice President, Human Resources
and Administration
Thomas J. Downey
Senior Vice President, Communications
Shephard W. Hill
President, Boeing International, Senior Vice
President, Business Development and Strategy
J. Michael Luttig
Executive Vice President and General Counsel
The Executive Council
NLRB-FOIA-00005798
Boeing delivered
record revenues
in 2009. Earnings
performance was
impacted by cost
reclassication
on the 787, com-
mercial airplane
market conditions
and cost increases
on the 747-8.
Boeing shareholder
returns continue to
recover from lows
in 2008, while
outperforming the
S&P 500 Index
over the ve-year
period.
Financial Results
As we move ahead, we must continue to generate
strong core performance, meet the commitments
we have made to our customers and maintain
the level of nancial discipline demonstrated in
2009. And we must be relentless in our drive for
greater ef ciencies and improved productivity.
The challenges ahead are still signi cant, but we
have the right people and the resources we need
to be successful and to consistently deliver on
Boeings great potential.
$0
$300
$150
$250
$200
$50
$100
The Boeing Company
S&P 500 Aerospace & Defense
S&P 500 Index
*Cumulative return assumes $100 invested;
includes reinvestment of dividends
Boeing
S&P 500 Index
S&P 500
Aerospace &
Defense
05 04 06 07 08 09
Comparison of Cumulative*
Five-Year Total Shareholder Returns
Company/
Index
Years Ending December
Base
Period
2004
100
100
100
2005
137.92
115.93
104.91
2006
177.06
145.10
121.48
2007
176.87
173.13
128.14
2008
88.38
109.87
80.73
2009
116.41
136.94
102.10
8
Net Earnings
($ in billions)
05
06
07
08
09
2.6
2.2
4.1
2.7
1.3
Revenues
($ in billions)
05
06
07
08
09
53.6
61.5
66.4
60.9
68.3
Earnings Per Share*
05
06
07
08
09
3.19
2.84
5.26
3.65
1.87
*Represents diluted earnings per share
from continuing operations
NLRB-FOIA-00005799
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2009
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-442
THE BOEING COMPANY

(Exact name of registrant as specified in its charter)
Delaware
91-0425694
State or other jurisdiction of

incorporation or organization
(I.R.S. Employer Identification No.)

100 N. Riverside, Chicago, IL
60606-1596
(Address of principal executive offices)
(Zip Code)
Registrants telephone number, including area code (312) 544-2000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class

Name of each exchange on which registered
Common Stock, $5 par value
New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T ( 232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K ( 229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule
12b-2 of the Exchange Act. Large accelerated filer Accelerated filer
Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
As of June 30, 2009, there were 697,288,343 common shares outstanding held by nonaffiliates of the registrant, and the
aggregate market value of the common shares (based upon the closing price of these shares on the New York Stock Exchange)
was approximately $29.6 billion.
The number of shares of the registrants common stock outstanding as of February 1, 2010 was 756,976,242.
(This number includes 30 million outstanding shares held by the ShareValue Trust which are not eligible to vote.)
DOCUMENTS INCORPORATED BY REFERENCE
Part III incorporates information by reference to the registrants definitive proxy statement, to be filed with the Securities and
Exchange Commission within 120 days after the close of the fiscal year ended December 31, 2009.
NLRB-FOIA-00005800
THE BOEING COMPANY
Index to the Form 10-K
For the Fiscal Year Ended December 31, 2009
PART I Page
Item 1. Business 1
Item 1A. Risk Factors 6
Item 1B. Unresolved Staff Comments 13
Item 2. Properties 13
Item 3. Legal Proceedings 14
Item 4. Submission of Matters to a Vote of Security Holders 14
PART II
Item 5. Market for Registrants Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities 15
Item 6. Selected Financial Data 16
Item 7. Managements Discussion and Analysis of Financial Condition and Results
of Operations 17
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 48
Item 8. Financial Statements and Supplementary Data 49
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure 115
Item 9A. Controls and Procedures 115
Item 9B. Other Information 115
PART III
Item 10. Directors, Executive Officers and Corporate Governance 116
Item 11. Executive Compensation 118
Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters 118
Item 13. Certain Relationships and Related Transactions, and Director
Independence 119
Item 14. Principal Accountant Fees and Services 119
PART IV
Item 15. Exhibits, Financial Statement Schedules 120
Signatures 125
Schedule II Valuation and Qualifying Accounts 127
Exhibit (12) Computation of Ratio of Earnings to Fixed Charges 127
Exhibit (21) List of Company Subsidiaries 128
Exhibit (23) Consent of Independent Registered Public Accounting Firm 134
Exhibit (31)(i) CEO Section 302 Certification 135
Exhibit (31)(ii) CFO Section 302 Certification 136
Exhibit (32)(i) CEO Section 906 Certification 137
Exhibit (32)(ii) CFO Section 906 Certification 138
NLRB-FOIA-00005801
Item 1. Business
The Boeing Company, together with its subsidiaries (herein referred to as Boeing, the Company,
we, us, our), is one of the worlds major aerospace firms.
We are organized based on the products and services we offer. We operate in five principal segments:
Commercial Airplanes;
The three segments that comprise our Boeing Defense, Space & Security (BDS) (formerly
Integrated Defense Systems) business:
Boeing Military Aircraft (BMA),
Network & Space Systems (N&SS) and
Global Services & Support (GS&S)
Boeing Capital Corporation (BCC).
Our Other segment classification principally includes the activities of Engineering, Operations &
Technology (EO&T) and certain intercompany items. EO&T is an advanced research and development
organization focused on innovative technologies, improved processes and the creation of new
products.
Commercial Airplanes Segment
The Commercial Airplanes segment develops, produces and markets commercial jet aircraft and
provides related support services, principally to the commercial airline industry worldwide. We are a
leading producer of commercial aircraft and offer a family of commercial jetliners designed to meet a
broad spectrum of passenger and cargo requirements of domestic and non-U.S. airlines. This family of
commercial jet aircraft currently includes the 737 narrow-body model and the 747, 767, 777 and 787
wide-body models. The Commercial Airplanes segment also offers aviation services support, aircraft
modifications, spares, training, maintenance documents and technical advice to commercial and
government customers worldwide.
Boeing Defense, Space & Security
On January 7, 2010, we announced that Integrated Defense Systems will begin operating under the
name Boeing Defense, Space & Security (BDS). Our BDS operations principally involve research,
development, production, modification and support of the following products and related systems:
global strike systems, including fighters, bombers, weapons and unmanned systems; global mobility
systems, including transport and tanker aircraft; rotorcraft systems, including transport, combat and tilt-
rotor aircraft; airborne surveillance and reconnaissance aircraft, including command and control, battle
management and airborne anti-submarine aircraft; network and tactical systems, including information
and battle management systems; intelligence and security systems; missile defense systems; space
and intelligence systems, including satellites and commercial satellite launching vehicles; and space
exploration. BDS is committed to providing affordable, best-of-industry solutions and brings value to
customers through its ability to solve the most complex problems utilizing expertise in large-scale
systems integration, knowledge of legacy platforms and development of common network-enabled
solutions across all customers domains. BDS primary customer is the United States Department of
Defense (U.S. DoD) with approximately 80% of BDS 2009 revenues being derived from this customer.
Other significant revenues were derived from the National Aeronautics and Space Administration
(NASA) and international defense markets, civil markets and commercial satellite markets.
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Boeing Military Aircraft Segment
This segment is engaged in the research, development, production and modification of military
aircraft and precision engagement and mobility products and services. Included in this segment
are the AH-64 Apache, Airborne Early Warning and Control (AEW&C), CH-47 Chinook, C-17
Globemaster, EA-18G Growler Airborne Attack Electronic Aircraft, F/A-18E/F Super Hornet, F-15
Strike Eagle, F-22 Raptor, Harpoon, International KC-767 Tanker, Joint Direct Attack Munition,
P-8A Poseidon, Small Diameter Bomb, T-45 TS Goshawk and V-22 Osprey.
Network & Space Systems Segment
This segment is engaged in the research, development, production and modification of products
and services to assist our customers in transforming their operations through network integration,
intelligence and surveillance systems, communications, architectures and space exploration.
Included in this segment are the Airborne Laser, Family of Advanced Beyond Line-of-Sight
Terminals (FAB-T), Brigade Combat Team Modernization (BCTM) (formerly Future Combat
Systems (FCS)), Future Rapid Effects System, Global Positioning System, Ground-based
Midcourse Defense (GMD), International Space Station, Joint Tactical Radio System (JTRS),
Satellite Systems, SBInet, Space Payloads and Space Shuttle.
Global Services & Support Segment
This segment is engaged in the operations, maintenance, training, upgrades and logistics support
functions for military platforms and operations. Included in this segment are the following activities:
Integrated Logistics on platforms including AH-64, AV-8B, C-17, CH-47, F-15, F/A-18, F-22, GMD,
International 767 Tanker and V-22; Maintenance, Modifications and Upgrades on platforms
including A-10, B-1, B-52, C-32, C-40, C-130, E-4B, E-6, KC-10, KC-135, T-38 and VC-25;
Training Systems and Services on platforms including AH-64, C-17, F-15, F-16, F/A-18 and T-45;
and International Support and Advanced Global Services and Support.
Boeing Capital Corporation Segment
In the commercial aircraft market, BCC facilitates, arranges, structures and provides selective financing
solutions for our Commercial Airplanes customers. In the space and defense markets, BCC primarily
arranges and structures financing solutions for our BDS government customers. BCCs portfolio
consists of equipment under operating leases, finance leases, notes and other receivables, assets held
for sale or re-lease and investments.
Financial and Other Business Information
See the Summary of Business Segment Data and Note 21 to the Consolidated Financial Statements
for financial information, including revenues and earnings from operations, for each of the major
business segments.
Intellectual Property
We own numerous patents and have licenses for the use of patents owned by others, which relate to
our products and their manufacture. In addition to owning a large portfolio of intellectual property, we
also license intellectual property to and from third parties. For example, the U.S. government has
licenses in our patents that are developed in performance of government contracts, and it may use or
authorize others to use the inventions covered by such patents for government purposes. Unpatented
research, development and engineering skills, as well as certain trademarks and other intellectual
property rights, also make an important contribution to our business. While our intellectual property
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rights in the aggregate are important to the operation of each of our businesses, we do not believe that
our business would be materially affected by the expiration of any particular intellectual property rights
or termination of any particular intellectual property patent license agreements.
Non-U.S. Sales
See Note 21 to the Consolidated Financial Statements for information regarding non-U.S. sales.
Research and Development
Research and development expenditures involve experimentation, design, development and related
test activities for defense systems, new and derivative jet aircraft including both commercial and
military, advance space and other company-sponsored product development. These are expensed as
incurred including amounts allocable as reimbursable overhead costs on U.S. government contracts.
Our total research and development expense amounted to $6.5 billion, $3.8 billion and $3.9 billion in
2009, 2008 and 2007, respectively. These amounts are net of 787-related research and development
cost sharing payments from suppliers of $0, $50 million and $130 million in 2009, 2008 and 2007,
respectively. Research and development expense in 2009 includes $2.7 billion of production costs
related to the first three flight test 787 aircraft that cannot be sold due to the inordinate amount of
rework and unique and extensive modifications made to the aircraft.
Research and development costs also include bid and proposal efforts related to government products
and services, as well as costs incurred in excess of amounts estimated to be recoverable under cost-
sharing research and development agreements. Bid and proposal costs were $343 million, $330 million
and $306 million in 2009, 2008 and 2007, respectively.
Research and development highlights for each of the major business segments are discussed in more
detail in Segment Results of Operations and Financial Condition on pages 21 38.
Employees
Total workforce level at December 31, 2009 was 157,100.
As of December 31, 2009, our principal collective bargaining agreements were with the following
unions:
Union
Percent of our
Employees
Represented Status of the Agreements with the Union
The International Association of
Machinists and Aerospace
Workers (IAM)
18% We have two major agreements; one expiring in
June of 2010 and one in September of 2012.
The Society of Professional
Engineering Employees in
Aerospace (SPEEA)
13% We have two major agreements expiring in October
of 2012.
The United Automobile,
Aerospace and Agricultural
Implement Workers of America
(UAW)
2% We have one major agreement expiring in April of
2010.
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Competition
The commercial jet aircraft market and the airline industry remain extremely competitive. We face
aggressive international competitors, including Airbus, who are intent on increasing their market share.
We are focused on improving our processes and continuing cost reduction efforts. We continue to
leverage our extensive customer support services network which includes aviation support, spares,
training, maintenance documents and technical advice for airlines throughout the world to provide a
higher level of customer satisfaction and productivity.
BDS faces strong competition in all market segments, primarily from Lockheed Martin Corporation,
Northrop Grumman Corporation, Raytheon Company and General Dynamics Corporation. Non-U.S.
companies such as BAE Systems and European Aeronautic Defence and Space Company (EADS),
the parent of Airbus, continue to pursue a strategic presence in the U.S. market by strengthening their
North American operations and partnering with U.S. defense companies. In addition, certain of our
competitors have occasionally formed teams with other competitors to address specific customer
requirements. BDS expects the trend of strong competition to continue into 2010 with many
international firms pursuing announced intentions of increasing their U.S. presence.
Regulatory Matters
Our businesses are heavily regulated in most of our markets. We deal with numerous U.S. government
agencies and entities, including but not limited to all of the branches of the U.S. military, NASA and the
Department of Homeland Security. Similar government authorities exist in our international markets.
U.S. Government Contracts. The U.S. government, and other governments, may terminate any of our
government contracts at their convenience as well as for default based on our failure to meet specified
performance measurements. If any of our government contracts were to be terminated for
convenience, we generally would be entitled to receive payment for work completed and allowable
termination or cancellation costs. If any of our government contracts were to be terminated for default,
generally the U.S. government would pay only for the work that has been accepted and can require us
to pay the difference between the original contract price and the cost to re-procure the contract items,
net of the work accepted from the original contract. The U.S. government can also hold us liable for
damages resulting from the default.
Commercial Aircraft. In the United States, our commercial aircraft products are required to comply with
Federal Aviation Administration regulations governing production and quality systems, airworthiness
and installation approvals, repair procedures and continuing operational safety. Internationally, similar
requirements exist for airworthiness, installation and operational approvals. These requirements are
generally administered by the national aviation authorities of each country and, in the case of Europe,
coordinated by the European Joint Aviation Authorities.
Environmental. Our operations are subject to and affected by a variety of federal, state, local and
non-U.S. environmental laws and regulations relating to the discharge, treatment, storage, disposal,
investigation and remediation of certain materials, substances and wastes. We continually assess our
compliance status and management of environmental matters to ensure our operations are in
substantial compliance with all applicable environmental laws and regulations.
Operating and maintenance costs associated with environmental compliance and management of sites
are a normal, recurring part of our operations. These costs often are allowable costs under our
contracts with the U.S. government. It is reasonably possible that continued environmental compliance
could have a material impact on our results of operations, financial condition or cash flows if more
stringent clean-up standards are imposed, additional contamination is discovered and/or clean-up
costs are higher than estimated.
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A Potentially Responsible Party (PRP) has joint and several liability under existing U.S. environmental
laws. Where we have been designated a PRP by the Environmental Protection Agency or a state
environmental agency, we are potentially liable to the government or third parties for the full cost of
remediating contamination at our facilities or former facilities or at third-party sites. If we were required
to fully fund the remediation of a site, the statutory framework would allow us to pursue rights to
contribution from other PRPs. For additional information relating to environmental contingencies, see
Note 11 to the Consolidated Financial Statements.
International. Our international sales are subject to U.S. and non-U.S. governmental regulations and
procurement policies and practices, including regulations relating to import-export control, investment,
exchange controls and repatriation of earnings. International sales are also subject to varying currency,
political and economic risks.
RawMaterials
We are highly dependent on the availability of essential materials, parts and subassemblies from our
suppliers and subcontractors. The most important raw materials required for our aerospace products
are aluminum (sheet, plate, forgings and extrusions), titanium (sheet, plate, forgings and extrusions)
and composites (including carbon and boron). Although alternative sources generally exist for these
raw materials, qualification of the sources could take a year or more. Many major components and
product equipment items are procured or subcontracted on a sole-source basis with a number of
companies.
Suppliers
We are dependent upon the ability of a large number of suppliers and subcontractors to meet
performance specifications, quality standards and delivery schedules at anticipated costs. While we
maintain an extensive qualification and performance surveillance system to control risk associated with
such reliance on third parties, failure of suppliers or subcontractors to meet commitments could
adversely affect production schedules and program/contract profitability, thereby jeopardizing our
ability to fulfill commitments to our customers. We are also dependent on the availability of energy
sources, such as electricity, at affordable prices. A number of our suppliers have made assertions for
higher prices or other contractual compensation relief which could affect program/contract profitability.
Seasonality
No material portion of our business is considered to be seasonal.
Other Information
Boeing was originally incorporated in the State of Washington in 1916 and reincorporated in Delaware
in 1934. Our principal executive offices are located at 100 N. Riverside, Chicago, Illinois 60606 and our
telephone number is (312) 544-2000.
General information about us can be found at www.boeing.com. The information contained on or
connected to our web site is not incorporated by reference into this Annual Report on Form 10-K and
should not be considered part of this or any other report filed with the Securities and Exchange
Commission (SEC). Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K, as well as any amendments to those reports, are available free of charge
through our web site as soon as reasonably practicable after we file them with, or furnish them to, the
SEC. These reports may also be obtained at the SECs public reference room at 100 F Street, N.E.,
Washington, DC 20549. The SEC also maintains a web site at www.sec.gov that contains reports,
proxy statements and other information regarding SEC registrants, including Boeing.
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Forward-Looking Statements
This report, as well as our Annual Report to Shareholders, quarterly reports, press releases and other
written and oral communications, contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Words such as may, will, should, expects,
intends, projects, believes, estimates, targets, anticipates and similar expressions are used to
identify these forward-looking statements. Forward-looking statements include any statement that does
not directly relate to any historical or current fact.
Forward-looking statements are based on our current expectations and assumptions, which may not
prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties and
changes in circumstances that are difficult to predict. Many factors, including those set forth in the
Risk Factors section below, could cause actual results to differ materially and adversely from these
forward-looking statements. Any forward-looking statement herein speaks only as of the date on which
it is made, and we assume no obligation to publicly update any forward-looking statement, except as
required by law.
Item 1A. Risk Factors
An investment in our common stock or debt securities involves risks and uncertainties and our actual
results and future trends may differ materially from our past performance due to a variety of factors
including, without limitation, the following:
We depend heavily upon commercial airline customers, our suppliers and the worldwide
market, which are subject to unique risks.
We derive a significant portion of our revenues from a limited number of major commercial airlines,
some ofwhich have encounteredfinancial difficulties. We can make no assurance that any customer
will purchase additional products or services from us after our contract with the customer ends. In
addition, financial difficulties, including bankruptcy, of any of the major commercial airlines could
significantly reduce our revenues, even under existing contracts, and limit our opportunity to
generate profits from those customers. Several commercial airlines, including certain of our
customers, have filed for or emerged from bankruptcy protection.
Our ability to deliver aircraft on time depends on a variety of factors, which are subject to unique
risks. Our ability to deliver jet aircraft on schedule is dependent upon a variety of factors, including
execution of internal performance plans, availability of raw materials (such as aluminum, titanium
and composites) and internally and supplier produced parts and structures, conversion of raw
materials into parts and assemblies, performance of suppliers and subcontractors and regulatory
certification. The failure of any or all of these factors could result in significant out-of-sequence work
and disrupted process flows adversely affect production schedules and program/contract profitability,
the latter through increased costs as well as possible customer and/or supplier claims or assertions.
In addition, the introduction of new commercial aircraft programs and major derivative aircraft
involves increased risk associated with meeting development, production and certification schedules.
For example, recent modifications required on the side-of-body section of our 787 aircraft have
resulted in testing and delivery delays.
Market conditions have a significant impact on our ability to sell aircraft into the future. The
worldwide market for commercial jet aircraft is predominantly driven by long-term trends in airline
passenger and cargo traffic. The principal factors underlying long-term traffic growth are sustained
economic growth and political stability, both in developed and emerging countries. Demand for our
commercial aircraft is further influenced by airline industry profitability, world trade policies,
government-to-government relations, terrorism, disease outbreaks, environmental constraints
imposed upon aircraft operations, technological changes and price and other competitive factors.
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Our commercial aircraft customers may request to cancel, modify or reschedule orders. We
generally make sales under aircraft purchase agreements that may, for a variety of reasons, become
the subject of cancellation, modification or rescheduling. Changes in the economic environment and
the financial condition of the airline industry and our customers could result in customer requests to
reschedule or cancel contractual orders. Our contracts have specific provisions relating to schedule
and performance and failure to deliver airplanes in accordance with such provisions could result in
cancellations and/or claims for compensation. Any such cancellations, modification, rescheduling or
claims could significantly reduce our backlog, revenues, profitability and cash flows.
Our commercial aircraft production rates couldchange. Production rate reductions could cause us to
incur disruption and other costs and result in infrastructure costs being allocated to a smaller quantity
of airplanes, all of which could reduce our profitability. The introduction of new aircraft program and/
or higher orders for our aircraft could lead to production rate increases in order to meet the delivery
schedules. Failure to successfully implement any production rate changes could lead to extended
delivery commitments, and depending on the length of delay in meeting delivery commitments,
additional costs and customers rescheduling their deliveries or terminating their related contract with
us.
We dependheavily on U.S. government contracts, which are subject to unique risks.
In 2009, 43% of our revenues were derived from U.S. government contracts. In addition to normal
business risks, our contracts with the U.S. government are subject to unique risks, some of which are
beyond our control.
The funding of U.S. government programs is subject to congressional appropriations. Many of the
U.S. government programs in which we participate may last several years; however, these programs
are normally funded annually. Changes in military strategy and priorities may affect our future
procurement opportunities and existing programs. Long-term government contracts and related
orders are subject to cancellation, or delay, if appropriations for subsequent performance periods are
not made. In addition, the U.S. DoD budget is under pressure due to competing national priorities.
The termination or reduction of funding for existing or new U.S. government programs could result in
a material adverse effect on our earnings, cash flow and financial position.
The U.S. government may modify, curtail or terminate our contracts. The U.S. government may
modify, curtail or terminate its contracts and subcontracts with us, without prior notice and at its
convenience upon payment for work done and commitments made at the time of termination.
Modification, curtailment or termination of one or more of our major programs or contracts could
have a material adverse effect on our results of operations and financial condition.
Our contract costs are subject to audits by U.S. government agencies. U.S. government
representatives may audit the costs we incur on our U.S. government contracts, including allocated
indirect costs. Such audits could result in adjustments to our contract costs. Any costs found to be
improperly allocated to a specific contract will not be reimbursed, and such costs already reimbursed
must be refunded. We have recorded contract revenues based upon costs we expect to realize upon
final audit. However, we do not know the outcome of any future audits and adjustments and we may
be required to reduce our revenues or profits upon completion and final negotiation of audits. If any
audit uncovers improper or illegal activities, we may be subject to civil and criminal penalties and
administrative sanctions, including termination of contracts, forfeiture of profits, suspension of
payments, fines and suspension or prohibition from doing business with the U.S. government.
Our business is subject to potential U.S. government inquiries andinvestigations. We are sometimes
subject to certain U.S. government inquiries and investigations of our business practices due to our
participation in government contracts. Any such inquiry or investigation could potentially result in a
material adverse effect on our results of operations and financial condition.
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Our U.S. government business is also subject to specific procurement regulations and other
requirements. These requirements, although customary in U.S. government contracts, increase our
performance and compliance costs. These costs might increase in the future, reducing our margins,
which could have a negative effect on our financial condition. Failure to comply with these
regulations and requirements could lead to suspension or debarment, for cause, from U.S.
government contracting or subcontracting for a period of time and could have a negative effect on
our reputation and ability to secure future U.S. government contracts.
We enter into fixed-price contracts, which couldsubject us to losses ifwe have cost overruns.
Many of our contracts in BDS and most of our contracts in Commercial Airplanes are on a fixed-price
basis. Approximately 50% of BDS revenues are generated from fixed-price contracts. While firm fixed
price contracts enable us to benefit from performance improvements, cost reductions and efficiencies,
they also subject us to the risk of reduced margins or incurring losses if we are unable to achieve
estimated costs and revenues. If our estimated costs exceed our estimated price, we recognize reach-
forward losses which can significantly affect our reported results.
The long term nature of many of our contracts and programs makes the process of estimating costs
and revenues on fixed price contracts inherently risky. For example commercial jet aircraft are normally
sold on a firm fixed-price basis with an indexed price escalation clause. These escalation clauses
account for economic fluctuations over the period of time from sale to delivery which can span many
years. A price escalation formula based on pre-defined factors is used to determine the final price of
the airplane at the time of customer delivery. Changes in future estimates of the underlying price
escalation index can significantly impact estimated revenues and margins in any quarter. Fixed price
contracts in our BDS business often contain price incentives and penalties tied to performance which
can be difficult to estimate and have significant impacts on margins. In addition, some of our contracts
have specific provisions relating to cost, schedule and performance. If we fail to meet the terms
specified in those contracts, our sales price could be reduced, which would adversely affect our
financial condition.
Fixed-price development work inherently has more uncertainty than work pursuant to production
contracts and, therefore, more variability in estimates of the cost to complete the work. Fixed price
development contracts inherently have more uncertainty than fixed price production contracts.
Examples of significant BDS fixed-price development contracts include AEW&C, International KC-767
Tankers and commercial and military satellites. Examples of significant Commercial Airplanes
development programs include the 787 and 747-8. Many of these development programs have very
complex designs. As technical or quality issues arise, we may experience schedule delays and higher
costs to complete. Additionally, price escalation factors may also impact margins by reducing the
estimated price of airplanes delivered in the future. Both of these factors may ultimately result in a
material charge if the program has or is determined to have a reach forward loss. Successful
performance depends on our ability to meet production specifications and delivery rates. If we are
unable to perform and deliver to contract requirements, our contract price could be reduced through
the incorporation of liquidated damages, termination of the contract for default, or other financially
significant exposure. Management uses its best judgment to estimate the cost to perform the work, the
price we will eventually be paid and, in the case of commercial programs, the number of units to
include in the initial accounting quantity. While we believe the cost and price estimates incorporated in
the financial statements are appropriate, future events could result in either upward or downward
adjustments to those estimates. Changes to estimates of the program accounting quantity, production
costs and rates, learning curve, costs of derivative aircraft, customer negotiations/settlements, supplier
claims and certification issues could also result in lower margins or reach-forward losses. We may
continue to experience technical and quality issues requiring further delays in schedule or revisions to
our cost estimates.
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On Commercial Airplanes development programs our ability to sell test aircraft or initial units produced
can also affect our results. For example in 2009 we determined that three of the 787 flight test aircraft
could not be sold. This resulted in $2.7 billion being accounted for as research and development
expense as opposed to being capitalized as inventory. Our inability to sell additional test aircraft could
increase future research and development expenses.
We enter into cost-type contracts which also carry risks.
Approximately 50% of BDS revenues are generated from cost-type contracting arrangements. Some of
these are development programs that have complex design and technical challenges. These cost-type
programs typically have award or incentive fees that are subject to uncertainty and may be earned over
extended periods. In these cases the associated financial risks are primarily in lower profit rates or
program cancellation if cost, schedule or technical performance issues arise. Programs whose
contracts are primarily cost-type include GMD, BCTM (formerly FCS), P-8A Poseidon, Proprietary
programs, Airborne Laser, JTRS, FAB-T and the EA-18G Growler.
We enter into contracts that include in-orbit incentive payments that subject us to risks.
Contracts in the commercial satellite industry and certain government satellite contracts include in-orbit
incentive payments. These in-orbit payments may be paid over time after final satellite acceptance or
paid in full prior to final satellite acceptance. In both cases, the in-orbit incentive payment is at risk if the
satellite does not perform to specifications for up to 15 years after acceptance. The net present value
of in-orbit incentive fees we ultimately expect to realize is recognized as revenue in the construction
period. If the satellite fails to meet contractual performance criteria, customers will not be obligated to
continue making in-orbit payments and/or we may be required to provide refunds to the customer and
incur significant charges.
We use estimates in accounting for many contracts andprograms. Changes in our estimates
couldadversely affect our future financial results.
Contract and program accounting require judgment relative to assessing risks, estimating revenues
and costs and making assumptions for schedule and technical issues. Due to the size and nature of
many of our contracts and programs, the estimation of total revenues and cost at completion is
complicated and subject to many variables. Assumptions have to be made regarding the length of time
to complete the contract or program because costs also include expected increases in wages, material
prices and allocated fixed costs. Incentives or penalties related to performance on contracts are
considered in estimating sales and profit rates, and are recorded when there is sufficient information
for us to assess anticipated performance. Suppliers assertions are also assessed and considered in
estimating costs and profit rates. Estimates of award fees are also used in sales and profit rates based
on actual and anticipated awards.
Under program accounting, inventoriable production costs (including overhead), program tooling costs
and routine warranty costs are accumulated and charged as cost of sales by program instead of by
individual units or contracts. A program consists of the estimated number of units (accounting quantity)
of a product to be produced in a continuing, long-term production effort for delivery under existing and
anticipated contracts limited by the ability to make reasonably dependable estimates. To establish the
relationship of sales to cost of sales, program accounting requires estimates of (a) the number of units
to be produced and sold in a program, (b) the period over which the units can reasonably be expected
to be produced and (c) the units expected sales prices, production costs, program tooling and routine
warranty costs for the total program. Several factors determine accounting quantity, including firm
orders, letters of intent from prospective customers and market studies. Such estimates are
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reconsidered throughout the life of our programs. Changes in underlying assumptions, supplier
performance, circumstances or estimates concerning the selection of the accounting quantity or
changes in market conditions, along with a failure to realize predicted costs, may adversely affect
future financial performance.
Because of the significance of the judgments and estimation processes described above, it is likely that
materially different sales and profit amounts could be recorded if we used different assumptions or if
the underlying circumstances were to change. Changes in underlying assumptions, circumstances or
estimates may adversely affect future period financial performance. For additional information on our
accounting policies for recognizing sales and profits, see our discussion under Managements
Discussion and AnalysisCritical Accounting PoliciesContract Accounting/Program Accounting on
pages 43-45 and Note 1 to the Consolidated Financial Statements on pages 56-57 of this Form 10-K.
Significant changes in discount rates, actual investment return on pension assets andother
factors couldaffect our earnings, equity, andpension contributions in future periods.
Our earnings may be positively or negatively impacted by the amount of income or expense we record
for our pension and other postretirement benefit plans. Generally accepted accounting principles in the
United States of America (GAAP) require that we calculate income or expense for the plans using
actuarial valuations. These valuations reflect assumptions relating to financial market and other
economic conditions. Changes in key economic indicators can change the assumptions. The most
significant year-end assumptions used to estimate pension or other postretirement income or expense
for the following year are the discount rate, the expected long-term rate of return on plan assets and
expected future medical inflation. In addition, we are required to make an annual measurement of plan
assets and liabilities, which may result in a significant change to equity through a reduction or increase
to Other comprehensive income. For a discussion regarding how our financial statements can be
affected by pension and other postretirement plan accounting policies, see Managements Discussion
and AnalysisCritical Accounting PoliciesPostretirement Plans on pages 46-47 of this Form 10-K.
Although GAAP expense and pension or other postretirement contributions are not directly related, the
key economic factors that affect GAAP expense would also likely affect the amount of cash or common
stock we would contribute to the pension or other postretirement plans. Potential pension contributions
include both mandatory amounts required under federal law Employee Retirement Income Security Act
(ERISA) and discretionary contributions to improve the plans funded status.
Some ofour andour suppliersworkforces are representedby labor unions, which may leadto
workstoppages.
Approximately 57,000 employees, which constitute approximately 36% of our total workforce, are union
represented as of December 31, 2009. We experienced a work stoppage in 2008 when a labor strike
halted commercial aircraft and certain BMA program production and we may experience additional
work stoppages in the future, which could adversely affect our business. We cannot predict how stable
our relationships, currently with 14 different U.S. labor organizations and 7 different non-U.S. labor
organizations, will be or whether we will be able to meet the unions requirements without impacting
our financial condition. The unions may also limit our flexibility in dealing with our workforce. Union
actions at suppliers can also affect us. Work stoppages and instability in our union relationships could
delay the production and/or development of our products, which could strain relationships with
customers and cause a loss of revenues which would adversely affect our operations.
Competition within our markets may reduce our procurement offuture contracts andsales.
The markets in which we operate are highly competitive. Our competitors may have more extensive or
more specialized engineering, manufacturing and marketing capabilities than we do in some areas. In
addition, some of our largest customers could develop the capability to manufacture products or
10
NLRB-FOIA-00005811
provide services similar to products that we manufacture or services that we provide. This would result
in these customers supplying their own products or services and competing directly with us for sales of
these products or services, all of which could significantly reduce our revenues. Furthermore, we are
facing increased international competition and cross-border consolidation of competition. There can be
no assurance that we will be able to compete successfully against our current or future competitors or
that the competitive pressures we face will not result in reduced revenues and market share.
We derive a significant portion ofour revenues from non-U.S. sales andare subject to the risks
ofdoing business in other countries.
In 2009, sales to non-U.S. customers accounted for approximately 42% of our revenues. We expect
that non-U.S. sales will continue to account for a significant portion of our revenues for the foreseeable
future. As a result, we are subject to risks of doing business internationally, including:
changes in regulatory requirements;
domestic and international government policies, including requirements to expend a portion of
program funds locally and governmental industrial cooperation requirements;
fluctuations in international currency exchange rates;
volatility in foreign political and economic environments and changes in foreign national priorities
and budgets, which can lead to delays or fluctuations in orders;
the complexity and necessity of using non-U.S. representatives and consultants;
the uncertainty of the ability of non-U.S. customers to finance purchases;
uncertainties and restrictions concerning the availability of funding credit or guarantees;
imposition of taxes, export controls, tariffs, embargoes and other trade restrictions;
the difficulty of management and operation of an enterprise spread over various countries;
compliance with a variety of international laws, as well as U.S. laws affecting the activities of U.S.
companies abroad; and
economic and geopolitical developments and conditions.
While the impact of these factors is difficult to predict, any one or more of these factors could adversely
affect our operations in the future.
The outcome oflitigation in which we have been namedas a defendant andofgovernment
inquiries andinvestigations involving our business is unpredictable andan adverse decision in
any such matter couldresult in significant monetary payments andhave a material adverse
affect on our financial position andresults ofoperations.
We are defendants in a number of litigation matters. These claims may divert financial and
management resources that would otherwise be used to benefit our operations. No assurances can be
given that the results of these matters will be favorable to us. An adverse resolution of any of these
lawsuits could have a material adverse affect on our financial position and results of operations. In
addition, we are sometimes subject to government inquiries and investigations of our business due,
among other things, to our business relationships with the U.S government, the heavily regulated
nature of our industry, and in the case of environmental proceedings, our ownership of certain
property. Any such inquiry or investigation could potentially result in an adverse ruling against us,
which could result in significant monetary payments (including possible environmental remediation
costs) and a material adverse effect on our financial position and operating results.
11
NLRB-FOIA-00005812
Asubstantial deterioration in the financial condition ofthe commercial airline industry or
significant changes to the financial or regulatory landscape couldhave a significant impact on
Boeing Capital Corporation, which couldin turn have an adverse effect on our earnings, cash
flows and/or financial position.
BCC, our wholly-owned subsidiary, has substantially all of its portfolio concentrated among commercial
airline customers. If terrorist attacks, a serious health epidemic, significant regulatory actions in
response to environmental concerns, increases in fuel related costs or other exogenous events were to
have an adverse impact on the airline industry, increased requests for financing, significant defaults by
airline customers, repossessions of aircraft and/or airline bankruptcies and restructurings could
negatively impact the strength of BCCs portfolio and our operating results. In addition, a significant
deterioration in the aircraft financing environment, or significant regulatory reforms that increase costs
to companies like BCC, could impact BCCs financial position and operating results. Any of these
events could have a negative effect on our earnings, cash flows and/or financial position.
We may be unable to obtain debt to fundour operations andcontractual commitments at
competitive rates, on commercially reasonable terms or in sufficient amounts.
We depend, in part, upon the issuance of debt to fund our operations and contractual commitments. If
we were called upon to fund all outstanding financing commitments, our market liquidity may not be
sufficient. A number of factors could cause us to incur increased borrowing costs and to have greater
difficulty accessing public and private markets for debt. These factors include disruptions or declines in
the global capital markets and/or a decline in our financial performance or outlook or credit ratings. The
occurrence of any or all of these events may adversely affect our ability to fund our operations and
contractual or financing commitments.
We may not realize the anticipatedbenefits ofmergers, acquisitions, joint ventures/strategic
alliances or divestitures.
As part of our business strategy, we may merge with or acquire businesses, form joint ventures/
strategic alliances and divest operations. Whether we realize the anticipated benefits from these
transactions depends, in part, upon the integration between the businesses involved, the performance
of the underlying products, capabilities or technologies and the management of the transacted
operations. Accordingly, our financial results could be adversely affected from unanticipated
performance issues, transaction-related charges, amortization of expenses related to intangibles,
charges for impairment of long-term assets, credit guarantees, partner performance and
indemnifications. Consolidations of joint ventures could also impact our results of operations or
financial position. While we believe that we have established appropriate and adequate procedures
and processes to mitigate these risks, there is no assurance that these transactions will be successful.
Divestitures may result in continued financial involvement in the divested businesses, such as through
guarantees or other financial arrangements, following the transaction. Nonperformance by those
divested businesses could affect our future financial results.
Our insurance coverage may be inadequate to cover all significant riskexposures.
We are exposed to liabilities that are unique to the products and services we provide. While we
maintain insurance for certain risks and, in some circumstances, we may receive indemnification from
the U.S. government, insurance cannot be obtained to protect against all risks and liabilities. It is
therefore possible that the amount of our insurance coverage may not cover all claims or liabilities, and
we may be forced to bear substantial costs.
12
NLRB-FOIA-00005813
Business disruptions couldseriously affect our future sales andfinancial condition or increase
our costs andexpenses.
Our business may be impacted by disruptions including, but not limited to, threats to physical security,
information technology attacks or failures, damaging weather or other acts of nature and pandemics or
other public health crises. Any of these disruptions could affect our internal operations or services
provided to customers, and could impact our sales, increase our expenses or adversely affect our
reputation or our stock price.
Item 1B. Unresolved Staff Comments
Not Applicable.
Item 2. Properties
We occupied approximately 86 million square feet of floor space on December 31, 2009 for
manufacturing, warehousing, engineering, administration and other productive uses, of which
approximately 96% was located in the United States.
The following table provides a summary of the floor space by business:
(Square feet in thousands) Owned Leased
Government
Owned* Total
Commercial Airplanes 35,412 5,266 40,678
Boeing Defense, Space & Security 30,356 9,554 207 40,117
Other** 4,134 653 4,787
Total 69,902 15,473 207 85,582
* Excludes rent-free space furnished by U.S. government landlord of 1,076 square feet.
** Other includes BCC; EO&T; Corporate Headquarters; and Boeing Shared Services Group.
At December 31, 2009, our segments occupied facilities at the following major locations that occupied
in excess of 74 million square feet of floor space:
Commercial Airplanes Greater Seattle, WA; North Charleston, SC
Boeing Defense, Space & Security Greater Los Angeles, CA; Greater Seattle, WA; Greater St.
Louis, MO; Philadelphia, PA; San Antonio, TX; Huntsville, AL; Mesa, AZ; Wichita, KS; Houston,
TX; and Greater Washington, DC
Other Chicago, IL and Greater Seattle, WA
Most runways and taxiways that we use are located on airport properties owned by others and are
used jointly with others. Our rights to use such facilities are provided for under long-term leases with
municipal, county or other government authorities. In addition, the U.S. government furnishes us
certain office space, installations and equipment at U.S. government bases for use in connection with
various contract activities.
We believe that our major properties are adequate for our present needs and, as supplemented by
planned improvements and construction, expect them to remain adequate for the foreseeable future.
13
NLRB-FOIA-00005814
Item 3. Legal Proceedings
Currently, we are involved in a number of legal proceedings. For a discussion of contingencies related
to legal proceedings, see Note 20 to our Consolidated Financial Statements, which is hereby
incorporated by reference.
BSSI/SES NewSkies
During 2007, the SES New Skies (New Skies) NSS-8 satellite, a Boeing 702 model spacecraft, was
declared a loss when the Sea Launch Zenit-3SL vehicle carrying the satellite experienced an anomaly
during the launch that destroyed the rocket and the payload. In the event of such a launch failure, New
Skies had an option under the NSS-8 contract to order a replacement satellite. On December 23, 2009,
the parties executed a confidential settlement agreement with respect to all claims arising from the
matter.
Santa Susana Field Laboratory
We possess a National Pollutant Discharge Elimination System permit, issued by the California
Regional Water Quality Control Board, Los Angeles Region (the California Board), which limits the
permissible level of certain constituents in storm water discharged from various outfalls at our Santa
Susana Field Laboratory site. On June 11, 2008, the California Board issued a Notice of Violation
informing us that the California Board has identified 24 discharge violations from our self-monitoring
reports covering the period October 1, 2006, through March 31, 2008, and in subsequent
communications we have been informed that the California Board believes there may be an additional
11 exceedences for a total of 35 potential discharge violations through February 28, 2009. Each
violation, if established, could give rise to assessment of an administrative penalty of up to $10,000, or
$25,000 if the matter is ultimately resolved by the California Department of Justice, plus possible
additional assessments based upon the volume of water discharged.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders during the quarter ended December 31,
2009.
14
NLRB-FOIA-00005815
PART II
Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
The principal market for our common stock is the New York Stock Exchange and trades under the
symbol BA. The number of holders of common stock as of February 1, 2010, was approximately
222,498. Additional information required by this item is incorporated by reference from Note 22 to our
Consolidated Financial Statements.
Issuer Purchases of Equity Securities
The following table provides information about purchases we made during the quarter ended
December 31, 2009 of equity securities that are registered by us pursuant to Section 12 of the
Exchange Act:
(Dollars in millions, except per share data)
(a) (b) (c) (d)
Total Number
of Shares
Purchased
(1)
Average
Price Paid per
Share
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
Approximate Dollar
Value of Shares That May Yet
be Purchased Under the
Plans or Programs
(2)
10/1/2009 thru 10/31/2009 46,741 $52.68 $3,610
11/1/2009 thru 11/30/2009 571 49.48 3,610
12/1/2009 thru 12/31/2009 619 51.67 3,610
Total 47,931 $52.63
(1)
We purchased an aggregate of 47,931 shares transferred to us from employees in satisfaction of
minimum tax withholding obligations associated with the vesting of restricted stock during the
period. We made no other share repurchases during the quarter ended December 31, 2009.
(2)
On October 29, 2007, the Board approved the repurchase of up to $7 billion of common stock (the
Program). Unless terminated earlier by a Board resolution, the Program will expire when we have
used all authorized funds for repurchase.
15
NLRB-FOIA-00005816
Item 6. Selected Financial Data
Five-Year Summary (Unaudited)
(Dollars in millions, except per share data) 2009 2008 2007 2006 2005
Operations
Revenues
Commercial Airplanes $ 34,051 $ 28,263 $ 33,386 $ 28,465 $ 21,365
Boeing Defense, Space & Security:
(a)
Boeing Military Aircraft 14,057 13,311 13,499 14,014 13,273
Network & Space Systems 10,877 11,346 11,481 11,772 11,995
Global Services & Support 8,727 7,390 7,072 6,625 5,837
Total Boeing Defense, Space & Security 33,661 32,047 32,052 32,411 31,105
Boeing Capital Corporation 660 703 815 1,025 966
Other segment 165 567 308 327 658
Unallocated items and eliminations (256) (671) (174) (698) (473)
Total revenues $ 68,281 $ 60,909 $ 66,387 $ 61,530 $ 53,621
General and administrative expense 3,364 3,084 3,531 4,171 4,228
Research and development expense 6,506 3,768 3,850 3,257 2,205
Other income/(loss), net (26) 247 484 420 301
Net earnings from continuing operations $ 1,335 $ 2,654 $ 4,058 $ 2,206 $ 2,562
Net gain/(loss) on disposal of discontinued operations, net of tax (23) 18 16 9 (7)
Cumulative effect of accounting change, net of taxes 17
Net earnings $ 1,312 $ 2,672 $ 4,074 $ 2,215 $ 2,572
Basic earnings per share from continuing operations 1.89 3.68 5.36 2.88 3.26
Diluted earnings per share from continuing operations 1.87 3.65 5.26 2.84 3.19
Cash dividends declared $ 1,233 $ 1,187 $ 1,129 $ 991 $ 861
Per share 1.68 1.62 1.45 1.25 1.05
Additions to Property, plant and equipment 1,186 1,674 1,731 1,681 1,547
Depreciation of Property, plant and equipment 1,066 1,013 978 1,058 1,001
Employee salaries and wages 15,424 15,559 14,852 15,871 13,667
Year-end workforce 157,100 162,200 159,300 154,000 153,000
Financial position at December 31
Total assets
(b)
$ 62,053 $ 53,779 $ 58,986 $ 51,794 $ 59,996
Working capital 2,392 (4,809) (4,184) (6,665) (6,202)
Property, plant and equipment, net 8,784 8,762 8,265 7,675 8,420
Cash and cash equivalents 9,215 3,268 7,042 6,118 5,412
Short-term investments 2,008 11 2,266 268 554
Total debt 12,924 7,512 8,217 9,538 10,727
Customer financing assets 5,834 6,282 7,105 8,890 10,006
Shareholders equity
(b)(d)
2,225 (1,142) 9,078 4,792 11,077
Per share 3.06 (1.64) 12.32 6.32 14.56
Common shares outstanding (in millions)
(c)
726.3 698.1 736.7 757.8 760.6
Contractual Backlog
Commercial Airplanes $250,476 $278,575 $255,176 $174,276 $124,132
(a)
Boeing Military Aircraft 26,311 25,710 22,974 24,689 21,582
Network & Space Systems 7,746 8,868 9,207 7,786 6,144
Global Services & Support 11,967 10,707 9,607 9,812 8,779
Total Boeing Defense, Space & Security 46,024 45,285 41,788 42,287 36,505
Total $296,500 $323,860 $296,964 $216,563 $160,637
Cash dividends have been paid on common stock every year since 1942.
(a)
In 2006, we realigned BDS into three capabilities-driven businesses: BMA (formerly Precision Engagement and Mobility
Systems), N&SS and GS&S (formerly Support Systems). As part of the realignment, certain advanced systems and
research and development activities previously included in the Other segment transferred to the new BDS segments.
Effective January 1, 2009, 2008 and 2007, certain programs were realigned between BDS segments. Prior years have been
recast for segment realignments.
(b)
In 2006, we adopted an accounting standard that required us to reflect the funded status of the pension and postretirement
plans in our Consolidated Statements of Financial Position. This reduced shareholders equity by $8.2 billion. Retrospective
application is not permitted.
(c)
Computation represents actual shares outstanding as of December 31 and excludes treasury shares and the outstanding
shares held by the ShareValue Trust.
(d)
Effective January 1, 2009, we adopted a new accounting standard requiring noncontrolling interests to be separately
presented as a component of shareholders equity. Prior years have been adjusted to conform to the new standard.
16
NLRB-FOIA-00005817
Item 7. Managements Discussion and Analysis of Financial Condition and Results of
Operations
Consolidated Results of Operations and Financial Condition
Overview
We are a global market leader in design, development, manufacture, sale and support of commercial
jetliners, military aircraft, satellites, missile defense, human space flight and launch systems and
services. We are one of the two major manufacturers of 100+ seat airplanes for the worldwide
commercial airline industry and one of the largest defense contractors in the U.S. While our principal
operations are in the U.S., we rely extensively on a network of partners, key suppliers and
subcontractors around the world.
Our strategy is centered on successful execution in healthy core businesses Commercial Airplanes
and Boeing Defense, Space & Security (BDS) supplemented and supported by Boeing Capital
Corporation (BCC). Taken together, these core businesses have historically generated substantial
earnings and cash flow that permit us to invest in new products and services that open new frontiers in
aerospace. We focus on producing the airplanes the market demands and we price our products to
provide a fair return for our shareholders while continuing to find new ways to improve efficiency and
quality. BDS integrates its resources in defense, intelligence, communications, security and space to
deliver capability-driven solutions to its customers at reduced costs. Our strategy is to leverage our
core businesses to capture key next-generation programs while expanding our presence in adjacent
and international markets, underscored by an intense focus on growth and productivity. Our strategy
also benefits as the cyclicality of commercial and defense markets often offset. BCC delivers value by
supporting our business units and managing overall financing exposure.
Consolidated Results of Operations
Revenues
(Dollars in millions)
Years ended December 31, 2009 2008 2007
Commercial Airplanes $34,051 $28,263 $33,386
Boeing Defense, Space & Security 33,661 32,047 32,052
Boeing Capital Corporation 660 703 815
Other segment 165 567 308
Unallocated items and eliminations (256) (671) (174)
Total $68,281 $60,909 $66,387
Revenues in 2009 increased by $7,372 million due to higher revenues in Commercial Airplanes and
BDS. Commercial Airplanes revenues increased by $5,788, primarily due to higher commercial
airplane deliveries in 2009. Deliveries in 2008 were lower as a result of a labor strike in the prior year.
Increases were partially offset by decreases in commercial aviation services and intercompany
revenues. BDS revenues increased by $1,614 million, primarily due to higher revenues in Global
Services & Support (GS&S) and Boeing Military Airplanes (BMA), partially offset by decreases in
Network & Space Systems (N&SS). BCC revenues decreased by $43 million during the year primarily
due to a decrease in the customer financing portfolio. Other segment revenues decreased by $402
million partly due to higher revenues in the prior year from the sale of four C-17 aircraft held under
operating lease. Lower Unallocated items and eliminations improved revenues by $415 million primarily
due to lower P-8A Poseidon program (P-8A) intercompany revenues recognized by Commercial
Airplanes in 2009 compared with 2008.
17
NLRB-FOIA-00005818
The decrease in 2008 revenues of $5,478 million compared with 2007, is primarily due to lower
revenues at Commercial Airplanes. Commercial Airplanes revenues decreased by $5,123 million,
primarily as a result of decreases in new airplane deliveries reflecting the effects of the labor strike,
partially offset by higher intercompany revenues and higher pre-strike deliveries and model mix. We
delivered 104 fewer airplanes than expected during 2008 due to the strike. This reduced revenue by
approximately $6.4 billion for the twelve months ended December 31, 2008. BDS revenues were
unchanged as revenue growth in GS&S was offset by decreases in BMA and N&SS. BCC revenues
decreased by $112 million primarily due to lower interest income on financing receivables and notes
and a decrease in the customer financing portfolio. Other segment revenues increased by $259 million
primarily due to the sale of four C-17 aircraft during 2008, that were held under an operating lease.
Unallocated items and eliminations changed by $497 million, primarily due to the intercompany
elimination of P-8A revenues recognized by Commercial Airplanes.
Earnings From Operations
The following table summarizes our earnings/(loss) from operations:
Commercial Airplanes (583) 1,186 $ 3,584
Boeing Defense, Space & Security 3,299 3,232 3,440
Other segment (152) (307) (331)
Unallocated items and eliminations (594) (323) (1,097)
Total $2,096 $3,950 $ 5,830
Operating earnings in 2009 decreased by $1,854 million compared with 2008. Commercial Airplanes
earnings decreased by $1,769 million primarily due to $2,693 million of costs related to the first three
787 flight test aircraft included in research and development expense as a result of our determination
in August 2009 that these aircraft could not be sold. The earnings decrease is also attributable to
reach-forward losses on the 747 program which grew by $1,352 million in 2009 which is an increase of
$667 million over 2008. Lower commercial aviation services and intercompany earnings also
contributed to lower 2009 earnings. These decreases were partially offset by higher commercial
airplane deliveries in 2009 compared with 2008. BDS earnings increased by $67 million compared with
2008 primarily due to higher earnings in the BMA segment partially offset by lower earnings in the
N&SS segment. BCC operating earnings decreased $36 million reflecting lower revenues, higher
impairment expense and a provision for losses, partially offset by lower interest expense. Other
segment losses decreased by $155 million primarily due to recognition of pre-tax expense of $82
million in the prior year to increase the allowance for losses on customer financing receivables and
lower environmental remediation charges compared with the prior year. Unallocated items and
eliminations in 2009 reduced earnings by $271 million compared with 2008, which is further explained
in the table below.
Operating earnings in 2008 decreased by $1,880 million compared with 2007. Commercial Airplanes
earnings decreased by $2,398 million compared with the same period in 2007, primarily due to fewer
new airplane deliveries resulting from the strike, increased program infrastructure costs related to the
strike and revised schedules on 787 and 747-8, and a charge taken on the 747-8 program.
Commercial Airplanes research and development expense decreased by $124 million to $2,838 million
compared with the same period in 2007, primarily due to lower spending on 787 partially offset by
higher spending on 747-8 and lower supplier development cost sharing payments. BDS earnings
decreased by $208 million compared with 2007 primarily due to lower earnings in the BMA segment
resulting from charges taken on the Airborne Early Warning and Control (AEW&C). BCC operating
18
NLRB-FOIA-00005819
earnings decreased $72 million reflecting lower revenues and a provision for losses partially offset by
lower interest expense. Unallocated items and eliminations in 2008 improved by $774 million
compared with 2007, which is further explained in the table below.
The most significant items included in Unallocated items and eliminations are shown in the following
table:
Share-based plans expense $(189) $(149) $ (233)
Deferred compensation expense/(income) (158) 223 (51)
Other unallocated items and eliminations (264) (110) (127)
Pension 110 (208) (561)
Postretirement (93) (79) (125)
Total $(594) $(323) $(1,097)
The reduction in Share-based plans expense in 2008 is primarily due to the expiration of certain
Performance Shares during 2008 and higher expense acceleration during 2007, resulting from six
payouts compared with zero payouts in 2008.
Deferred compensation expense increased by $381 million in 2009 and decreased by $274 million in
2008. The year over year changes in deferred compensation expense are primarily driven by changes
in our stock price and broad stock market conditions.
Other unallocated items and eliminations expense increased by $154 million in 2009 primarily due to
timing of intercompany expense allocations, elimination of profit on intercompany items and a more
favorable insurance adjustment in the same periods of the prior year. Other unallocated items and
expense in 2008 includes a charge related to satellite litigation of $100 million, offset by lower
performance-based compensation in 2008.
Unallocated pension and other postretirement expense represents the difference between costs
recognized under Generally Accepted Accounting Principles in the United States of America (GAAP) in
the consolidated financial statements and federal cost accounting standards required to be utilized by
our business segments for U.S. government contracting purposes. We recorded net periodic benefit
cost related to pensions and other postretirement benefits of $1,816 million, $1,132 million and $1,773
million in 2009, 2008 and 2007, respectively. Not all net periodic benefit cost is recognized in earnings
in the period incurred because it is allocated to production as product costs and a portion remains in
inventory at the end of the reporting period. A portion of pension and other postretirement expense is
recorded in the business segments and the remainder is included in unallocated pension and other
postretirement expense. Earnings from operations included the following amounts allocated to
business segments and Other unallocated items and eliminations.
(Dollars in millions) Pension
Other Postretirement
Benefits
Years ended December 31, 2009 2008 2007 2009 2008 2007
Allocated to business segments $(989) $(488) $ (521) $(522) (428) (523)
Other unallocated items and eliminations 110 (208) (561) (93) (79) (125)
Total $(879) $(696) $(1,082) $(615) (507) (648)
19
NLRB-FOIA-00005820
Other Earnings Items
Earnings from operations $2,096 $ 3,950 $ 5,830
Other (expense)/income, net (26) 247 484
Interest and debt expense (339) (202) (196)
Earnings before income taxes 1,731 3,995 6,118
Income tax expense (396) (1,341) (2,060)
Net earnings from continuing operations $1,335 $ 2,654 $ 4,058
Other income decreased by $273 million and $237 million in 2009 and 2008. The decreases are
primarily driven by a reduction in investment income as a result of lower interest rates and lower
investment balances. Interest and debt expense increased by $137 million compared with 2008 due to
additional debt issued in 2009.
For a discussion related to Income Taxes, see Note 5.
Backlog
Our backlog at December 31 was as follows:
(dollars in millions) 2009 2008 2007
Contractual backlog:
Boeing Military Aircraft 26,311 25,710 22,974
Network & Space Systems 7,746 8,868 9,207
Global Services & Support 11,967 10,707 9,607
Total Boeing Defense, Space & Security 46,024 45,285 41,788
Total contractual backlog $296,500 $323,860 $296,964
Unobligated backlog $ 19,058 $ 28,066 $ 30,173
Contractual backlog of unfilled orders excludes purchase options, announced orders for which
definitive contracts have not been executed, and unobligated U.S. and non-U.S. government contract
funding. The decrease in contractual backlog during 2009 was due to deliveries in excess of orders,
changes in projected revenue escalation and cancellations of orders. The increase in backlog during
2008 was due to orders in excess of deliveries for our 737, 767, 777 and 787 programs.
Unobligated backlog includes U.S. and non-U.S. government definitive contracts for which funding
have not been authorized. The decrease in unobligated backlog during 2009 is primarily due to
decreases at BDS of $8,904 million compared with 2008 partly due to a partial termination for
convenience by the U.S. Army of the Brigade Combat Team Modernization (BCTM) (formerly the
Future Combat Systems (FCS)) System Development and Demonstration contract relating to Manned
Ground Vehicles and associated systems and equipment. Approved funding of existing multi-year
contracts including the BCTM, V-22, Chinook, Proprietary and Ground-Based Midcourse Defense
(GMD) programs also reduced unobligated backlog. The decrease in Unobligated backlog during 2008
is primarily due to decreases at BDS of $2,174 million compared with 2007 primarily due to funding of
existing multi-year contracts including the F/A-18, BCTM and F-22 programs. These decreases were
partially offset by multi-year procurement contracts awarded on the V-22 and Chinook programs.
20
NLRB-FOIA-00005821
Segment Results of Operations and Financial Condition
Business Environment and Trends
Airline Industry Environment 2008 and 2009 were extremely challenging for the worlds airlines as
key external business factors (oil prices, economic growth, exchange rates, financing terms)
experienced high levels of volatility. In the first half of 2008, airlines focused on adapting to spiking oil
prices which peaked close to $150/barrel. In autumn 2008, the airlines focus shifted to the fallout of
the global credit crisis and recession as fuel prices fell below $40/barrel for the first time since 2004,
and in 2009 passenger and cargo traffic experienced their worst ever declines. This business
environment curtailed the airline industry profit recovery that started in 2006. As a result, the global
airline industry has now reported losses in seven out of the last ten years, and over 30 airlines have
entered bankruptcy since the beginning of 2008.
In this challenging environment, airlines are adapting their operations to meet the realities of the
markets in which they operate. Airlines reduced global passenger capacity by 2% in 2009 through a
combination of frequency and route cuts in unprofitable markets, lower daily airplane utilization (flight
hours per day) and parking/scrapping of older generation airplanes. Airlines are also replacing older
less fuel efficient airplanes, reducing non-fuel costs and finding new ways to partner through alliances
or via mergers and acquisitions.
These conditions have caused customers to request cancellations, modifications, or rescheduling of
their existing orders and advance payment schedules to meet revised fleet plans or address financing
and cash flow issues. Whether such requests will result in a material adverse impact on our earnings,
cash flow or financial position depends on a number of factors including whether the request is
granted, the type of aircraft, how much compensation is paid to us for costs already incurred and our
ability to reschedule other orders to replace those canceled, modified, or rescheduled.
Near-term global airline industry indicators are improving although many uncertainties persist. Global
economic recovery has begun. Although it is expected to vary significantly by region both in terms of
speed and magnitude, world economic growth is forecast to grow moderately in 2010 following
contraction in 2009. As a result, airline industry forecasts generally indicate global passenger traffic
returning close to 2008 levels in 2010 with many emerging markets posting growth over 2009. Air
cargo traffic is forecast to grow above the long-term trend rates in 2010 following two years of
contraction which have taken traffic back to 2002 and 2003 levels. Due to these improving demand
conditions, airlines are expected to see significantly smaller financial losses globally in 2010.
Beyond the near-term market uncertainties, the long-term outlook for the industry remains positive due
to the fundamental drivers of air travel growth: economic growth and the increasing propensity to travel
due to increased trade, globalization and improved airline services driven by liberalization of air traffic
rights between countries. Our 20-year forecast is for a long-term average growth rate of 5% per year
for passenger and cargo traffic based on a projected average annual worldwide real economic growth
rate of 3%. Based on long-term global economic growth projections, and factoring in increased
utilization of the worldwide airplane fleet and requirements to replace older airplanes, we project a $3.2
trillion market for 29,000 new airplanes over the next 20 years.
The industry remains vulnerable to near-term exogenous developments including disease outbreaks
(such as avian or H1N1 flus), terrorism and increased global environmental regulations.
Industry Competitiveness The commercial jet aircraft market and the airline industry remain
extremely competitive. We expect the existing long-term downward trend in passenger revenue yields
worldwide (measured in real terms) to continue into the foreseeable future. Market liberalization in
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Europe and Asia has enabled low-cost airlines to continue gaining market share. These airlines have
increased the downward pressure on airfares. This results in continued cost pressures for all airlines
and price pressure on our products. Major productivity gains are essential to ensure a favorable market
position at acceptable profit margins.
Continued access to global markets remains vital to our ability to fully realize our sales potential and
long-term investment returns. Approximately 10% of Commercial Airplanes contractual backlog in
dollar terms is with U.S. airlines.
We face aggressive international competitors who are intent on increasing their market share. They
offer competitive products and have access to most of the same customers and suppliers. Airbus has
historically invested heavily to create a family of products to compete with ours. Regional jet makers
Embraer and Bombardier, coming from the less than 100-seat commercial jet market, continue to
develop larger and more capable airplanes. Additionally, other competitors from Russia, China and
Japan are likely to enter the 70 to 190 seat aircraft market over the next few years. This market
environment has resulted in intense pressures on pricing and other competitive factors and we expect
these pressures to continue or intensify in the coming years.
Worldwide, airplane sales are generally conducted in U.S. dollars. Fluctuating exchange rates affect
the profit potential of our major competitors, all of whom have significant costs in other currencies. A
decline of the U.S. dollar relative to their local currencies as experienced in the second half of 2009
puts pressure on competitors revenues and profits. Competitors often respond by aggressively
reducing costs and increasing productivity, thereby improving their longer-term competitive posture.
Airbus has announced such initiatives targeting overhead cost savings, a reduction in its development
cycle and a significant increase in overall productivity through 2012. If the U.S. dollar strengthens
again, Airbus can use the improved efficiency to fund product development, gain market share through
pricing and/or improve earnings.
We are focused on improving our processes and continuing cost-reduction efforts. We continue to
leverage our extensive customer support services network which includes aviation support, spares,
training, maintenance documents and technical advice for airlines throughout the world. This enables
us to provide a higher level of customer satisfaction and productivity. These efforts enhance our ability
to pursue pricing strategies that enable us to price competitively.
Operating Results
Revenues $ 34,051 $ 28,263 $ 33,386
% of Total company revenues 50% 46% 50%
(Loss)/earnings from operations $ (583) $ 1,186 $ 3,584
Operating margins -1.7% 4.2% 10.7%
Research and development $ 5,383 $ 2,838 $ 2,962
Contractual backlog $250,476 $278,575 $255,176
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Revenues
Year-over-year changes in Revenue are shown in the following table:
2009
vs. 2008
2008
vs. 2007
New airplane sales $6,129 $(4,876)
Aircraft trading (33) (264)
Commercial aviation services business (308) 17
Total $5,788 $(5,123)
The increase in revenue of $5,788 million in 2009 from 2008 is primarily attributable to higher new
airplane deliveries partially offset by lower intercompany revenues. Prior year revenues were
negatively impacted by the 2008 IAM strike. The decrease in revenues from commercial aviation
services business was driven by economic conditions.
The decrease in revenue of $5,123 million in 2008 from 2007 is primarily attributable to lower new
airplane deliveries. The IAM strike resulted in 104 airplane deliveries moving out of 2008 which
reduced 2008 revenues by $6,406 million. The strike impact was partially offset by higher
intercompany revenues of $804 million, and higher pre-strike deliveries, net of model mix changes, of
$726 million. Aircraft trading activity decreased by $264 million as a result of fewer sales of used
aircraft. Revenues in commercial aviation services business increased by $17 million driven by
increased spares and services revenue offset by decreased passenger to freighter conversions.
Commercial jet aircraft deliveries as of December 31, were as follows:
737 747 767 777 Total
2009
Cumulative Deliveries 3,128 1,418 982 836
Deliveries 372* 8 13 88 481
2008
Deliveries 290* 14 10* 61 375
2007
Deliveries 330* 16 12* 83 441
* Intercompany deliveries included five 737 aircraft in 2009, two 767 aircraft and two 737 aircraft in
2008 and one 767 aircraft and one 737 aircraft in 2007.
Earnings from operations for 2009 decreased by $1,769 million when compared to 2008, primarily due
to the reclassification from inventory to research and development expense of $2,481 million related to
the three 787 flight test aircraft previously recorded as inventory as of July 31, 2009. Additional
production costs incurred between August and December 2009 of $212 million related to those flight-
test airplanes were also included in research and development expense. Those amounts were partially
offset by a $148 million decrease in other research and development expense. The decrease in
earnings is also attributable to reach-forward losses on the 747 program which grew by $1,352 million
in 2009 compared with losses of $685 million in 2008. The 2009 reach-forward losses were primarily
due to increased production costs, reductions in projected delivery price increases associated with
escalation and the difficult market conditions affecting the 747-8. Lower commercial aviation services
23
NLRB-FOIA-00005824
revenues and margins reduced earnings by $245 million. Higher infrastructure cost allocations related
to the 787 and 747-8 schedule delays announced in 2008 and 2009 and infrastructure costs incurred
during the 2008 IAM strike reduced earnings by $199 million. Increased period and other costs
reduced earnings by $47 million. These decreases were partially offset by increased earnings of
$1,934 million related to new airplane deliveries.
Earnings from operations decreased by $2,398 million in 2008 when compared to 2007, with operating
margins decreasing 6.5 percentage points to 4.2%. Lower new airplane deliveries, partially offset by
higher intercompany revenues, reduced earnings by $1,400 million. A charge for a reach-forward loss
on the 747 program resulting from increases to estimated costs for development and production of
747-8 derivatives reduced 2008 earnings by $685 million. Infrastructure cost allocations related to the
787 and 747-8 schedule delays and infrastructure costs incurred during the IAM strike reduced
earnings by $287 million. The 787 and 747-8 schedule delays resulted in production programs
receiving larger allocations of current and future infrastructure costs and reduced margins on 2008
deliveries, while the program infrastructure costs incurred during the IAM strike decreased margins on
airplanes delivered during the second half of the year. Increased period and other costs reduced
earnings by $108 million. A reduction in commercial aviation services volume and mix-related earnings
of $42 million was primarily due to a decrease in volume on passenger to freighter conversion
programs. Lower research and development costs improved earnings by $124 million.
Backlog Firm backlog represents orders for products and services where no contingencies remain
before Boeing and the customer are required to perform. Backlog does not include prospective orders
where customer controlled contingencies remain, such as the customers receiving approval from their
Board of Directors, shareholders or government and completing financing arrangements. All such
contingencies must be satisfied or have expired prior to recording a new firm order even if satisfying
such conditions is highly certain. Firm orders exclude options. A number of our customers may have
contractual remedies that may be implicated by program delays. We continue to address customer
claims and requests for other contractual relief as they arise. However, once orders are included in firm
backlog, orders remain in backlog until canceled or fulfilled, although the value of orders is adjusted as
changes to price and schedule are agreed to with customers.
The decrease in contractual backlog during 2009 was due to deliveries in excess of orders, changes in
projected revenue escalation and cancellations of orders. The increase in backlog during 2008 was
due to orders in excess of deliveries for our 737, 767, 777 and 787 programs.
Accounting Quantity The accounting quantity is our estimate of the quantity of airplanes that will be
produced for delivery under existing and anticipated contracts and is limited by the ability to make
reasonably dependable estimates of the revenue and costs of these contracts. It is a key determinant
of the gross margins we recognize on sales of individual airplanes throughout a programs life.
Estimation of each programs accounting quantity takes into account several factors that are indicative
of the demand for that program, including firm orders, letters of intent from prospective customers and
market studies. We review our program accounting quantities quarterly.
Commercial aircraft production costs include a significant amount of infrastructure costs, a portion of
which does not vary with production rates. As the amount of time needed to produce the accounting
quantity increases, the average cost of the accounting quantity also increases as these infrastructure
costs are included in the total cost estimates. This has the effect of decreasing the gross margin and
related earnings provided other factors do not change.
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The accounting quantity for each program may include units that have been delivered, undelivered
units under contract, and units anticipated to be under contract in the reasonable future (anticipated
orders). In developing total program estimates all of these items within the accounting quantity must be
considered. The table below provides details as of December 31:
Program
737 747 767 777 787
2009
Program accounting quantities 4,600 1,499 1,035 1,100 *
Undelivered units under firm orders 2,076 108 59 281 851
Cumulative firm orders
2
5,204 1,526 1,041 1,117
2008
Program accounting quantities 4,200 1,499 1,023 1,050 *
Undelivered units under firm orders
1
2,270 114 70 350 910
2
5,026 1,524 1,039 1,098
2007
Program accounting quantities 3,800 1,474 998 950 *
Undelivered units under firm orders 2,076 125 52 357 817
2
4,542 1,521 1,011 1,044
* The accounting quantity for the 787 program will be determined in the year of first airplane
delivery, targeted for 2010.
1
Undelivered units are not adjusted for cancellations subsequent to December 31, 2008.
2
Cumulative firm orders represent the cumulative number of commercial jet aircraft deliveries plus
undelivered firm orders.
737 Program The accounting quantity for the 737 program increased by 400 units during 2009 due to
the programs normal progression of obtaining additional orders and delivering aircraft. Production
rates remained unchanged in 2009.
747 Program There was no change in the accounting quantity for the 747 program during 2009.
In 2008, we recorded a charge of $685 million to recognize a reach-forward loss. The charge was
primarily related to higher than anticipated costs due to late changes to wing design which drove new
load requirements into the fuselage and created other statement of work changes for our suppliers.
During 2009, additional charges of $1,352 million were recorded to recognize reach-forward losses.
During the first quarter of 2009, we recorded $347 million of a reach-forward loss due to a reduction in
projected delivery price increases associated with escalation and an increase in estimated costs due to
our decisions to reduce twin-aisle production rates which impact production rates beginning in 2010.
During the third quarter of 2009 we increased the reach-forward loss on the 747 program by $1,005
million. Of this amount, $643 million was caused by higher estimated production costs, including both
additional internal production costs and higher supplier expenses, attributable to greater than expected
re-work and disruption in manufacturing due to late maturity of engineering designs as well as the
limited availability of engineering resources. The remaining $362 million was primarily due to
challenging cargo market conditions and our related decision to defer a planned increase in the 747-8
production rate, which drove higher allocations of fixed costs and caused us to incur volume-based
penalties to suppliers.
First flight of the 747-8 Freighter is expected to occur during the first quarter of 2010, with the flight test
program expected to take place in 2010. First delivery of the 747-8 Freighter is expected in the fourth
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quarter of 2010. First delivery of the Intercontinental passenger variant remains scheduled for the
fourth quarter of 2011. The gap between the delivery of the last 747-400, which occurred in 2009, and
first deliveries of the 747-8 will result in lower 747 program revenues.
767 Program The accounting quantity for the 767 program increased by 12 units during 2009. In April
2009, we announced a delay in previous plans to increase the production rate.
777 Program The accounting quantity for the 777 program increased by 50 units during 2009. Delivery
of the first 777 Freighter occurred in February 2009. In April 2009, we announced that we will lower the
production rate on our 777 airplane program, affecting deliveries beginning in June 2010. This lower
production rate will decrease revenues and earnings in 2010 and 2011.
787 Program We announced on June 23, 2009 the necessity to reinforce an area of structure at the
side-of-body section of the airplane. During the fourth quarter, we completed the modifications on the
first two flight-test airplanes and the full-scale static test airplane. First flight of the 787 occurred on
December 15, 2009. A second 787 completed its first test flight on December 22, 2009. Six aircraft in
total will be involved in the flight test program, which is expected to result in certification of the 787-8 in
the fourth quarter of 2010. First delivery is also expected to occur in the fourth quarter of 2010. We
continue to work toward our planned increases in 787 production rates as well as the timely
introduction of the 787-9 derivative.
During 2009, we concluded that the first three flight-test 787 aircraft could not be sold as previously
anticipated due to the inordinate amount of rework and unique and extensive modifications made to
those aircraft. As a result, costs of $2,481 million previously recorded as program inventory as of
July 31, 2009 were reclassified to research and development expense. Additional production costs
incurred between August and December 2009 of $212 million related to these flight-test airplanes were
also included in research and development expense. We will continue to incur research and
development costs on these flight test aircraft in 2010. We believe that the other three additional 787
flight test aircraft are commercially saleable and we continue to include costs related to those aircraft in
program inventory at December 31, 2009. If we determine that one or more of the other flight test
aircraft cannot be sold we may incur additional charges.
On July 30, 2009, we acquired the business, assets and operations of Vought Aircraft Industries, Inc.s
(Vought) 787 business conducted at North Charleston, South Carolina. The facility produces aft
fuselage sections, including the fabrication, assembly and systems installation. See Note 2. On
December 22, 2009, we acquired Alenia North Americas 50% ownership interest in Global
Aeronautica. As a result of the transaction, we are the sole owner of this entity. Located adjacent to
Boeing Charleston, Global Aeronautica is an integrator of the 787 mid-fuselage sections.
On October 28, 2009 we announced the North Charleston facility as the location for a second final
assembly site for the 787 Dreamliner program. A groundbreaking ceremony was held November 20,
2009 to mark the start of construction. Until the additional 787 assembly line is fully operational, we will
establish transitional surge capability at our Everett, Washington, location to facilitate the planned
introduction of the 787-9, the first derivative model of the 787 family. When the additional line in North
Charleston is fully operational, the surge capability in Everett will be phased out.
Looking beyond first flight, we continue to monitor and address other areas of challenge associated
with assembly of initial airplanes including management of our extended global supply chain,
completion and integration of traveled work as well as weight and systems integration. Efforts continue
to ensure we remain focused on satisfying customer mission and performance needs in light of the
anticipated weight of their respective aircraft.
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We continue to work with our customers and suppliers to assess the specific impacts of schedule
changes including delivery delays and supplier assertions. A number of our customers have
contractual remedies for schedule delays and/or performance. We continue to address customer
claims and requests for other contractual relief as brought forth.
The cumulative impacts of the flight test delays, production challenges, schedule delays and customer
and supplier impacts create significant pressure on program revenue and cost estimates. We continue
to assess our mitigation plans and cost reduction efforts to address these pressures.
Fleet Support We provide the operators of our commercial airplanes with assistance and services to
facilitate efficient and safe aircraft operation. Collectively known as fleet support services, these
activities and services begin prior to aircraft delivery and continue throughout the operational life of the
aircraft. They include flight and maintenance training, field service support costs, engineering services
and technical data and documents. The costs for fleet support are expensed as incurred and have
been historically less than 1.5% of total consolidated costs of products and services. This level of
expenditures is anticipated to continue in the upcoming years. These costs do not vary significantly
with current production rates.
Research and Development The following chart summarizes the time horizon between go-ahead and
certification/initial delivery for major Commercial Airplanes derivatives and programs.
Go-ahead and Certification/Delivery
787-8
787-9
777-200LR*
777-F
747-8 Freighter
747-8 Intercontinental
2005 2006 2007 2008 2009 2010 2011 2012 2013
* Go-ahead prior to 2005
Our Research and development expense increased by $2,545 million in 2009. This was due to
reclassification to research and development expense of $2,693 million of production costs related to
the three 787 flight test aircraft and $50 million of lower supplier development cost sharing payments,
partially offset by a $198 million decrease of other research and development expense.
Our Research and development expense decreased $124 million in 2008. Research and development
expense is net of development cost sharing payments received from suppliers. The decrease in
research and development spending for 2008 was primarily due to reduced 787 product development
activities partially offset by $278 million of increased spending on the 747-8 program and $80 million of
lower supplier development cost sharing payments.
Additional Considerations
The 787 and 747-8 programs highlight the risks that are always inherent in new airplane programs and
new derivative airplanes, particularly as both the 747-8 and the 787 begin the demanding flight test and
certification phases of program development. Costs related to development of new programs and
derivative airplanes are expensed as incurred. Costs to produce new aircraft are included in inventory
and accounted for using program accounting. Airplane programs have risk for reach-forward losses if
our estimated production costs exceed our estimated program revenues for the accounting quantity.
Generally commercial airplanes are sold on a firm fixed-price basis with an indexed price escalation
clause and are often sold several years before scheduled delivery. Each customer purchase
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agreement contains an escalation clause to account for the effects of economic fluctuations over the
period of time from airplane sale to airplane delivery. A price escalation formula based on pre-defined
factors is used to determine the final price of the airplane at the time of customer delivery. While firm
fixed-price contracts allow us to benefit from cost savings, they also expose us to the risk of cost
overruns. Many new airplanes and derivatives have highly complex designs, utilize exotic materials
and require extensive coordination and integration with supplier partners. As technical or quality issues
arise, such as issues experienced on the 787 and 747-8 programs, we may experience schedule
delays and higher costs to complete new programs and derivative aircraft. Additionally, price escalation
factors may also impact margins by reducing the estimated price of airplanes delivered in the future.
There are other factors that could also result in lower margins or a material charge if a program has or
is determined to have reach-forward losses. These include: changes to the program accounting
quantity, production costs and rates, capital expenditures and other costs associated with increasing or
adding new production capacity, learning curve, anticipated cost reductions, flight test and certification
schedules, costs and schedule for derivative airplanes and status of customer claims, supplier
assertions and other contractual negotiations. While we believe the cost and revenue estimates
incorporated in the financial statements are appropriate, the technical complexity of these programs
creates financial risk as additional completion costs may become necessary or scheduled delivery
dates could be extended, which could trigger termination provisions, order cancellations or other
financially significant exposure.
On January 7, 2010, we announced that Integrated Defense Systems will begin operating under the
name Boeing Defense, Space & Security (BDS).
BDS consists of three capabilities-driven businesses: Boeing Military Aircraft (BMA), Network & Space
Systems (N&SS) and Global Services & Support (GS&S). Additionally, BDS Phantom Works supports
all three businesses via product development, rapid prototyping and customer engagement through
experimentation and enterprise technology investment strategies.
Defense Environment Overview The U.S. continues to balance funding priorities to plan for the
broadest possible range of operations that include homeland defense, natural disasters, stabilization
efforts, counterinsurgency and counterterrorism operations, or nation state aggressors with growing
sophistication and military means. The U.S. Department of Defense (U.S. DoD) faces the simultaneous
requirements to recapitalize important capabilities and transform the force to meet the changing
national security as articulated in the 2010 Quadrennial Defense Review. All of this must be carried out
against a backdrop of significant competing national priorities including the economic crisis and
healthcare reform. We anticipate that the national security environment will remain dynamic and
challenging well into this decade trending with the threat environment.
Government policies are impacting the defense environment including defense acquisition reform,
more insourcing, concerns over industrial base, a shift in emphasis towards more affordable solutions
and emphasis on increasing diplomatic efforts to expand and strengthen our alliances.
Although the U.S. DoD budget has grown substantially over the past decade, we expect the total
budget growth rate to level off over the next several years due to shifting priorities and budget
pressures. The fiscal year 2010 discretionary budget request of $660 billion includes an Overseas
Contingency Operations (OCO) budget of $130 billion, with an additional $33 billion requested.
The fiscal year 2011 discretionary budget of $708 billion includes OCO budget of $159 billion.
Procurement is expected to increase, while Research and Development accounts decrease, facing
increasing budgetary pressures due to growing requirements from Operations and Maintenance (O&M)
and personnel costs tied to U.S. commitments overseas. However, this trend is partially offset by
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equipment recapitalization efforts and continued demand for systems development. The near-term
forecast of the defense budget environment shows limited growth in the 2011 to 2015 period for
investment efforts. Though opportunities may exist following U.S. troop draw-downs in Iraq, they are
offset by recent increases in Afghanistan. We continue to see pressure to reduce OCO requests that
have been used to cover the ongoing costs of the wars.
It is unlikely that the U.S. DoD will be able to fully fund all programs of record already in development
as well as new initiatives. This imbalance between future costs of programs and expected funding
levels is not uncommon in the U.S. DoD and is routinely managed by internally adjusting priorities and
schedules, restructuring programs, and lengthening production runs to meet the constraints of
available funding and occasionally by cancellation of programs. We expect the U.S. DoD will respond
to future budget constraints by focusing on affordability strategies from acquisition reform and
emphasizing utilization of commercial off-the-shelf solutions and network-enabled operations. These
strategies will be enabled through persistent intelligence, surveillance, and reconnaissance (ISR), long-
range strike, special operations, unmanned systems, cyber security, and precision-guided kinetic and
non-kinetic weapons, electronic warfare, as well as selected outsourcing of logistics and support
activities to improve overall effectiveness while maintaining control over costs.
Other nations continue to experience growing demands for new equipment to address operational
requirements, aging inventories, and changing threat environments. Greater U.S. reliance on allies and
coalition partners places additional pressure on nations to emphasize acquisition of material that is
deployable, survivable, and interoperable with the international community. European nations are
struggling to meet defense investment needs as budget deficits create greater pressure on resources.
Though regional financial concerns exist, Middle Eastern military markets remain robust with stable oil
prices and persistent regional security concerns sustaining continued defense investment. In Asia,
growth is slowing with nations pursuing select acquisitions to address growing regional threats. The
international market will continue to be affected by global economic challenges. However, the
continuing threat environment should keep demand stable in 2010.
Missile Defense Environment The proliferation of short- and medium-range ballistic missiles is
considered the greatest current threat to security and is driving missile defense spending. As a result,
the near-term focus for growth is in regional and tactical BMD systems.
Civil Space Transportation and Exploration Environment The National Aeronautics and Space
Administration (NASA) budget is focused on technology development and demonstration programs,
the International Space Station, and new initiatives associated with space exploration. NASA is
developing new approaches to space exploration with added emphasis on commercial spaceflight
systems, space technology development and robotic missions. NASA is also enhancing its focus on
climate change and aeronautics research.
Homeland Security Environment The continuing threat from terrorism is the key driver for the
homeland security market. Key growth areas include aviation security, border security, maritime
security and cyber security. Additionally, the U.S. government is focused on increasing cooperation
with state and local institutions.
Commercial Satellite Environment The commercial satellite market is experiencing improvement in
market demand, partly driven by strong U.S. government demand for commercial satellite systems and
services, but the overall sector continues to be characterized by overcapacity creating strong
competitive pressures on pricing.
Adjacent Market Environment We see growth opportunities across a number of adjacent markets
with both U.S. DoD and other U.S. government customers. These markets, including services,
unmanned systems, intelligence, cyber, and energy, represent key development areas which support
the current engagements overseas as well as emerging national security issues.
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Services Growth in services is anticipated both domestically and internationally, as customers have a
wide variety of needs, including information services, platform-related services, facility management,
infrastructure services and logistics command and control.
Unmanned Systems The unmanned market continues to see growth in all classes of platforms due to
the high demand from the U.S. military in Southwest Asia. We anticipate this growth increasing as
unmanned systems continue to provide critical mission functions to the war fighter with affordability,
persistence, and accuracy.
Intelligence We see the intelligence market growing based on the demands of data collection,
dissemination, and analysis driven by the conflicts in Southwest Asia. Growth in data fusion, data
management, and information sharing is expected as the use of ISRassets increase.
Cyber The demand for defensive, offensive, and exploit operations in the emerging cyber market
provides unique growth opportunities as explicit needs are further defined by customers. Cyber threats
from both state and non-state actors represent a critical national security issue. The U.S. government
is taking significant steps to mitigate the cyber threat to the U.S. DoD and to U.S. critical infrastructure.
Energy We anticipate the energy market will emerge with growth potential. As energy volatility
becomes more substantial, the need for energy management, infrastructure security, and scenario
modeling will increase accordingly. The U.S. DoD, including individual service branches, is also
actively engaged in developing energy policy guidance and comprehensive plans from which to
execute programs.
BDS Realignment
Effective January 1, 2009, 2008 and 2007 certain programs were realigned among BDS segments. In
addition, effective January 1, 2008, certain environmental remediation contracts (formerly included in
N&SS) were transferred to the Other Segment. Business segment data for all periods presented have
been adjusted to reflect the realignment. See Note 21.
Operating Results
Revenues $33,661 $32,047 $32,052
Earnings from operations $ 3,299 $ 3,232 $ 3,440
Operating margins 9.8% 10.1% 10.7%
Research and development $ 1,101 $ 933 $ 848
Unobligated backlog $18,815 $27,719 $29,893
Since our operating cycle is long-term and involves many different types of development and
production contracts with varying delivery and milestone schedules, the operating results of a particular
year, or year-to-year comparisons of revenues and earnings, may not be indicative of future operating
results. In addition, depending on the customer and their funding sources, our orders might be
structured as annual follow-on contracts, or as one large multi-year order or long-term award. As a
result, period-to-period comparisons of backlog are not necessarily indicative of future workloads. The
following discussions of comparative results among periods should be viewed in this context.
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Revenues BDS revenues increased by $1,614 million in 2009 compared to 2008, primarily due to
higher revenues in GS&S and BMA, partially offset by decreases in N&SS. BDS revenues were
unchanged in 2008 compared to 2007 as revenue growth in GS&S was offset by decreases in BMA
and N&SS.
Operating Earnings BDS operating earnings in 2009 increased by $67 million compared with 2008
primarily due to higher earnings in the BMA segment, partially offset by lower earnings in the N&SS
segment. BDS earnings decreased by $208 million in 2008 compared with 2007 primarily due to lower
earnings in the BMA segment resulting from a $248 million charge taken on the AEW&C program in
the second quarter partially offset by higher earnings in the N&SS segment.
Backlog Total backlog is comprised of contractual backlog, which represents work we are on contract
to perform for which we have received funding, and unobligated backlog, which represents work we
are on contract to perform for which funding has not yet been authorized and appropriated. BDS total
backlog decreased 11% in 2009, from $73,004 million to $64,839 million, partly due to a partial
termination for convenience from the U.S. Army of the BCTM (formerly FCS) System Development and
Demonstration contract relating to Manned Ground Vehicles and associated systems and equipment.
Current year deliveries and sales on multi-year contracts awarded in prior years also contributed to the
backlog reduction.
For further details on the changes between periods, refer to the discussions of the individual segments
below.
Our business includes a variety of development programs which have complex design and technical
challenges. Many of these programs have cost-type contracting arrangements. In these cases the
associated financial risks are primarily in lower profit rates or program cancellation if milestones and
technical progress are not accomplished. Examples of these programs include Airborne Laser,
EA-18G, Family of Beyond Line-of-Sight Terminals (FAB-T), BCTM (formerly FCS), GMD, Joint
Tactical Radio System (JTRS), P-8A and Proprietary programs.
Some of our development programs are contracted on a fixed-price basis. Many of these programs
have highly complex designs. As technical or quality issues arise, we may experience schedule delays
and cost impacts, which could increase our estimated cost to perform the work or reduce our estimated
price, either of which could result in a material charge. These programs are ongoing, and while we
believe the cost and fee estimates incorporated in the financial statements are appropriate, the
technical complexity of these programs creates financial risk as additional completion costs may
become necessary or scheduled delivery dates could be extended, which could trigger termination
provisions, the loss of satellite in-orbit incentive payments, or other financially significant exposure.
These programs have risk for reach-forward losses if our estimated costs exceed our estimated
contract revenues. Examples of these programs include AEW&C, International KC-767 Tanker,
commercial and military satellites, Vigilare and High Frequency Modernisation.
31
NLRB-FOIA-00005832
Boeing Military Aircraft
Operating Results
Revenues $14,057 $13,311 $13,499
Earnings from operations $ 1,513 $ 1,277 $ 1,607
Research and development $ 541 $ 479 $ 445
Unobligated backlog $ 9,322 $10,048 $ 8,587
Revenues BMA revenues increased 6% in 2009 and decreased 1% in 2008. The increase of $746
million in 2009 was primarily due to higher deliveries and volume on the Apache, V-22 and Chinook
rotorcraft programs and the F-18 and Proprietary programs, partly offset by lower volume on the F-22
and several weapons programs. The decrease of $188 million in 2008 is primarily driven by lower F-22,
Apache, F-18 and Chinook revenue partially offset by increased deliveries on F-15 and International
KC-767 Tanker and C-17 contract mix.
Deliveries of new-build production aircraft, excluding remanufactures and modifications, were as
follows:
F/A-18 Models 49 45 44
F-15E Eagle 13 14 12
C-17 Globemaster 16 16 16
International KC-767 Tanker 2 2
CH-47 Chinook 11 12 10
T-45TS Goshawk 7 7 9
AH-64 Apache 23 3 17
C-40A Clipper 3
Total new-build production aircraft 121 99 111
Operating Earnings BMA operating earnings increased by $236 million in 2009 partly due to higher
deliveries on several programs and volume, partially offset by a change in delivery mix. Operating
earnings in both years were negatively impacted by charges on the AEW&C and International KC-767
Tanker programs. BMA earnings decreased by $330 million in 2008 primarily due to charges taken on
the AEW&C program. Delivery mix and lower volume also contributed to the decrease in 2008.
Research and Development The BMA segment continues to focus research and development
resources to leverage customer knowledge, technical expertise and system integration of manned and
unmanned systems that provide innovative solutions to meet the warfighters enduring needs.
Research and development expense in 2009 increased by 13% over 2008 primarily due to proprietary
programs which was partially offset by lower international tanker development costs. Research and
development activities utilize our capabilities in architectures, system-of-systems integration and
weapon systems technologies to develop solutions which are designed to enhance our customers
capabilities in the areas of mobility, precision effects, situational awareness and survivability.
Investments in prototyping allow us to offer low-risk programs to our customers. The products of our
research and development support both new manned and unmanned systems as well as enhanced
versions of existing fielded products. Investments support vertical integration of our product line in
32
NLRB-FOIA-00005833
areas like autonomous operation of unmanned vehicles, advanced sensors and Electronic Warfare.
These efforts focus on increasing mission effectiveness, interoperability, reliability and reducing the
cost of ownership.
Backlog BMA total backlog in 2009 was virtually unchanged from 2008. Backlog increases due to
2009 current year orders for C-17, P-8 India and Chinook aircraft were offset by revenues recognized
on multi-year contracts received in prior years with the largest decrease in the F/A-18 program. Total
backlog increased by 13% in 2008 compared with 2007 primarily due to an increase in the V-22,
Chinook and F-15 program backlog. These increases were partially offset by deliveries and sales on
multi-year contracts awarded in prior years with the largest decreases in the C-17 and F/A-18
programs.
Items which could have a future impact on BMA operations include the following:
AEW&C During 2009, 2008 and 2007, we recorded charges increasing the reach-forward losses on
the AEW&C programs in Australia and Turkey by $133 million, $308 million and $81 million,
respectively. The 2009 charge primarily related to delivery schedule delays. The 2008 charge, primarily
related to our program in Australia, was due to subsystem development issues on the electronic
warfare and ground support systems and the additional time required for integration testing. The
AEW&C development program, also known as Wedgetail in Australia, Peace Eagle in Turkey and
Peace Eye in the Republic of Korea, consists of 737-700 aircraft outfitted with a variety of command
and control and advanced radar systems, some of which have never been installed on an airplane
before. Wedgetail includes six aircraft and Peace Eagle and Peace Eye include four aircraft each.
During the fourth quarter of 2009, two Wedgetail aircraft were provided to Australia for familiarization
and training. Wedgetail final delivery and customer acceptance is scheduled to begin in late 2010 and
extend through the second quarter of 2011. These are advanced and complex fixed-price development
programs involving technical challenges at the individual subsystem level and in the overall integration
of these subsystems into a reliable and effective operational capability. We believe that the cost and
revenue estimates incorporated in the financial statements are appropriate; however, the technical
complexity of the programs creates financial risk as additional completion costs may be necessary or
scheduled delivery dates could be delayed.
International KC-767 Tanker Program During 2009, 2008 and 2007, we recorded charges increasing
the reach-forward losses in the International KC-767 Tanker programs by $78 million, $85 million and
$152 million, respectively. The 2007 charge was partially offset at the consolidated level. The
International KC-767 Tanker program includes four aircraft for the Italian Air Force and four aircraft for
the Japanese Air Self Defense Force. The final delivery to Japan was made in December 2009. The
Italian International KC-767 program is ongoing, and while we believe the revenue and cost estimates
incorporated in the financial statements are appropriate, the technical complexity of the program
creates financial risk as additional completion and development costs may be necessary or remaining
scheduled delivery dates could be delayed.
C-17 See the discussion of C-17 in Note 11 Liabilities, Commitments and Contingencies.
33
NLRB-FOIA-00005834
Network & Space Systems
Operating Results
Revenues $10,877 $11,346 $11,481
Earnings from operations $ 839 $ 1,034 $ 863
Contractual backlog $ 7,746 $ 8,868 $ 9,207
Unobligated backlog $ 9,187 $16,981 $20,134
Revenues N&SS revenues decreased 4% in 2009 and 1% in 2008. N&SS revenues are expected to
decrease in 2010, primarily due to lower revenues on the BCTM and GMD programs. The decrease of
$469 million in 2009 is primarily due to lower volume on the GMD, Intelligence and Security Systems,
and Proprietary programs, partly offset by higher volume on several satellite programs. The decrease
of $135 million in 2008 is primarily due to decreased revenues in BCTM (formerly FCS), Proprietary
and satellite programs partially offset by increased revenues in the SBInet program.
Delta launch and new-build satellite deliveries were as follows:
Delta II Commercial 1 2 3
Delta IV Commercial 1
Satellites 6 1 4
Operating Earnings N&SS operating earnings decreased by $195 million in 2009 primarily due to
lower revenues and charges related to the Sea Launch bankruptcy. Earnings in 2009 were also
reduced by charges related to the settlement of a satellite contract dispute and indemnification of Delta
II inventory. Earnings in 2008 included a favorable settlement on a civil satellite program. N&SS
earnings increased by $171 million in 2008 primarily due to increased earnings from our investment in
United Launch Alliance (ULA). N&SS operating earnings include equity earnings of $164 million, $178
million and $74 million from the United Space Alliance joint venture and the ULA joint venture in 2009,
2008, and 2007, respectively.
Research and Development The N&SS research and development funding remains focused on the
development of communications, command and control, computers, intelligence, surveillance and
reconnaissance systems (C4ISR); that support a network-enabled architecture approach for our
customers. We are investing in capabilities to enhance connectivity between existing and new air/
ground and maritime platforms, to increase communications availability, utility and bandwidth through
more robust space systems, and to leverage innovative networking and ISRconcepts. Key programs in
this area include BCTM, JTRS, Wideband Global Satellite System Ares, FAB-T and SBInet.
Investments were also made to develop concepts and capabilities related to cyber and security
products, as well as the development of next-generation space and intelligence systems. Along with
increased funding to support these network-enabled capabilities, we also maintained our investment
levels in missile defense, directed energy and advanced exploration systems.
Backlog N&SS total backlog decreased by 34% in 2009 compared with 2008 partly due to the partial
termination for convenience from the U.S. Army of the BCTM (formerly FCS) System Development and
Demonstration contract related to Manned Ground Vehicles and associated systems and equipment.
Current year deliveries and sales on multi-year contracts awarded in prior years including BCTM,
34
NLRB-FOIA-00005835
GMD, and Proprietary programs also contributed to the backlog reduction. Total backlog decreased by
12% in 2008 compared with 2007 primarily due to revenues recognized on multi-year orders received
in prior years on BCTM, GMD and C3 programs, partially offset by an increase in the International
Space Station program.
Items which could have a future impact on N&SS operations include the following:
United Launch Alliance On December 1, 2006, we and Lockheed Martin Corporation (Lockheed)
created a 50/50 joint venture named United Launch Alliance L.L.C. ULA combines the production,
engineering, test and launch operations associated with U.S. government launches of Boeing Delta
and Lockheed Atlas rockets. We initially contributed net assets of $914 million at December 1, 2006.
The book value of our investment exceeded our proportionate share of ULAs net assets. This
difference is expensed ratably in future years. Based on the adjusted contributions and the conformed
accounting policies established by ULA, this amortization is expected to be approximately $15 million
annually for the next 15 years.
In connection with the formation of ULA, we and Lockheed each have agreed to extend a line of credit
to ULA of up to $200 million to support its working capital requirements during the 5 year period
following December 1, 2006. We and Lockheed transferred performance responsibility for certain U.S.
government contracts to ULA as of the closing date. We and Lockheed agreed to jointly guarantee the
performance of those contracts to the extent required by the U.S. government. We and Lockheed have
also each committed to provide ULA with up to $122 million of additional capital contributions in the
event ULA does not have sufficient funds to make a required payment to us under an inventory supply
agreement. See Note 7.
We agreed to indemnify ULA through December 31, 2020 against potential non-recoverability and
non-allowability of $1,360 million of Boeing Delta inventories included in contributed assets plus $1,860
million of inventory subject to an inventory supply agreement which ends on March 31, 2021. Since
inception, ULA has consumed $1,111 million of inventories that were contributed by us and has made
payments of $120 million to us under the inventory supply agreement. As part of its integration, ULA is
continuing to assess the future of the Delta II program beyond what is currently on contract. In the
event ULA is unable to sell additional Delta II inventory, earnings could be reduced by up to $62
million.
We agreed to indemnify ULA against potential losses that ULA may incur in the event ULA is unable to
obtain certain additional contract pricing from the U.S. Air Force (USAF) for four satellite missions. We
believe ULA is entitled to additional contract pricing. In December 2008, ULA submitted a claim to the
USAF to re-price the contract value for two of the four satellite missions covered by the indemnification.
In March 2009, the USAF issued a denial of that claim and in June 2009, ULA filed an appeal. During
2009, the USAF exercised its option for a third satellite mission. ULA intends to submit a claim to the
USAF in 2010 to re-price the contract value of the third mission. If ULA is unsuccessful obtaining
additional pricing we may be responsible for some of the shortfall and may record up to $382 million in
pre-tax losses associated with the four missions.
Business Environment and Trends During 2009, we received a partial termination for convenience
from the U.S. Army of the BCTM (formerly FCS) System Development and Demonstration contract
relating to Manned Ground Vehicles and associated systems and equipment. We believe the final
restructured BCTM contract will negatively impact revenue and earnings in the N&SS segment going
forward. In addition, we completed the TSAT risk reduction and system definition contract in July 2009
and do not anticipate a future TSAT space segment program competition. As a result of lower than
anticipated revenue and earnings, we tested N&SS goodwill for impairment during 2009. No
35
NLRB-FOIA-00005836
impairment was indicated by our tests. Future recommended budgetary changes, if approved by
Congress, or additional partial terminations, could further impact N&SS programs, including the
recoverability of goodwill.
Sea Launch See the discussion of Sea Launch Chapter 11 Filing and outstanding accounts receivable
in Note 6 Accounts Receivable.
Satellites See the discussions of Boeing Satellite Systems International, Inc. (BSSI) in Note 20 Legal
Proceedings and discussion of Satellite insurance risk in Note 11 Liabilities, Commitments and
Contingencies.
Global Services & Support
Operating Results
Revenues $ 8,727 $ 7,390 $7,072
Earnings from operations $ 947 $ 921 $ 970
Unobligated backlog $ 306 $ 690 $1,172
Revenues GS&S revenues increased $1,337 million in 2009 and $318 million in 2008, an increase of
18% and 4%. The 2009 increase was due to increased volume in the Integrated Logistics (IL), and the
Training Systems and Services (TS&S) divisions. The 2008 increase was due to higher revenues in the
TS&S and IL divisions partially offset by decreases in International Support program volume.
Operating Earnings GS&S Operating earnings increased 3% in 2009 as additional earnings from
increased volume were partially offset by lower margins due to contract adjustments and changes in
contract mix. Operating earnings decreased by 5% in 2008 due to changes in the contract mix and
disposition of contract matters.
Research and Development GS&S continues to focus investment strategies on its core businesses
including IL, Maintenance Modifications and Upgrades (MM&U) and TS&S, as well as on moving into
new market areas of Logistics Command and Control (Log C2) and Energy Management in
Advanced Global Services and Support. Investments have been made to continue the development
and implementation of innovative tools, processes and systems as market discriminators in the delivery
of integrated customer solutions. Examples of successful programs stemming from these investment
strategies include the C-17 Globemaster Sustainment Partnership, the F/A-18 Integrated Readiness
Support Teaming program, the F-15 Singapore Performance-Based Logistics contract, and Smart Grid
Projects. Successful development of adaptable systems has allowed GS&S to transition from Boeing
platforms and into the broader aviation market. Beyond aerospace, GS&S capabilities have created
opportunities in adjacencies and new markets exemplified in 2009 through entrance into
the Land Vehicle support, Energy Solutions, and Logistics Information Systems markets.
Backlog GS&S total backlog increased by 8% in 2009 compared with 2008 due to significant growth in
International Support and Defense and Government Services programs and partially offset by
decreases in the IL and MM&U divisions. Total backlog increased 6% in 2008 compared with 2007
primarily due to increases in IL and International Support programs.
36
NLRB-FOIA-00005837
Boeing Capital Corporation
BCCs customer financing and investment portfolio at December 31, 2009 totaled $5,666 million, which
was substantially collateralized by Boeing produced commercial aircraft. A substantial portion of BCCs
portfolio is concentrated among U.S. commercial airline customers.
The weak global economic environment and capital market disruptions affected the availability of credit
for the airline industry. While sources of financing available for aircraft deliveries improved during 2009,
BCC provided limited financing to certain Boeing customers. To the extent capital market conditions
continue to improve, we believe the overall aircraft financing market should improve as well and lessen
the need for BCC to provide financing.
Aircraft values and lease rates are impacted by the number and type of aircraft that are currently out of
service. Approximately 2,400 western-built commercial jet aircraft (11.6% of current world fleet) were
parked as of December 2009, including both in-production and out-of-production aircraft types. Over
36% of the parked aircraft are not expected to return to service. In December 2008 and 2007, 11.0%
and 8.2% of the western-built commercial jet aircraft were parked. Aircraft valuations could decline if
significant numbers of aircraft, particularly types with relatively few operators, are placed out of service.
Summary Financial Information
Revenues $660 $703 $815
Earnings from operations $126 $162 $234
Operating margins 19% 23% 29%
Revenues
BCC segment revenues consist principally of lease income from equipment under operating lease and
interest from financing receivables and notes. BCCs revenues decreased $43 million in 2009, resulting
from lower operating lease income resulting from a smaller portfolio of equipment under operating
leases as a result of aircraft returns and asset dispositions. BCCs revenues decreased $112 million in
2008, primarily due to lower interest income on notes receivable and lower investment income.
BCCs operating earnings are presented net of interest expense, provision for (recovery of) losses,
asset impairment expense, depreciation on leased equipment and other operating expenses.
Operating earnings decreased by $36 million in 2009 primarily due to lower revenues, higher
impairment expense and a provision for losses primarily due to declines in aircraft collateral values and
reduced projected cash flows for certain aircraft. The decrease in operating earnings in 2008 compared
with 2007 was primarily due to lower revenues.
37
NLRB-FOIA-00005838
Financial Position
The following table presents selected financial data for BCC as of December 31,:
(Dollars in millions) 2009 2008
BCC Customer Financing and Investment Portfolio $ 5,666 $ 6,023
Valuation Allowance as a % of Total Receivables 2.5% 2.1%
Debt $ 4,075 $ 3,652
Debt-to-Equity Ratio 5.8-to-1 5.0-to-1
BCCs customer financing and investment portfolio at December 31, 2009 decreased from
December 31, 2008 due to normal portfolio run-off partially offset by new business volume. At
December 31, 2009 and 2008, BCC had $385 million and $685 million of assets that were held for sale
or re-lease, of which $345 million and $305 million had either executed term sheets with deposits or
firm contracts to be sold or placed on lease. In March 2009, Mexicana Group committed to lease 25
717 aircraft, including 13 that were placed on lease and 12 that were held for sale or re-lease at
December 31, 2009. Additionally, aircraft subject to leases with a carrying value of approximately $171
million are scheduled to be returned off lease during 2010. These aircraft are being remarketed or the
leases are being extended and approximately $15 million of such aircraft had either executed term
sheets with deposits or firm contracts at December 31, 2009.
BCC enters into certain transactions with the Other segment in the form of intercompany guarantees
and other subsidies.
Restructurings and Restructuring Requests
From time to time, certain customers have requested a restructuring of their transactions with BCC. As
of December 31, 2009, BCC has not reached agreement on any restructuring requests that would have
a material adverse effect on its earnings, cash flows and/or financial position.
Other Segment
Revenues $ 165 $ 567 $ 308
Loss from operations $(152) $(307) $(331)
Effective January 1, 2008, certain intercompany items were realigned between the Other segment and
Unallocated expense. Business segment data for all periods presented have been adjusted to reflect
the realignment. Other segment revenues for the year ended December 31, 2009 decreased by $402
million compared with 2008 primarily due to the sale of three C-17 aircraft in 2008 held under operating
lease. Other segment operating losses for the year ended December 31, 2009 decreased by $155
million primarily due to recognition of pre-tax expense of $82 million in the prior year to increase the
allowance for losses on customer financing receivables related to lower U.S. airline customer credit
ratings. During 2009, Other segment recognized $76 million in lower charges relating to environmental
remediation than in 2008.
Other segment revenues for the year ended December 31, 2008 increased by $259 million compared
with 2007 primarily due to the sale of four C-17 aircraft held under operating lease, three of which were
sold in 2008. Other segment operating losses for the year ended December 31, 2008 decreased by
$24 million compared with 2007 primarily due to $50 million in lower environmental and certain other
charges offset by the recognition of a provision for losses of $82 million related to lower U.S. airline
customer credit ratings. The provision for losses amount has been recorded in the Other segment as a
result of intercompany guarantees we provide to BCC.
38
NLRB-FOIA-00005839
Liquidity and Capital Resources
Cash FlowSummary
Net earnings $ 1,312 $ 2,672 $ 4,074
Non-cash items 2,381 1,829 1,753
Changes in working capital 1,910 (4,902) 3,757
Net cash provided/(used) by operating activities 5,603 (401) 9,584
Net cash (used)/provided by investing activities (3,794) 1,888 (3,822)
Net cash provided/(used) by financing activities 4,094 (5,202) (4,884)
Effect of exchange rate changes on cash and cash equivalents 44 (59) 46
Net increase/(decrease) in cash and cash equivalents 5,947 (3,774) 924
Cash and cash equivalents at beginning of year 3,268 7,042 6,118
Cash and cash equivalents at end of year $ 9,215 $ 3,268 $ 7,042
Operating Activities Net cash provided by operating activities increased by $6,004 million to $5,603
million during 2009 compared with 2008. The improvement reflects a reduction in working capital due
to the inventory that was built up during the 2008 IAM strike which was delivered in 2009, offset by the
continued ramp up of the 787 program during 2009. We expect operating cash flows to be lower in
2010 as we continue to build inventories prior to deliveries of the 787 and 747-8 airplanes. We
contributed 29,211,295 shares of our common stock with an aggregate value of $1.5 billion to our
pension plans in November 2009. Cash contributions to our pension plans totaled $82 million and $531
million in 2009 and 2008.
Investing Activities Cash used by investing activities totaled $3,794 million during 2009 compared
with $1,888 million provided during 2008. The $5,682 million year-over-year change is primarily due to
changes in investments in time deposits and debt securities. In 2008 we received net proceeds of
$4,670 million from liquidating investments. In 2009, we made net contributions of $1,588 million to
investments. In 2009, other investing outlays included $639 million for acquisitions and $448 million to
satisfy guarantees of Sea Launch indebtedness, which was partially offset by a $40 million
reimbursement. These cash outlays were partly offset by $488 million of lower capital spending on
property, plant and equipment additions in 2009 compared with 2008. We expect capital spending in
2010 to be higher than 2009 due to the construction of a second 787 final assembly line in North
Charleston, South Carolina.
Financing Activities Cash provided by financing activities totaled $4,094 million during 2009
compared with $5,202 million used during 2008, primarily due to proceeds from borrowings of $5,961
million in 2009 and reductions in share repurchases in 2009.
On March 13, 2009, we issued notes totaling $1,850 million, on July 28, 2009, we issued notes totaling
$1,950 million, and on November 20, 2009, we issued notes totaling $1,200 million. On October 27,
2009, BCC issued notes totaling $1,000 million.
In 2009, we repaid $551 million of debt, including $528 million of debt held at BCC. In 2008, we repaid
$738 million of debt, including $709 million of debt held at BCC. In 2007, we repaid $1,406 million of
debt, including $1,309 million of debt held at BCC. There were no material debt issuances during 2008
or 2007. At December 31, 2009 and 2008, the recorded balance of debt was $12,924 million and
$7,512 million, of which $707 million and $560 million were classified as short-term. This includes
$4,075 million and $3,652 million of debt recorded at BCC, of which $659 million and $528 million was
classified as short-term.
39
NLRB-FOIA-00005840
During 2009, we repurchased 1,173,152 shares at an average price of $42.94 in our open market
share repurchase program and 477,176 shares transferred to us from employees in satisfaction of
minimum tax withholding obligations associated with the vesting of restricted stock during the period.
During 2008, we repurchased 42,073,885 shares at an average price of $69.79 in our open market
share repurchase program, 1,462,776 shares at an average price of $64.95 as part of the ShareValue
Trust distribution, and 74,824 shares in stock swaps. During 2007, we repurchased 28,995,599 shares
at an average price of $95.68 in our open market share repurchase program and 28,432 shares in
stock swaps. Share repurchase activity is expected to remain at a minimal level in 2010.
Credit Ratings Our credit ratings are summarized below:
Fitch Moodys
Standard &
Poors
Long-term:
Boeing/BCC A+ A2 A
Outlook Negative Negative Stable
Short-term:
Boeing/BCC F1 P-1 A-1
On April 30, 2009, Fitch Ratings affirmed Boeings and BCCs A+ credit rating but changed its outlook
from stable to negative. On July 29, 2009, Standard & Poors lowered Boeings and BCCs long-term
ratings from A+ to A. On October 14, 2009, Moodys affirmed Boeings and BCCs A2 and P-1 ratings,
but changed its outlook from neutral to negative.
Capital Resources We have substantial borrowing capacity. Any future borrowings may affect our
credit ratings and are subject to various debt covenants. We and BCC have commercial paper
programs that continue to serve as significant potential sources of short-term liquidity. Throughout
2009 and at December 31, 2009, neither we nor BCC had any commercial paper borrowings
outstanding. Currently, we have $3,525 million ($1,500 million exclusively available for BCC) of unused
borrowing on revolving credit line agreements, of which $2,000 million is a 5-year credit facility expiring
in November 2012 and $1,525 million is a 364-day revolving credit facility expiring in November 2010.
Both the 5-year and 364-day credit facilities have a one-year term out option which allows us to extend
the maturity of any borrowings one year beyond the aforementioned expiration dates. In 2009, we
renewed the 364-day revolving credit facility, of which $500 million is allocated to BCC. We anticipate
that these credit lines will primarily serve as backup liquidity to support possible commercial paper
borrowings in 2010. On March 9, 2009, we filed a public shelf registration with the U.S. Securities and
Exchange Commission for the issuance of an indeterminate amount of debt securities and common
stock.
In the event we require additional funding to support strategic business opportunities, our commercial
aircraft financing commitments, unfavorable resolution of loss contingencies, or other business
requirements, we expect to meet increased funding requirements by issuing commercial paper or term
debt. We believe our ability to access external capital resources should be sufficient to satisfy existing
short-term and long-term commitments and plans, and also to provide adequate financial flexibility to
take advantage of potential strategic business opportunities should they arise within the next year. At
this point in time, our access to liquidity sources has not been materially impacted by the current credit
environment, and we do not expect that it will be materially impacted in the near future. There can be
no assurance, however, that the cost or availability of future borrowings, if any, under our commercial
paper program, in the debt markets or our credit facilities will not be materially impacted by capital
market conditions.
On November 9, 2009, we made pension contributions in the form of 29,211,295 shares of our
common stock. The contributed shares had an aggregate value of $1.5 billion, as of the contribution
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date. The share contribution did not affect cash balances. In addition, we made cash contributions of
$82 million during 2009. In 2010, we will begin matching employee contributions to the company-
sponsored 401(k) plan with common stock instead of cash for nonunion employees.
At December 31, 2009 and 2008 our pension plans were $6,356 million and $8,420 million
underfunded as measured under GAAP. In 2010, required contributions to our pension plans are not
expected to exceed $100 million.
As of December 31, 2009, we were in compliance with the covenants for our debt and credit facilities.
The most restrictive covenants include a limitation on mortgage debt and sale and leaseback
transactions as a percentage of consolidated net tangible assets (as defined in the credit agreements),
and a limitation on consolidated debt as a percentage of total capital (as defined). When considering
debt covenants, we continue to have substantial borrowing capacity.
Contractual Obligations
The following table summarizes our known obligations to make future payments pursuant to certain
contracts as of December 31, 2009, and the estimated timing thereof.
(Dollars in millions) Total
Less than
1 year
1-3
years
3-5
years
After 5
years
Long-term debt (including current portion) $ 12,846 $ 680 $ 2,815 $ 2,547 $ 6,804
Interest on debt* 7,981 664 1,204 934 5,179
Pension and other postretirement cash
requirements 22,038 634 1,484 5,304 14,616
Capital lease obligations 76 14 28 22 12
Operating lease obligations 1,158 213 300 188 457
Purchase obligations not recorded on the
Consolidated Statement of Financial Position 100,496 35,387 29,070 20,821 15,218
Purchase obligations recorded on the
Consolidated Statement of Financial Position 11,793 10,893 765 131 4
Total contractual obligations $156,388 $48,485 $35,666 $29,947 $42,290
* Includes interest on variable rate debt calculated based on interest rates at December 31, 2009.
Variable rate debt was approximately 1% of our total debt at December 31, 2009.
Pension and Other Postretirement Benefits Pension cash requirements are based on an estimate of
our minimum funding requirements, pursuant to ERISA regulations, although we may make additional
discretionary contributions. Estimates of other postretirement benefits are based on both our estimated
future benefit payments and the estimated contributions to plans that are funded through trusts.
Purchase Obligations Purchase obligations represent contractual agreements to purchase goods or
services that are legally binding; specify a fixed, minimum or range of quantities; specify a fixed,
minimum, variable, or indexed price provision; and specify approximate timing of the transaction. In
addition, the agreements are not cancelable without substantial penalty. Purchase obligations include
amounts recorded as well as amounts that are not recorded on the Consolidated Statements of
Financial Position. Approximately 9% of the purchase obligations disclosed above are reimbursable to
us pursuant to cost-type government contracts.
Purchase Obligations Not Recorded on the Consolidated Statement of Financial Position
Production related purchase obligations not recorded on the Consolidated Statement of Financial
Position include agreements for production goods, tooling costs, electricity and natural gas contracts,
41
NLRB-FOIA-00005842
property, plant and equipment, and other miscellaneous production related obligations. The most
significant obligation relates to inventory procurement contracts. We have entered into certain
significant inventory procurement contracts that specify determinable prices and quantities, and long-
term delivery timeframes. In addition, we purchase raw materials on behalf of our suppliers. These
agreements require suppliers and vendors to be prepared to build and deliver items in sufficient time to
meet our production schedules. The need for such arrangements with suppliers and vendors arises
from the extended production planning horizon for many of our products. A significant portion of these
inventory commitments is supported by firm contracts and/or has historically resulted in settlement
through reimbursement from customers for penalty payments to the supplier should the customer not
take delivery. These amounts are also included in our forecasts of costs for program and contract
accounting. Some inventory procurement contracts may include escalation adjustments. In these
limited cases, we have included our best estimate of the effect of the escalation adjustment in the
amounts disclosed in the table above.
Purchase Obligations Recorded on the Consolidated Statement of Financial Position Purchase
obligations recorded on the Consolidated Statement of Financial Position primarily include accounts
payable and certain other liabilities including accrued compensation and dividends payable.
Industrial Participation Agreements We have entered into various industrial participation
agreements with certain customers outside of the U.S. to facilitate economic flow back and/or
technology transfer to their businesses or government agencies as the result of their procurement of
goods and/or services from us. These commitments may be satisfied by our placement of direct work
or vendor orders for supplies, opportunities to bid on supply contracts, transfer of technology or other
forms of assistance. However, in certain cases, our commitments may be satisfied through other
parties (such as our vendors) who purchase supplies from our non-U.S. customers. We do not commit
to industrial participation agreements unless a contract for sale of our products or services is signed. In
certain cases, penalties could be imposed if we do not meet our industrial participation commitments.
During 2009, we incurred no such penalties. As of December 31, 2009, we have outstanding industrial
participation agreements totaling $11 billion that extend through 2024. Purchase order commitments
associated with industrial participation agreements are included in the table above. To be eligible for
such a purchase order commitment from us, a foreign supplier must have sufficient capability to meet
our requirements and must be competitive in cost, quality and schedule.
Income Tax Obligations As of December 31, 2009, our total liability for income taxes payable,
including uncertain tax positions, was $1,009 million, of which $182 million we expect to pay in the next
twelve months. We are not able to reasonably estimate the timing of future cash flows related to the
remaining $827 million. Our income tax obligations are excluded from the table above. See Note 5.
Commercial Commitments
The following table summarizes our commercial commitments outstanding as of December 31, 2009.
Total Amounts
Committed/Maximum
Amount of Loss
Less than
1 year
1-3
years
4-5
years
After 5
years
Standby letters of credit and surety
bonds $ 7,052 $5,944 $ 770 $ 3 $ 335
Commercial aircraft financing
commitments 10,409 1,873 1,313 2,753 4,470
Total commercial commitments $17,461 $7,817 $2,083 $2,756 $4,805
42
NLRB-FOIA-00005843
Commercial aircraft financing commitments include commitments to provide financing related to aircraft
on order, under option for deliveries or proposed as part of sales campaigns based on estimated
earliest potential funding dates. Based on historical experience, we currently do not anticipate that all
of these commitments will be exercised by our customers; however there can be no assurances that
we will not be required to fund greater amounts than historically required. See Note 11.
Contingent Obligations
We have significant contingent obligations that arise in the ordinary course of business, which include
the following:
Legal Various legal proceedings, claims and investigations are pending against us. Legal
contingencies are discussed in Note 20, including our contesting the default termination of the A-12
aircraft, litigation/arbitration involving BSSI programs and employment and benefits litigation brought by
several of our employees.
Environmental Remediation We are involved with various environmental remediation activities and
have recorded a liability of $706 million at December 31, 2009. For additional information, see Note 11.
Income Taxes We have recorded a net liability of $1,787 million at December 31, 2009 for uncertain
tax positions. For further discussion of these contingencies, see Note 5.
Off-Balance Sheet Arrangements
We are a party to certain off-balance sheet arrangements including certain guarantees. For discussion
of these arrangements, see Note 12.
Critical Accounting Policies
Contract Accounting
Contract accounting involves a judgmental process of estimating the total sales and costs for each
contract, which results in the development of estimated cost of sales percentages. For each contract,
the amount reported as cost of sales is determined by applying the estimated cost of sales percentage
to the amount of revenue recognized.
Due to the size, length of time and nature of many of our contracts, the estimation of total sales and
costs through completion is complicated and subject to many variables. Total contract sales estimates
are based on negotiated contract prices and quantities, modified by our assumptions regarding
contract options, change orders, incentive and award provisions associated with technical
performance, and price adjustment clauses (such as inflation or index-based clauses). The majority of
these contracts are with the U.S. government. Generally the price is based on estimated cost to
produce the product or service plus profit. Federal acquisition regulations provide guidance on the
types of cost that will be reimbursed in establishing contract price. Total contract cost estimates are
largely based on negotiated or estimated purchase contract terms, historical performance trends,
business base and other economic projections. Factors that influence these estimates include
inflationary trends, technical and schedule risk, internal and subcontractor performance trends,
business volume assumptions, asset utilization, and anticipated labor agreements.
The development of cost of sales percentages involves procedures and personnel in all areas that
provide financial or production information on the status of contracts. Estimates of each significant
contracts sales and costs are reviewed and reassessed quarterly. Any changes in these estimates
result in recognition of cumulative adjustments to the contract profit in the period in which changes are
made.
43
NLRB-FOIA-00005844
Due to the significance of judgment in the estimation process described above, it is likely that
materially different cost of sales amounts could be recorded if we used different assumptions or if the
underlying circumstances were to change. Changes in underlying assumptions/estimates, supplier
performance, or circumstances may adversely or positively affect financial performance in future
periods. If the combined gross margin for all contracts in BDS for all of 2009 had been estimated to be
higher or lower by 1%, it would have increased or decreased pre-tax income for the year by
approximately $337 million. A number of our contracts are in a reachforward loss position. Changes
to estimated loss in future periods are recorded immediately in earnings.
Program Accounting
Program accounting requires the demonstrated ability to reliably estimate the relationship of sales to
costs for the defined program accounting quantity. A program consists of the estimated number of units
(accounting quantity) of a product to be produced in a continuing, long-term production effort for
delivery under existing and anticipated contracts. The determination of the accounting quantity is
limited by the ability to make reasonably dependable estimates of the revenue and cost of existing and
anticipated contracts. For each program, the amount reported as cost of sales is determined by
applying the estimated cost of sales percentage for the total remaining program to the amount of sales
recognized for airplanes delivered and accepted by the customer.
Factors that must be estimated include program accounting quantity, sales price, labor and employee
benefit costs, material costs, procured part costs, major component costs, overhead costs, program
tooling costs, and routine warranty costs. Estimation of the accounting quantity for each program takes
into account several factors that are indicative of the demand for the particular program, such as firm
orders, letters of intent from prospective customers, and market studies. Total estimated program sales
are determined by estimating the model mix and sales price for all unsold units within the accounting
quantity, added together with the sales prices for all undelivered units under contract. The sales prices
for all undelivered units within the accounting quantity include an escalation adjustment that is based
on projected escalation rates, consistent with typical sales contract terms. Cost estimates are based
largely on negotiated and anticipated contracts with suppliers, historical performance trends, and
business base and other economic projections. Factors that influence these estimates include
production rates, internal and subcontractor performance trends, customer and/or supplier claims or
assertions, asset utilization, anticipated labor agreements, and inflationary trends.
To ensure reliability in our estimates, we employ a rigorous estimating process that is reviewed and
updated on a quarterly basis. Changes in estimates are normally recognized on a prospective basis;
when estimated costs to complete a program exceed estimated revenues from undelivered units in the
accounting quantity, a loss provision is recorded in the current period for the estimated loss on all
undelivered units in the accounting quantity.
The program method of accounting allocates tooling and production costs over the accounting quantity
for each program. Because of the higher unit production costs experienced at the beginning of a new
program and substantial investment required for initial tooling, new commercial aircraft programs, such
as the 787 program, typically have lower margins than established programs.
Due to the significance of judgment in the estimation process described above, it is likely that
materially different cost of sales amounts could be recorded if we used different assumptions, or if the
underlying circumstances were to change. Changes in underlying assumptions/estimates, supplier
performance, or circumstances may adversely or positively affect financial performance in future
periods. If combined cost of sales percentages for commercial airplane programs, excluding the 747
program, for all of 2009 had been estimated to be higher or lower by 1%, it would have increased or
decreased pre-tax income for the year by approximately $275 million. The 747 program is in a reach-
forward loss position. Absent changes in the estimated revenues or costs, subsequent deliveries are
44
NLRB-FOIA-00005845
recorded at zero margin. Reductions to the estimated loss in subsequent periods are spread over all
undelivered units in the accounting quantity, whereas increases to the estimated loss are recorded
immediately.
Aircraft Valuation
Allowance for Losses on Customer Financing Receivables The allowance for losses on customer
financing receivables (valuation provision) is used to provide for potential impairment of customer
financing receivables in the Consolidated Statements of Financial Position. The balance represents an
estimate of probable but unconfirmed losses in the customer financing receivables portfolio. The
estimate is based on various qualitative and quantitative factors, including historical loss experience,
collateral values, and results of individual credit and collectibility reviews. The adequacy of the
allowance is assessed quarterly.
Three primary factors influencing the level of our allowance are customer credit ratings, collateral
values and default rates. If each customers credit rating were upgraded or downgraded by one major
rating category at December 31, 2009, the allowance would have decreased by $142 million or
increased by $308 million. If the collateral values were 10% higher or lower at December 31, 2009, the
allowance would have decreased by $56 million or increased by $54 million. If the cumulative default
rates used for each rating category should increase or decrease 1%, the allowance would have
increased by $6 million or decreased by $6 million.
Impairment Review for Assets Under Operating Leases and Held for Re-Lease We evaluate for
impairment assets under operating lease or assets held for re-lease when events or changes in
circumstances indicate that the expected undiscounted cash flow from the asset may be less than its
carrying value. We use various assumptions when determining the expected undiscounted cash flow
including the expected future lease rates, lease terms, residual value of the asset, periods in which the
asset may be held in preparation for a follow-on lease, maintenance costs, remarketing costs and the
remaining economic life of the asset.
When we determine that impairment is indicated for an asset, the amount of impairment expense
recorded is the excess of the carrying value over the fair value of the asset.
Had future lease rates on assets evaluated for impairment been 10% lower, we estimate that we would
have incurred additional impairment expense of $8 million for the year ended December 31, 2009.
Lease Residual Values Equipment under operating leases and assets held for re-lease are carried at
cost less accumulated depreciation and are depreciated to estimated residual value using the straight-
line method over the period that we project we will hold the asset for lease. Estimates used in
determining residual values significantly impact the amount and timing of depreciation expense for
equipment under operating leases and assets held for re-lease. If the estimated residual values
declined 10% at December 31, 2009, this would result in a future cumulative pre-tax earnings impact of
approximately $180 million recognized over the remaining depreciable periods, of which approximately
$45 million would be recognized in 2010.
Goodwill and Indefinite-Lived Intangible Impairments
Goodwill and other acquired intangible assets with indefinite lives are not amortized but are annually
tested for impairment, and when an event occurs or circumstances change such that it is reasonably
possible that an impairment may exist. April 1 is our annual testing date. We test goodwill for
impairment by first comparing the book value of net assets to the fair value of the related operations. If
the fair value is determined to be less than book value, a second step is performed to compute the
45
NLRB-FOIA-00005846
amount of the impairment. In this process, a fair value for goodwill is estimated, based in part on the
fair value of the operations, and is compared to its carrying value. The shortfall of the fair value below
carrying value represents the amount of goodwill impairment.
We estimate the fair values of the related operations using discounted cash flows. Forecasts of future
cash flows are based on our best estimate of future sales and operating costs, based primarily on
existing firm orders, expected future orders, contracts with suppliers, labor agreements, and general
market conditions. Changes in these forecasts could significantly change the amount of impairment
recorded, if any.
The cash flow forecasts are adjusted by an appropriate discount rate derived from our market
capitalization plus a suitable control premium at the date of evaluation. Therefore, changes in the stock
price may also affect the amount of impairment recorded, if any.
Changes in our forecasts or decreases in the value of our common stock could cause book values of
certain operations to exceed their fair values which may result in goodwill impairment charges in future
periods. A 10% decrease in the estimated fair value of any of our operations would have no impact on
the carrying value of goodwill.
As of December 31, 2009 and 2008, we had $499 million of indefinite-lived intangible assets related to
the Jeppesen and Aviall brand and trade names acquired in business combinations. We test these
intangibles for impairment by comparing their carrying value to current projections of discounted cash
flows attributable to the brand and trade names. Any excess carrying value over the amount of
discounted cash flows represents the amount of the impairment. A 10% decrease in the discounted
cash flows would have no impact on the carrying value of these indefinite-lived intangible assets.
Postretirement Plans
Substantially all our employees are covered by defined benefit pension plans. We also have other
postretirement benefits consisting principally of healthcare coverage for eligible retirees and qualifying
dependents. Accounting rules require an annual measurement of our projected obligations and plan
assets. These measurements require several assumptions. Significant assumptions include the
discount rate, the expected long-term rate of asset return, and medical trend rate (rate of growth for
medical costs). Future changes in assumptions or differences between actual and expected outcomes
can significantly affect our future annual expense, projected benefit obligations and Shareholders
equity.
In the following table, we show the sensitivity of our pension and other postretirement benefit plan
liabilities and net periodic cost to a 25 basis point change in the discount rate as of December 31,
2009.
(dollars in millions)
Change in discount rate
Increase 25 bps
Change in discount rate
Decrease 25 bps
Pension plans
Projected benefit obligation $(1,478) $1,817
Net periodic pension cost (166) 189
Other postretirement benefit plans
Accumulated postretirement benefit obligation (163) 192
Net periodic postretirement benefit cost (12) 14
46
NLRB-FOIA-00005847
Pension expense is also sensitive to changes in the expected long-term rate of asset return. A
decrease or increase of 25 basis points in the expected long-term rate of asset return would have
increased or decreased 2009 net periodic pension expense by $117 million.
Differences between actual and expected returns can affect future years pension cost. The asset
balance used to calculate the expected return on pension plan assets is a calculated value that
recognizes changes in the fair value of assets over a five year period. Despite investment gains during
2009, the significant losses incurred during 2008 will cause net periodic pension cost for 2010 to
increase by approximately $100 million due to amortization of actuarial losses. Absent a recovery of
asset values or higher interest rates or higher contributions, net periodic pension expense will increase
further in future years.
The assumed medical trend rates have a significant effect on the following years expense, recorded
liabilities and Shareholders Equity. In the following table, we show the sensitivity of our other
postretirement benefit plan liabilities and net periodic cost to a 100 basis point change as of
December 31, 2009.
(dollars in millions)
Change in medical trend rate
Increase 100 bps
Change in medical trend rate
Decrease 100 bps
Other postretirement benefit plans
Accumulated postretirement benefit
obligation $617 $(541)
Net periodic postretirement benefit
cost 119 (104)
47
NLRB-FOIA-00005848
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
We have financial instruments that are subject to interest rate risk, principally fixed-rate debt
obligations, and customer financing assets and liabilities. Additionally, BCC uses interest rate swaps
with certain debt obligations to manage exposure to interest rate changes. Exposure to this risk is
managed by generally matching the profile of BCCs liabilities with that of BCCs assets in relation to
amount and terms such as expected maturities and fixed versus floating interest rates. As of
December 31, 2009, the impact to BCCs pre-tax earnings of a 100 basis point immediate and
sustained rise in interest rates would be insignificant for the year ended December 31, 2010.
Historically, we have not experienced material gains or losses on our investments or customer
financing assets and liabilities due to interest rate changes.
Based on the portfolio of other Boeing fixed-rate debt, the unhedged exposure to interest rate risk is
not material. The investors in the fixed-rate debt obligations that we issue do not generally have the
right to demand we pay off these obligations prior to maturity. Therefore, exposure to interest rate risk
is not believed to be material for our fixed-rate debt.
Foreign Currency Exchange Rate Risk
We are subject to foreign currency exchange rate risk relating to receipts from customers and
payments to suppliers in foreign currencies. We use foreign currency forward and option contracts to
hedge the price risk associated with firmly committed and forecasted foreign denominated payments
and receipts related to our ongoing business. Foreign currency forward and option contracts are
sensitive to changes in foreign currency exchange rates. At December 31, 2009, a 10% increase in the
exchange rate in our portfolio of foreign currency contracts would have decreased our unrealized gains
by $136 million and a 10% decrease in the exchange rate would have increased our unrealized gains
by $150 million. At December 31, 2008, a 10% increase in the exchange rate in our portfolio of foreign
currency forward and option contracts would have decreased our unrealized losses by $70 million and
a 10% decrease in the exchange rate would have decreased our unrealized losses by $196 million.
Consistent with the use of these contracts to neutralize the effect of exchange rate fluctuations, such
unrealized losses or gains would be offset by corresponding gains or losses, respectively, in the
remeasurement of the underlying transactions being hedged. When taken together, these forward
currency contracts and the offsetting underlying commitments do not create material market risk.
48
NLRB-FOIA-00005849
Item 8. Financial Statements and Supplementary Data
Index to the Consolidated Financial Statements
Page
Consolidated Statements of Operations 50
Consolidated Statements of Financial Position 51
Consolidated Statements of Cash Flows 52
Consolidated Statements of Shareholders Equity 53
Summary of Business Segment Data 55
Note 1 Summary of Significant Accounting Policies 56
Note 2 Acquisition 66
Note 3 Goodwill and Acquired Intangibles 67
Note 4 Earnings Per Share 68
Note 5 Income Taxes 69
Note 6 Accounts Receivable 71
Note 7 Inventories 73
Note 8 Customer Financing 74
Note 9 Property, Plant and Equipment 76
Note 10 Investments 77
Note 11 Liabilities, Commitments and Contingencies 78
Note 12 Arrangements with Off-Balance Sheet Risk 81
Note 13 Debt 83
Note 14 Postretirement Plans 85
Note 15 Share-Based Compensation and Other Compensation Arrangements 94
Note 16 Shareholders Equity 98
Note 17 Derivative Financial Instruments 99
Note 18 Significant Group Concentrations of Risk 101
Note 19 Fair Value Measurements 102
Note 20 Legal Proceedings 104
Note 21 Segment Information 108
Note 22 Quarterly Financial Data (Unaudited) 112
Reports of Independent Registered Public Accounting Firm 113
49
NLRB-FOIA-00005850
The Boeing Company and Subsidiaries
Consolidated Statements of Operations
Sales of products $ 57,032 $ 50,180 $ 57,049
Sales of services 11,249 10,729 9,338
Total revenues 68,281 60,909 66,387
Cost of products (47,639) (41,662) (45,375)
Cost of services (8,726) (8,467) (7,732)
Boeing Capital Corporation interest expense (175) (223) (295)
Total costs and expenses (56,540) (50,352) (53,402)
11,741 10,557 12,985
Income from operating investments, net 249 241 188
General and administrative expense (3,364) (3,084) (3,531)
Research and development expense, net of credits of $0, $50 and
$130 (6,506) (3,768) (3,850)
(Loss)/gain on dispositions, net (24) 4 38
Earnings from operations 2,096 3,950 5,830
Net earnings from continuing operations 1,335 2,654 4,058
Net (loss)/gain on disposal of discontinued operations, net of taxes of
$13, ($10) and ($9) (23) 18 16
Net earnings $ 1,312 $ 2,672 $ 4,074
Basic earnings per share from continuing operations $ 1.89 $ 3.68 $ 5.36
Net (loss)/gain on disposal of discontinued operations, net of taxes (0.03) 0.02 0.02
Basic earnings per share $ 1.86 $ 3.70 $ 5.38
Diluted earnings per share from continuing operations $ 1.87 $ 3.65 $ 5.26
Net (loss)/gain on disposal of discontinued operations, net of taxes (0.03) 0.02 0.02
Diluted earnings per share $ 1.84 $ 3.67 $ 5.28
See notes to consolidated financial statements on pages 55 112.
50
NLRB-FOIA-00005851
Consolidated Statements of Financial Position
December 31, 2009 2008
Assets
Cash and cash equivalents $ 9,215 $ 3,268
Short-term investments 2,008 11
Accounts receivable, net 5,785 5,602
Current portion of customer financing, net 368 425
Deferred income taxes 966 1,046
Inventories, net of advances and progress billings 16,933 15,612
Total current assets 35,275 25,964
Customer financing, net 5,466 5,857
Property, plant and equipment, net 8,784 8,762
Goodwill 4,319 3,647
Other acquired intangibles, net 2,877 2,685
Deferred income taxes 3,062 4,114
Investments 1,030 1,328
Pension plan assets, net 16 16
Other assets, net of accumulated amortization of $492 and $400 1,224 1,406
Total assets $ 62,053 $ 53,779
Liabilities and shareholders equity
Accounts payable $ 7,096 $ 5,871
Other accrued liabilities 12,822 11,564
Advances and billings in excess of related costs 12,076 12,737
Income taxes payable 182 41
Short-term debt and current portion of long-term debt 707 560
Total current liabilities 32,883 30,773
Accrued retiree health care 7,049 7,322
Accrued pension plan liability, net 6,315 8,383
Non-current income taxes payable 827 1,154
Other long-term liabilities 537 337
Long-term debt 12,217 6,952
Shareholders equity:
Common shares issued, par value $5.00 1,012,261,159 shares 5,061 5,061
Additional paid-in capital 3,724 3,456
Treasury shares, at cost (15,911) (17,758)
Retained earnings 22,746 22,675
Accumulated other comprehensive loss (11,877) (13,525)
ShareValue Trust shares (1,615) (1,203)
Total Boeing shareholders equity 2,128 (1,294)
Noncontrolling interest 97 152
Total shareholders equity 2,225 (1,142)
Total liabilities and shareholders equity $ 62,053 $ 53,779
51
NLRB-FOIA-00005852
Consolidated Statements of Cash Flows
Cash flows operating activities:
Net earnings $ 1,312 $ 2,672 $ 4,074
Adjustments to reconcile net earnings to net cash provided by operating
activities:
Non-cash items
Share-based plans expense 238 209 287
Depreciation 1,459 1,325 1,334
Amortization of other acquired intangibles 207 166 152
Amortization of debt discount/premium and issuance costs 12 11 (1)
Investment/asset impairment charges, net 151 50 51
Customer financing valuation provision 45 84 (60)
(Gain)/loss on disposal of discontinued operations 36 (28) (25)
(Gain)/loss on dispositions, net 24 (4) (38)
Other charges and credits, net 214 116 197
Excess tax benefits from share-based payment arrangements (5) (100) (144)
Changes in assets and liabilities
Accounts receivable (391) 564 (392)
Inventories, net of advances and progress billings (1,525) (6,168) (1,577)
Accounts payable 1,141 318 (198)
Other accrued liabilities 1,327 554 1,126
Advances and billings in excess of related costs (680) (1,120) 2,369
Income taxes receivable, payable and deferred 607 744 1,290
Other long-term liabilities (12) (211) 71
Pension and other postretirement plans 1,140 14 (143)
Customer financing, net 104 432 1,458
Other 199 (29) (247)
Net cash provided/(used) by operating activities 5,603 (401) 9,584
Cash flows investing activities:
Property, plant and equipment additions (1,186) (1,674) (1,731)
Property, plant and equipment reductions 27 34 59
Acquisitions, net of cash acquired (639) (964) (75)
Contributions to investments (2,629) (6,673) (5,710)
Proceeds from investments 1,041 11,343 3,817
Payments on Sea Launch guarantees (448)
Reimbursement of Sea Launch guarantee payments 40
Purchase of distribution rights (178) (182)
Net cash (used)/provided by investing activities (3,794) 1,888 (3,822)
Cash flows financing activities:
New borrowings 5,961 13 40
Debt repayments (551) (738) (1,406)
Payments to noncontrolling interests (40)
Repayments of distribution rights financing (357)
Stock options exercised, other 10 44 209
Excess tax benefits from share-based payment arrangements 5 100 144
Employee taxes on certain share-based payment arrangements (21) (135)
Common shares repurchased (50) (2,937) (2,775)
Dividends paid (1,220) (1,192) (1,096)
Net cash provided/(used) by financing activities 4,094 (5,202) (4,884)
Effect of exchange rate changes on cash and cash equivalents 44 (59) 46
Net increase/(decrease) in cash and cash equivalents 5,947 (3,774) 924
Cash and cash equivalents at beginning of year 3,268 7,042 6,118
Cash and cash equivalents at end of year $ 9,215 $ 3,268 $ 7,042
52
NLRB-FOIA-00005853
Consolidated Statements of Shareholders Equity
Boeing shareholders
(Dollars in millions,
except per share data)
Common
Stock
Additional
Paid-In
Capital
Treasury
Stock
Share-
Value
Trust
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Non-
controlling
Interest Total
Balance January 1, 2007 $5,061 $4,655 ($12,459) ($2,754) $18,453 ($ 8,217) $53 $4,792
Net earnings 4,074 8 4,082
Unrealized gain on derivative instruments, net of
tax of $(58) 97 97
Unrealized gain on certain investments, net of
tax of $(11) 17 17
Reclassification adjustment for gains realized in
net earnings, net of tax of $13 (21) (21)
Currency translation adjustment 87 87
Postretirement liability adjustment, net of tax of
$(1,948) 3,441 3,441
Comprehensive income 7,703
Share-based compensation 287 287
ShareValue Trust activity (2) 2
Tax benefit related to share-based plans 18 18
Excess tax pools 85 85
Treasury shares issued for stock options
exercised, net (32) 241 209
Treasury shares issued for other share-based
plans, net (254) 151 (103)
Treasury shares repurchased (2,775) (2,775)
Cash dividends declared ($1.45 per share) (1,129) (1,129)
Dividends related to Performance Share payout (11) (11)
Tax transition amount (11) (11)
Increase in noncontrolling interest 13 13
Balance December 31, 2007 5,061 4,757 (14,842) (2,752) 21,376 (4,596) 74 9,078
Net earnings 2,672 (2) 2,670
Unrealized loss on derivative instruments, net of
tax of $93 (159) (159)
Unrealized loss on certain investments, net of
tax of $61 (121) (121)
Reclassification adjustment for losses realized
in net earnings, net of tax of $(2) 4 4
Currency translation adjustment (180) (180)
Postretirement liability adjustment, net of tax of
$(4,883) (8,565) (8,565)
Comprehensive expense (6,351)
Share-based compensation and related
dividend equivalents 243 (8) 235
ShareValue Trust activity (1,540) 1,452 (88)
Excess tax pools 99 99
Treasury shares issued for other share-based
plans, net (94) 65 (29)
Treasury shares repurchased (2,937) (2,937)
Treasury shares transfer (97) 97
Postretirement transition amount, net of tax of
$50 (178) 92 (86)
Increase in noncontrolling interest 80 80
Balance December 31, 2008 5,061 3,456 (17,758) (1,203) 22,675 (13,525) 152 (1,142)
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NLRB-FOIA-00005854
Boeing shareholders
(Dollars in millions,
except per share data)
Common
Stock
Additional
Paid-In
Capital
Treasury
Stock
Share-
Value
Trust
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Non-
controlling
Interest Total
Net earnings 1,312 2 1,314
Unrealized gain on derivative instruments,
net of tax of $(92) 159 159
Unrealized gain on certain investments, net
of tax of $(18) 30 30
Reclassification adjustment for losses
realized in net earnings, net of tax of $(22) 38 38
Currency translation adjustment 154 154
Postretirement liability adjustment, net of tax
of $(717) 1,267 1,267
Comprehensive income 2,962
Share-based compensation and related
dividend equivalents 243 (8) 235
ShareValue Trust activity 412 (412)
Excess tax pools (1) (1)
Treasury shares issued for other share-
based plans, net (80) 69 (11)
Treasury shares repurchased (50) (50)
Treasury shares contributed to pension
plans (313) 1,813 1,500
Increase/(decrease) in noncontrolling
interest 12 (57) (45)
Balance December 31, 2009 $5,061 $3,724 ($15,911) ($1,615) $22,746 ($11,877) $97 $2,225
54
NLRB-FOIA-00005855
Notes to Consolidated Financial Statements
Summary of Business Segment Data
Revenues:
Unallocated items and eliminations (256) (671) (174)
Total revenues $68,281 $60,909 $66,387
(Loss)/earnings from operations:
Commercial Airplanes $ (583) $ 1,186 $ 3,584
Network & Space Systems 839 1,034 863
Global Services & Support 947 921 970
Other segment (152) (307) (331)
Unallocated items and eliminations (594) (323) (1,097)
Earnings from operations 2,096 3,950 5,830
Net earnings from continuing operations 1,335 2,654 4,058
Net (loss)/gain on disposal of discontinued operations, net of taxes of
$13, ($10) and ($9) (23) 18 16
Net earnings $ 1,312 $ 2,672 $ 4,074
This information is an integral part of the notes to the consolidated financial statements. See Note 21
for further segment results.
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Notes to Consolidated Financial Statements
Years ended December 31, 2009, 2008, 2007
Note 1 Summary of Significant Accounting Policies
Principles of Consolidation and Basis of Presentation
The Consolidated Financial Statements included in this report have been prepared by management of
The Boeing Company (herein referred to as Boeing, the Company, we, us, or our). These
statements include the accounts of all majority-owned subsidiaries and variable interest entities that
are required to be consolidated. All significant intercompany accounts and transactions have been
eliminated. Certain amounts have been reclassified to conform to the current year presentation.
Effective January 1, 2009, we adopted a newly issued accounting standard which was retrospectively
applied and requires the noncontrolling interest to be separately presented as a component of
shareholders equity on the Consolidated Statements of Financial Position and Shareholders Equity.
The impact of this standard was not material to the Consolidated Statements of Operations.
Use of Estimates
Management makes assumptions and estimates to prepare financial statements in conformity with
accounting principles generally accepted in the United States of America. Those assumptions and
estimates directly affect the amounts reported in the Consolidated Financial Statements. Significant
estimates for which changes in the near term are considered reasonably possible and that may have a
material impact on the financial statements are disclosed in these notes to the Consolidated Financial
Statements.
Operating Cycle
For classification of certain current assets and liabilities, we use the duration of the related contract or
program as our operating cycle, which is generally longer than one year and could exceed 3 years.
Revenue and Related Cost Recognition
Contract Accounting Contract accounting is used for development and production activities
predominantly by Boeing Defense, Space & Security (BDS) (formerly IDS). The majority of business
conducted by BDS is performed under contracts with the U.S. government and other customers that
extend over several years. Contract accounting involves a judgmental process of estimating the total
sales and costs for each contract resulting in the development of estimated cost of sales percentages.
For each contract, the amount reported as cost of sales is determined by applying the estimated cost
of sales percentage to the amount of revenue recognized.
We combine contracts for accounting purposes when they are negotiated as a package with an overall
profit margin objective, essentially represent an agreement to do a single project for a single customer,
involve interrelated construction activities with substantial common costs, and are performed
concurrently or sequentially. When a group of contracts is combined, revenue and profit are earned
uniformly over the performance of the combined contracts.
Sales related to fixed-price contracts are recognized as deliveries are made, except for certain fixed-
price contracts that require substantial performance over an extended period before deliveries begin,
for which sales are recorded based on the attainment of performance milestones. Sales related to
contracts in which we are reimbursed for costs incurred plus an agreed upon profit are recorded as
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costs are incurred. The Federal Acquisition Regulations provide guidance on the types of cost that will
be reimbursed in establishing contract price. Contracts may contain provisions to earn incentive and
award fees if specified targets are achieved. Incentive and award fees that can be reasonably
estimated and are probable are recorded over the performance period of the contract. Incentive and
award fees that cannot be reasonably estimated are recorded when awarded.
Program Accounting Our Commercial Airplanes segment predominantly uses program accounting to
account for cost of sales related to its programs. Program accounting is applicable to products
manufactured for delivery under production-type contracts where profitability is realized over multiple
contracts and years. Under program accounting, inventoriable production costs, program tooling costs,
and routine warranty costs are accumulated and charged to cost of sales by program instead of by
individual units or contracts. A program consists of the estimated number of units (accounting quantity)
of a product to be produced in a continuing, long-term production effort for delivery under existing and
anticipated contracts. The determination of the accounting quantity is limited by the ability to make
reasonably dependable estimates of the revenue and cost of existing and anticipated contracts. To
establish the relationship of sales to cost of sales, program accounting requires estimates of (a) the
number of units to be produced and sold in a program, (b) the period over which the units can
reasonably be expected to be produced, and (c) the units expected sales prices, production costs,
program tooling, and routine warranty costs for the total program.
We recognize sales for commercial airplane deliveries as each unit is completed and accepted by the
customer. Sales recognized represent the price negotiated with the customer, adjusted by an
escalation formula as specified in the customer agreement. The amount reported as cost of sales is
determined by applying the estimated cost of sales percentage for the total remaining program to the
amount of sales recognized for airplanes delivered and accepted by the customer.
Concession Sharing Arrangements We account for sales concessions to our customers in
consideration of their purchase of products and services as a reduction to revenue when the related
products and services are delivered. The sales concessions incurred may be partially reimbursed by
certain suppliers in accordance with concession sharing arrangements. We record these
reimbursements, which are presumed to represent reductions in the price of the vendors products or
services, as a reduction in Cost of products.
Spare Parts Revenue We recognize sales of spare parts upon delivery and the amount reported as
cost of sales is recorded at average cost.
Service Revenue Service revenue is recognized when the service is performed with the exception of
U.S. government service agreements, which are accounted for using contract accounting. Service
activities primarily include: support agreements associated with military aircraft and helicopter
contracts, ongoing maintenance of International Space Station and Space Shuttle, commercial Delta
launches and technical and flight operation services for commercial aircraft. Service revenue and
associated cost of sales from pay-in-advance subscription fees are deferred and recognized as
services are rendered.
Financial Services Revenue We record financial services revenue associated with sales-type finance
leases, operating leases, and notes receivable.
Lease and financing revenue arrangements are included in Sales of services on the Consolidated
Statements of Operations. For sales-type finance leases, we record an asset at lease inception. This
asset is recorded at the aggregate future minimum lease payments, estimated residual value of the
leased equipment, and deferred incremental direct costs less unearned income. Income is recognized
over the life of the lease to approximate a level rate of return on the net investment. Residual values,
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which are reviewed periodically, represent the estimated amount we expect to receive at lease
termination from the disposition of the leased equipment. Actual residual values realized could differ
from these estimates. Declines in estimated residual value that are deemed other-than-temporary are
recognized as Cost of services in the period in which the declines occur.
For operating leases, revenue on leased aircraft and equipment is recorded on a straight-line basis
over the term of the lease. Operating lease assets, included in Customer financing, are recorded at
cost and depreciated over the period that we project we will hold the asset to an estimated residual
value, using the straight-line method. Prepayments received on operating lease contracts are classified
as Other long-term liabilities on the Consolidated Statements of Financial Position. We periodically
review our estimates of residual value and recognize forecasted changes by prospectively adjusting
depreciation expense.
For notes receivable, notes are recorded net of any unamortized discounts and deferred incremental
direct costs. Interest income and amortization of any discounts are recorded ratably over the related
term of the note.
Reinsurance Revenue Our wholly-owned insurance subsidiary, Astro Ltd., participates in a
reinsurance pool for workers compensation. The member agreements and practices of the
reinsurance pool minimize any participating members individual risk. Reinsurance revenues were
$122, $83 and $84 during 2009, 2008, and 2007 respectively. Reinsurance costs related to premiums
and claims paid to the reinsurance pool were $118, $86, and $93 during 2009, 2008, and 2007
respectively. Revenues and costs are presented net in Cost of services in the Consolidated
Statements of Operations.
Fleet Support
We provide assistance and services to facilitate efficient and safe aircraft operation to the operators of
all our commercial airplane models. Collectively known as fleet support services, these activities and
services include flight and maintenance training, field service support, engineering services, and
technical data and documents. Fleet support activity begins prior to aircraft delivery as the customer
receives training, manuals, and technical consulting support. This activity continues throughout the
aircrafts operational life. Services provided after delivery include field service support, consulting on
maintenance, repair, and operational issues brought forth by the customer or regulators, updating
manuals and engineering data, and the issuance of service bulletins that impact the entire models
fleet. Field service support involves our personnel located at customer facilities providing and
coordinating fleet support activities and requests. The costs for fleet support are expensed as incurred
as Cost of services.
Research and Development
Research and development includes costs incurred for experimentation, design, testing, and bid and
proposal efforts related to government products and services and are expensed as incurred unless the
costs are related to certain contractual arrangements. Costs that are incurred pursuant to such
contractual arrangements are recorded over the period that revenue is recognized, consistent with our
contract accounting policy. We have certain research and development arrangements that meet the
requirement for best efforts research and development accounting. Accordingly, the amounts funded
by the customer are recognized as an offset to our research and development expense rather than as
contract revenues.
We have established cost sharing arrangements with some suppliers for the 787 program, which have
enhanced our internal development capabilities and have offset a substantial portion of the financial
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risk of developing this aircraft. Our cost sharing arrangements state that the supplier contributions are
for reimbursements of costs we incur for experimentation, basic design, and testing activities during the
787 development. In each arrangement, we retain substantial rights to the 787 part or component
covered by the arrangement. The amounts received from these cost sharing arrangements are
recorded as a reduction to research and development expenses since we have no obligation to refund
any amounts received per the arrangements regardless of the outcome of the development efforts.
Specifically, under the terms of each agreement, payments received from suppliers for their share of
the costs are typically based on milestones and are recognized as earned when we achieve the
milestone events and no ongoing obligation on our part exists. In the event we receive a milestone
payment prior to the completion of the milestone, the amount is classified in Other accrued liabilities
until earned.
Share-Based Compensation
We provide various forms of share-based compensation to our employees. For awards settled in
shares, we measure compensation expense based on the grant-date fair value net of estimated
forfeitures. For awards settled in cash, or that may be settled in cash, we measure compensation
expense based on the fair value at each reporting date net of estimated forfeitures. The expense is
recognized over the requisite service period, which is generally the vesting period of the award.
Income Taxes
Provisions for federal, state, and non-U.S. income taxes are calculated on reported Earnings before
income taxes based on current tax law and also include, in the current period, the cumulative effect of
any changes in tax rates from those used previously in determining deferred tax assets and liabilities.
Such provisions differ from the amounts currently receivable or payable because certain items of
income and expense are recognized in different time periods for financial reporting purposes than for
income tax purposes. Significant judgment is required in determining income tax provisions and
evaluating tax positions.
The accounting for uncertainty in income taxes requires a more-likely-than-not threshold for financial
statement recognition and measurement of tax positions taken or expected to be taken in a tax return.
We record a liability for the difference between the benefit recognized and measured for financial
statement purposes and the tax position taken or expected to be taken on our tax return. To the extent
that our assessment of such tax positions changes, the change in estimate is recorded in the period in
which the determination is made. Tax-related interest and penalties are classified as a component of
Income tax expense.
Postretirement Plans
We sponsor various pension plans covering substantially all employees. We also provide
postretirement benefit plans other than pensions, consisting principally of health care coverage to
eligible retirees and qualifying dependents. Benefits under the pension and other postretirement benefit
plans are generally based on age at retirement and years of service and, for some pension plans,
benefits are also based on the employees annual earnings. The net periodic cost of our pension and
other postretirement plans is determined using the projected unit credit method and several actuarial
assumptions, the most significant of which are the discount rate, the long-term rate of asset return, and
medical trend (rate of growth for medical costs). A portion of net periodic pension and other
postretirement income or expense is not recognized in net earnings in the year incurred because it is
allocated to production as product costs, and reflected in inventory at the end of a reporting period. If
gains and losses, which occur when actual experience differs from actuarial assumptions, exceed ten
percent of the greater of plan assets or plan liabilities we amortize them over the average future
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service period of employees. The funded status of our pension and postretirement plans is reflected on
the Consolidated Statements of Financial Position. Effective December 31, 2008, accounting standards
required us to measure our plan assets and benefit obligations at December 31, the date of our year
end. We previously performed this measurement at September 30 of each year.
Postemployment Plans
We record a liability for postemployment benefits, such as severance or job training, when payment is
probable, the amount is reasonably estimable, and the obligation relates to rights that have vested or
accumulated.
Environmental Remediation
We are subject to federal and state requirements for protection of the environment, including those for
discharge of hazardous materials and remediation of contaminated sites. We routinely assess, based
on in-depth studies, expert analyses and legal reviews, our contingencies, obligations, and
commitments for remediation of contaminated sites, including assessments of ranges and probabilities
of recoveries from other responsible parties who have and have not agreed to a settlement and of
recoveries from insurance carriers. Our policy is to accrue and charge to current expense identified
exposures related to environmental remediation sites based on our best estimate within a range of
potential exposure for investigation, cleanup, and monitoring costs to be incurred. Estimated
remediation costs are not discounted to present value as the timing of payments cannot be reasonably
estimated. We may be able to recover a portion of the remediation costs from insurers or other third-
parties. Such recoveries are recorded when realization of the claim for recovery is deemed probable.
Cash and Cash Equivalents
Cash and cash equivalents consist of highly liquid instruments, such as commercial paper, certificates
of deposit, time deposits, and other money market instruments, which have original maturities of three
months or less. We aggregate our cash balances by bank, and reclassify any negative balances to
Accounts payable. Accounts payable included $211 and $157 at December 31, 2009 and 2008,
attributable to checks written but not yet cleared by the bank.
Inventories
Inventoried costs on commercial aircraft programs and long-term contracts include direct engineering,
production and tooling costs, and applicable overhead, which includes fringe benefits, production
related indirect and plant management salaries and plant services, not in excess of estimated net
realizable value. To the extent a material amount of such costs are related to an abnormal event or are
fixed costs not appropriately attributable to our programs or contracts, they are expensed in the current
period rather than inventoried. Inventoried costs include amounts relating to programs and contracts
with long-term production cycles, a portion of which is not expected to be realized within one year.
Included in inventory for federal government contracts is an allocation of allowable costs related to
manufacturing process reengineering.
Because of the higher unit production costs experienced at the beginning of a new or derivative
commercial airplane program, the actual costs incurred for production of the early units in the program
may exceed the amount reported as cost of sales for those units. In addition, the use of a total program
gross profit rate to delivered units may result in costs assigned to delivered units in a reporting period
being less than the actual cost of those units. The excess actual costs incurred over the amount
reported as cost of sales is disclosed as deferred production costs, which are included in inventory
along with unamortized tooling costs.
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The determination of net realizable value of long-term contract costs is based upon quarterly reviews
that determine an estimate of costs to be incurred to complete all contract requirements. When actual
contract costs and the estimate to complete exceed total estimated contract revenues, a loss provision
is recorded. The determination of net realizable value of commercial aircraft program costs is based
upon quarterly program reviews that determine an estimate of revenue and cost to be incurred to
complete the program accounting quantity. When estimated costs to complete exceed estimated
program revenues to go, a program loss provision is recorded in the current period for the estimated
loss on all undelivered units in the accounting quantity.
Used aircraft purchased by the Commercial Airplanes segment and general stock materials are stated
at cost not in excess of net realizable value. See Aircraft valuation within this Note for our valuation of
used aircraft. Spare parts inventory is stated at lower of average unit cost or market. We review our
commercial spare parts and general stock materials quarterly to identify impaired inventory, including
excess or obsolete inventory, based on historical sales trends, expected production usage, and the
size and age of the aircraft fleet using the part. Impaired inventories are charged to Cost of products in
the period the impairment occurs.
Included in inventory for commercial aircraft programs are amounts paid or credited in cash, or other
consideration to certain airline customers, that are referred to as early issue sales consideration. Early
issue sales consideration is recognized as a reduction to revenue when the delivery of the aircraft
under contract occurs. In the unlikely situation that an airline customer was not able to perform and
take delivery of the contracted aircraft, we believe that we would have the ability to recover amounts
paid through retaining amounts secured by advances received on aircraft to be delivered. However, to
the extent early issue sales consideration exceeds advances and is not considered to be recoverable,
it would be recognized as a current period expense.
We net advances and progress billings on long-term contracts against inventory in the Consolidated
Statements of Financial Position. Advances and progress billings in excess of related inventory are
reported in Advances and billings in excess of related costs.
Precontract Costs
We may, from time to time, incur costs to begin fulfilling the statement of work under a specific
anticipated contract that we are still negotiating with a customer. If we determine it is probable that we
will be awarded the specific anticipated contract, then we capitalize the precontract costs we incur,
excluding any start-up costs which are expensed as incurred. Capitalized precontract costs of $183
and $350 at December 31, 2009 and 2008, are included in Inventories, net of advances and progress
billings, in the accompanying Consolidated Statements of Financial Position.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost, including applicable construction-period interest,
less accumulated depreciation and are depreciated principally over the following estimated useful lives:
new buildings and land improvements, from 10 to 40 years; and new machinery and equipment, from
3 to 20 years. The principal methods of depreciation are as follows: buildings and land improvements,
150% declining balance; and machinery and equipment, sum-of-the-years digits. Capitalized internal
use software is included in Other assets and amortized using the straight line method over five years.
We periodically evaluate the appropriateness of remaining depreciable lives assigned to long-lived
assets, including assets that may be subject to a management plan for disposition.
Long-lived assets held for sale are stated at the lower of cost or fair value less cost to sell. Long-lived
assets held for use are subject to an impairment assessment whenever events or changes in
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circumstances indicate that the carrying amount may not be recoverable. If the carrying value is no
longer recoverable based upon the undiscounted future cash flows of the asset, the amount of the
impairment is the difference between the carrying amount and the fair value of the asset.
Asset Retirement Obligations
We record all known asset retirement obligations for which the liabilitys fair value can be reasonably
estimated, including certain asbestos removal, asset decommissioning and contractual lease
restoration obligations. Recorded amounts are not material.
We also have known conditional asset retirement obligations, such as certain asbestos remediation
and asset decommissioning activities to be performed in the future, that are not reasonably estimable
due to insufficient information about the timing and method of settlement of the obligation. Accordingly,
these obligations have not been recorded in the Consolidated Financial Statements. A liability for these
obligations will be recorded in the period when sufficient information regarding timing and method of
settlement becomes available to make a reasonable estimate of the liabilitys fair value. In addition,
there may be conditional asset retirement obligations that we have not yet discovered (e.g. asbestos
may exist in certain buildings but we have not become aware of it through the normal course of
business), and therefore, these obligations also have not been included in the Consolidated Financial
Statements.
Goodwill and Other Acquired Intangibles
Goodwill and other acquired intangible assets with indefinite lives are not amortized, but are tested for
impairment annually and when an event occurs or circumstances change such that it is more likely
than not that an impairment may exist. Our annual testing date is April 1.
We test goodwill for impairment by first comparing the carrying value of net assets to the fair value of
the related operations. If the fair value is determined to be less than carrying value, a second step is
performed to compute the amount of the impairment. In this process, a fair value for goodwill is
estimated, based in part on the fair value of the operations, and is compared to its carrying value. The
shortfall of the fair value below carrying value represents the amount of goodwill impairment.
Indefinite-lived intangibles consist of brand and trade names acquired in business combinations. We
test these intangibles for impairment by comparing their carrying value to current projections of
discounted cash flows attributable to the brand and trade names. Any excess carrying value over the
amount of discounted cash flows represents the amount of the impairment.
Our finite-lived acquired intangible assets are amortized on a straight-line basis over their estimated
useful lives as follows: developed technology, from 3 to 14 years; product know-how, from 3 to 30
years; customer base, from 1 to 19 years; distribution rights, from 9 to 30 years; and other, from 1 to
32 years. We evaluate the potential impairment of finite-lived acquired intangible assets whenever
events or changes in circumstances indicate that the carrying amount may not be recoverable. If the
carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset,
the amount of the impairment is the difference between the carrying amount and the fair value of the
asset.
Investments
We classify investment securities as either held-to-maturity or available-for-sale. Held-to-maturity
securities include time deposits and are carried at cost.
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Available-for-sale securities include marketable debt and equity securities and Enhanced Equipment
Trust Certificates and are recorded at their fair values, with unrealized gains and losses reported as
part of Accumulated other comprehensive loss on the Consolidated Statements of Financial Position.
Realized gains and losses on marketable securities are recognized based on the cost of securities
using the first-in, first-out method. Realized gains and losses on all other available-for-sale securities
are recognized based on specific identification.
Available-for-sale securities are assessed for impairment quarterly. To determine if an impairment is
other-than-temporary, we consider the duration and severity of the loss position, the strength of the
underlying collateral, the term to maturity, credit rating and our intent to sell. For debt securities that are
deemed other-than-temporarily impaired and there is no intent to sell, impairments are separated into
the amount related to the credit loss, which is recorded in our Consolidated Statements of Operations,
and the amount related to all other factors, which is recorded in Accumulated other comprehensive
loss. For debt securities that are deemed other-than-temporarily impaired and there is an intent to sell,
impairments in their entirety are recorded in our Consolidated Statements of Operations. For equity
securities that are deemed other-than-temporarily impaired, impairments in their entirety are recorded
in our Consolidated Statements of Operations. Payments received on other-than-temporarily impaired
investments are recorded using the cost recovery method.
The equity method of accounting is used to account for investments for which we have the ability to
exercise significant influence, but not control, over an investee. Significant influence is generally
deemed to exist if we have an ownership interest in the voting stock of an investee of between 20%
and 50%.
We classify investment income and loss on our Consolidated Statements of Operations based on
whether the investment is operating or non-operating in nature. Operating investments align
strategically and are integrated with our operations. Earnings from operating investments, including our
share of income or loss from equity method investments, dividend income from certain cost method
investments, and any impairments or gain/loss on the disposition of these investments, are recorded in
Income from operating investments, net. Non-operating investments are those we hold for
non-strategic purposes. Earnings from non-operating investments, including interest and dividends on
marketable securities, and any impairments or gain/loss on the disposition of these investments are
recorded in Other (expense)/income, net.
Derivatives
All derivative instruments are recognized in the financial statements and measured at fair value
regardless of the purpose or intent of holding them. We use derivative instruments to principally
manage a variety of market risks. For derivatives designated as hedges of the exposure to changes in
fair value of the recognized asset or liability or a firm commitment (referred to as fair value hedges), the
gain or loss is recognized in earnings in the period of change together with the offsetting loss or gain
on the hedged item attributable to the risk being hedged. The effect of that accounting is to include in
earnings the extent to which the hedge is not effective in achieving offsetting changes in fair value. For
our cash flow hedges, the effective portion of the derivatives gain or loss is initially reported in
Shareholders equity (as a component of Accumulated other comprehensive loss) and is subsequently
reclassified into earnings in the same period or periods during which the hedged forecasted transaction
affects earnings. The ineffective portion of the gain or loss of a cash flow hedge is reported in earnings
immediately. We also hold certain instruments for economic purposes that are not designated for
hedge accounting treatment. For these derivative instruments, the changes in their fair value are also
recorded in earnings immediately.
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Aircraft Valuation
Used aircraft under trade-in commitments and aircraft under repurchase commitments In
conjunction with signing a definitive agreement for the sale of new aircraft (Sale Aircraft), we have
entered into specified-price trade-in commitments with certain customers that give them the right to
trade in used aircraft upon the purchase of Sale Aircraft. Additionally, we have entered into contingent
repurchase commitments with certain customers wherein we agree to repurchase the Sale Aircraft at a
specified price, generally ten years after delivery of the Sale Aircraft. Our repurchase of the Sale
Aircraft is contingent upon a future, mutually acceptable agreement for the sale of additional new
aircraft. If we execute an agreement for the sale of additional new aircraft, and if the customer
exercises its right to sell the Sale Aircraft to us, a contingent repurchase commitment would become a
trade-in commitment. Our historical experience is that no contingent repurchase agreements have
become trade-in commitments.
All trade-in commitments at December 31, 2009 and 2008 are solely attributable to Sale Aircraft and
did not originate from contingent repurchase agreements. Exposure related to trade-in commitments
may take the form of:
(1) Adjustments to revenue for the difference between the contractual trade-in price in the
definitive agreement and our best estimate of the fair value of the trade-in aircraft as of the
date of such agreement, which would be recorded in Inventory and recognized upon delivery
of the Sale Aircraft, and/or
(2) Charges to cost of products for adverse changes in the fair value of trade-in aircraft that occur
subsequent to signing of a definitive agreement for Sale Aircraft but prior to the purchase of
the used trade-in aircraft. Estimates based on current aircraft values would be included in
Other accrued liabilities.
The fair value of trade-in aircraft is determined using aircraft specific data such as model, age and
condition, market conditions for specific aircraft and similar models, and multiple valuation sources.
This process uses our assessment of the market for each trade-in aircraft, which in most instances
begins years before the return of the aircraft. There are several possible markets in which we
continually pursue opportunities to place used aircraft. These markets include, but are not limited to,
the resale market, which could potentially include the cost of long-term storage; the leasing market,
with the potential for refurbishment costs to meet the leasing customers requirements; or the scrap
market. Trade-in aircraft valuation varies significantly depending on which market we determine is most
likely for each aircraft. On a quarterly basis, we update our valuation analysis based on the actual
activities associated with placing each aircraft into a market. This quarterly valuation process yields
results that are typically lower than residual value estimates by independent sources and tends to more
accurately reflect results upon the actual placement of the aircraft.
Used aircraft acquired by the Commercial Airplanes segment are included in Inventories at the lower of
cost or market as it is our intent to sell these assets. To mitigate costs and enhance marketability,
aircraft may be placed on operating lease. While on operating lease, the assets are included in
Customer financing; however, the valuation continues to be based on the lower of cost or market. The
lower of cost or market assessment is performed quarterly using the process described above.
Asset valuation for assets under operating lease, assets held for sale or re-lease and collateral
underlying receivables Customer financing includes operating lease equipment, notes receivables,
and sales-type/financing leases. Sales-type/financing leases are treated as receivables, and
allowances for losses are established as necessary.
We assess the fair value of the assets we own, including equipment under operating leases, assets
held for sale or re-lease, and collateral underlying receivables, to determine if their fair values are less
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than the related assets carrying values. Differences between carrying values and fair values of finance
leases and notes and other receivables, as determined by collateral value, are considered in
determining the allowance for losses on receivables.
We use a median calculated from published collateral values from multiple third-party aircraft value
publications based on the type and age of the aircraft to determine the fair value of aircraft. Under
certain circumstances, we apply judgment based on the attributes of the specific aircraft or equipment,
usually when the features or use of the aircraft vary significantly from the more generic aircraft
attributes covered by outside publications.
Impairment review for assets under operating leases and held for sale or re-lease We evaluate
for impairment assets under operating lease or assets held for sale or re-lease when events or
changes in circumstances indicate that the expected undiscounted cash flow from the asset may be
less than the carrying value. We use various assumptions when determining the expected
undiscounted cash flow including our intentions for how long we will hold an asset subject to operating
lease before it is sold, the expected future lease rates, lease terms, residual value of the asset, periods
in which the asset may be held in preparation for a follow-on lease, maintenance costs, remarketing
costs and the remaining economic life of the asset. We state assets held for sale at the lower of
carrying value or fair value less costs to sell.
When we determine that impairment is indicated for an asset, the amount of impairment expense
recorded is the excess of the carrying value over the fair value of the asset.
Allowance for losses on customer financing receivables We record the potential impairment of
customer financing receivables in our portfolio in a valuation account, the balance of which is an
accounting estimate of probable but unconfirmed losses in the receivables portfolio. The allowance for
losses on receivables relates to two components of receivables: (a) specifically identified receivables
that are evaluated individually for impairment and (b) all other receivables.
We determine a receivable is impaired when, based on current information and events, it is probable
that we will be unable to collect amounts due according to the original contractual terms of the
receivable agreement, without regard to any subsequent restructurings. Factors considered in
assessing collectibility include, but are not limited to, a customers extended delinquency, requests for
restructuring and filings for bankruptcy. We determine a specific impairment allowance based on the
difference between the carrying value of the receivable and the estimated fair value of the related
collateral.
We review the adequacy of the allowance attributable to the remaining receivables (after excluding
receivables subject to a specific impairment allowance) by assessing both the collateral exposure and
the applicable cumulative default rate. Collateral exposure for a particular receivable is the excess of
the carrying value of the receivable over the fair value of the related collateral. A receivable with an
estimated fair value in excess of the carrying value is considered to have no collateral exposure. The
applicable cumulative default rate is determined using two components: customer credit ratings and
weighted average remaining contract term. Credit ratings are determined for each customer in the
portfolio. Those ratings are updated based upon public information and information obtained directly
from our customers.
We have entered into agreements with certain customers that would entitle us to look beyond the
specific collateral underlying the receivable for purposes of determining the collateral exposure as
described above. Should the proceeds from the sale of the underlying collateral asset resulting from a
default condition be insufficient to cover the carrying value of our receivable (creating a shortfall
condition), these agreements would, for example, permit us to take the actions necessary to sell or
retain certain other assets in which the customer has an equity interest and use the proceeds to cover
the shortfall.
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Each quarter we review customer credit ratings, published historical credit default rates for different
rating categories, and multiple third party aircraft value publications as a basis to validate the
reasonableness of the allowance for losses on receivables. There can be no assurance that actual
results will not differ from estimates or that the consideration of these factors in the future will not result
in an increase or decrease to the allowance for losses on receivables.
Warranties
In conjunction with certain product sales, we provide warranties that cover factors such as
non-conformance to specifications and defects in material and design. The majority of our warranties
are issued by our Commercial Airplanes segment. Generally, aircraft sales are accompanied by a three
to four-year standard warranty for systems, accessories, equipment, parts, and software manufactured
by us or manufactured to certain standards under our authorization. These warranties are included in
the programs estimate at completion. Additionally, on occasion we have made commitments beyond
the standard warranty obligation to correct fleet-wide major issues of a particular model. These costs
are expensed as incurred. Warranties issued by our BDS segments principally relate to sales of
military aircraft and weapons hardware and are included in the contract cost estimates. These sales
are generally accompanied by a six to twelve-month warranty period and cover systems, accessories,
equipment, parts, and software manufactured by us to certain contractual specifications. Estimated
costs related to standard warranties are recorded in the period in which the related product sales
occur. The warranty liability recorded at each balance sheet date reflects the estimated number of
months of warranty coverage outstanding for products delivered times the average of historical monthly
warranty payments, as well as additional amounts for certain major warranty issues that exceed a
normal claims level. Estimated costs of these additional warranty issues are considered changes to the
initial liability estimate.
Supplier Penalties
We record an accrual for supplier penalties when an event occurs that makes it probable that a
supplier penalty will be incurred and the amount is reasonably estimable. Until an event occurs, we
fully anticipate accepting all products procured under production-related contracts.
Guarantees
We record a liability in Other accrued liabilities for the fair value of guarantees that are issued or
modified after December 31, 2002. For a residual value guarantee where we received a cash premium,
the liability is equal to the cash premium received at the guarantees inception. For credit and
performance guarantees, the liability is equal to the present value of the expected loss. We determine
the expected loss by multiplying the creditors default rate by the guarantee amount reduced by the
expected recovery, if applicable, for each future period the credit or performance guarantee will be
outstanding. If at inception of a guarantee, we determine there is a probable related contingent loss,
we will recognize a liability for the greater of (a) the fair value of the guarantee as described above or
(b) the probable contingent loss amount.
Note 2 Acquisitions
Vought Aircraft Industries Inc.
On July 30, 2009, we acquired the business, assets and operations of Vought Aircraft Industries, Inc.s
(Vought) 787 business conducted at North Charleston, South Carolina. In connection with the
acquisition, we paid cash consideration of $590 and released Vought from its obligation to repay
amounts of $416 previously advanced by us. Voughts 787 business produces aft fuselage sections,
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NLRB-FOIA-00005867
including the fabrication, assembly and systems installation, for the 787 program. The acquisition of
Vought is intended to strengthen our 787 program and bolster our capability to develop and produce
large composite structures. The results of operations from the acquisition date are included in our
Commercial Airplanes segment.
The final allocation of the purchase price is as follows:
Net inventory $ 241
Property, plant and equipment 170
Goodwill 606
Finite-lived intangible assets
1
49
Accounts payable (24)
Other accrued liabilities (31)
Other long-term liabilities (5)
Total net assets acquired $1,006
1
The weighted average amortization period for finite-lived intangible assets is 17 years.
Other Acquisitions
As part of an acquisition made in 2008, we may be required to pay up to an additional $48 of purchase
price for contingent consideration. The additional consideration is due in the event specified targets are
achieved over a three year period and will be recorded if the targets are met.
Note 3 Goodwill and Acquired Intangibles
Changes in the carrying amount of goodwill by reportable segment for the years ended December 31,
2009, 2008 and 2007 were as follows:
Commercial
Airplanes
Boeing
Military
Aircraft
Network
& Space
Systems
Global
Services
& Support Total
Balance at January 1, 2007
1
$1,365 $593 $ 883 $206 $3,047
Goodwill adjustments (25) (1) (26)
Acquisition 60 60
Balance at December 31, 2007 $1,400 $593 $ 883 $205 $3,081
Goodwill adjustments (35) (35)
Acquisitions
2
84 248 201 68 601
Balance at December 31, 2008 $1,449 $841 $1,084 $273 $3,647
Vought acquisition 606 606
Other 28 18 20 66
Balance at December 31, 2009 $2,083 $841 $1,102 $293 $4,319
1
Effective January 1, 2009, 2008 and 2007, certain programs were realigned among BDS
segments. Prior year amounts have been recast for segment realignments.
2
The increase in goodwill is primarily the result of nine acquisitions during 2008. The purchase
price allocations for five acquisitions were finalized during 2008. The purchase price allocations for
the remaining four acquisitions were finalized in the first and second quarters of 2009.
As of December 31, 2009 and 2008, we had indefinite-lived intangible assets with carrying amounts of
$499 relating to tradenames.
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NLRB-FOIA-00005868
The gross carrying amounts and accumulated amortization of our acquired finite-lived intangible assets
were as follows at December 31:
2009 2008
Gross
Carrying
Amount
Accumulated
Amortization
Gross
Carrying
Amount
Accumulated
Amortization
Distribution rights $1,596 $ 140 $1,265 $ 82
Developed technology 831 581 851 494
Customer base 517 165 397 107
Product know-how 333 98 325 85
Other 198 113 230 114
Total $3,475 $1,097 $3,068 $882
Amortization expense for acquired finite-lived intangible assets for the years ended December 31,
2009 and 2008 was $207 and $166. Estimated amortization expense for the five succeeding years is
as follows: 2010 $239; 2011 $196; 2012 $191; 2013 $167 and 2014 $157.
Non-cash investing and financing transactions related to acquired finite-lived intangibles during 2009
and 2008 were $329 and $235. Total acquired finite-lived intangibles of $604 and $275 remain unpaid
as of December 31, 2009 and 2008.
Note 4 Earnings Per Share
The weighted-average number of shares outstanding used to compute earnings per share are as
follows:
(Shares in millions)
Weighted average shares outstanding 705.9 719.9 750.5
Participating securities 3.7 2.9 9.0
Basic weighted average shares outstanding 709.6 722.8 759.5
Dilutive potential common shares 3.8 6.2 13.0
Diluted weighted average shares outstanding 713.4 729.0 772.5
Basic earnings per share is calculated by the sum of (1) net earnings less declared dividends and
dividend equivalents related to share-based compensation divided by the basic weighted average
shares outstanding and (2) declared dividends and dividend equivalents related to share-based
compensation divided by the weighted average shares outstanding.
The weighted-average number of shares outstanding, included in the table below, is excluded from the
computation of diluted earnings per share because the average market price did not exceed the
exercise/threshold price. However, these shares may be dilutive potential common shares in the future.
(Shares in millions)
Stock options 16.8 14.9
ShareValue Trust 13.2 12.7 25.8
Performance Awards 2.0 2.0 3.0
Performance Shares 0.8 0.7 0.7
Stock units 0.2 0.3
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NLRB-FOIA-00005869
Note 5 Income Taxes
The components of earnings before income taxes were:
U.S. $1,638 $3,794 $5,901
Non-U.S. 93 201 217
$1,731 $3,995 $6,118
Income tax expense/(benefit) consisted of the following:
Current tax expense
U.S. federal $(132) $ 44 $1,260
Non-U.S. 69 29 139
U.S. state 145 20 164
82 93 1,563
Deferred tax expense
U.S. federal 457 1,151 487
Non-U.S. (55) 26 (6)
U.S. state (88) 71 16
314 1,248 497
Total income tax expense $ 396 $1,341 $2,060
Net income tax payments/(refunds) were ($198), $599 and $711 in 2009, 2008 and 2007, respectively.
Our effective income tax rate was 22.9%, 33.6%, and 33.7% for the years ended December 31, 2009,
2008, and 2007, respectively. Our effective tax rate was lower in 2009 primarily because tax credits
such as Research and Development credits represented a higher proportion of earnings before taxes
due to the year-over-year reduction in earnings. The following is a reconciliation of the U.S. federal
statutory tax rate of 35% to our effective income tax rate:
U.S. federal statutory tax 35.0% 35.0% 35.0%
Research and Development credits (10.1) (4.3) (2.4)
Tax on international activities (2.4) (0.7) 1.0
Tax deductible dividends (2.2) (0.8) (0.4)
State income tax provision, net of effect on U.S. federal tax 2.2 1.7 1.6
Other provision adjustments 0.4 2.7 (1.1)
Effective income tax rate 22.9% 33.6% 33.7%
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NLRB-FOIA-00005870
Significant components of our deferred tax assets, net of deferred tax liabilities, at December 31 were
as follows:
2009 2008
Retiree health care accruals $ 2,930 $ 2,970
Inventory and long-term contract methods of income recognition and other (net of
valuation allowance of $23 and $17) (994) (604)
Partnerships and joint ventures (528) (500)
Other employee benefits accruals 1,411 1,367
In-process research and development related to acquisitions 79 93
Net operating loss, credit, and charitable contribution carryovers (net of valuation
allowance of $36 and $31) 477 270
Pension asset (liability) 2,345 3,026
Customer and commercial financing (1,703) (1,604)
Unremitted earnings of non-U.S. subsidiaries (55) (55)
Other net unrealized losses (gains) 66 197
Net deferred tax assets
1
$ 4,028 $ 5,160
1
Of the deferred tax asset for net operating loss and credit carryovers, $184 expires in years ending
from December 31, 2010 through December 31, 2029 and $293 may be carried over indefinitely.
Net deferred tax assets at December 31 were as follows:
2009 2008
Deferred tax assets $13,739 $14,700
Deferred tax liabilities (9,652) (9,492)
Valuation allowance (59) (48)
Net deferred tax assets $ 4,028 $ 5,160
The measurement of deferred tax assets is reduced by a valuation allowance if, based upon available
evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
Included in the net deferred tax assets at December 31, 2009 and 2008 are deferred tax assets in the
amounts of $7,226 and $8,134 related to other comprehensive income.
We have provided for U.S. deferred income taxes and foreign withholding tax in the amount of $55 on
undistributed earnings not considered permanently reinvested in our non-U.S. subsidiaries. We have
not provided for U.S. deferred income taxes or foreign withholding tax on the remainder of
undistributed earnings from our non-U.S. subsidiaries because such earnings are considered to be
permanently reinvested and it is not practicable to estimate the amount of tax that may be payable
upon distribution.
As of December 31, 2009 and 2008, the amount of accrued income tax-related interest and penalties
included in the Consolidated Statements of Financial Position was as follows: interest of $271 and
$215, and penalties of $14 and $14. The amount of interest accrued during 2009 was $45.
The years 2004-2006 are currently being examined by the Internal Revenue Service (IRS), and we
have filed appeals with the IRS for 1998-2003. We are also subject to examination in major state and
international jurisdictions for the 2001-2009 tax years. We believe appropriate provisions for all
outstanding issues have been made for all jurisdictions and all open years
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A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
2009 2008
Unrecognized Tax Benefits January 1, $1,453 $1,272
Gross increases tax positions in prior periods 219 88
Gross decreases tax positions in prior periods (31) (28)
Gross increases current-period tax positions 148 132
Settlements (10)
Lapse of statute of limitations (2) (1)
Unrecognized Tax Benefits December 31, $1,787 $1,453
As of December 31, 2009 and 2008, the total amount of unrecognized tax benefits was $1,787 and
$1,453, of which $1,452 and $1,171 would affect the effective tax rate, if recognized. These amounts are
primarily associated with U.S. federal tax issues such as the tax benefits from the Foreign Sales
Corporation/Extraterritorial Income (FSC/ETI) tax rules, the amount of research and development tax
credits claimed, U.S. taxation of foreign earnings, and valuation issues regarding charitable contributions
claimed. Also included in these amounts are accruals for domestic state tax issues such as the allocation
of income among various state tax jurisdictions and the amount of state tax credits claimed.
Audit outcomes and the timing of audit settlements are subject to significant uncertainty. It is
reasonably possible that within the next 12 months we will resolve some or all of the matters presently
under consideration for 1998-2006 with the IRS. Depending on the timing and outcomes of the audit
settlements, unrecognized tax benefits that affect the effective tax rate could increase earnings by up
to $600 based on current estimates.
The Research and Development credit expired on December 31, 2009. Congress is currently
considering bills that will extend the credit. If the Research and Development credit is not legislatively
enacted there would be an unfavorable impact on our 2010 effective income tax rate.
Note 6 Accounts Receivable
Accounts receivable at December 31 consisted of the following:
2009 2008
U.S. government contracts $3,090 $2,675
Commercial customers 1,206 1,041
Reinsurance receivables 494 495
Sea Launch receivables, net of reserves 438
Non-U.S. military contracts 436 391
Other 162 1,054
Less valuation allowance (41) (54)
Total $5,785 $5,602
The following table summarizes our accounts receivable under long-term contracts that were not
billable or related to outstanding claims as of December 31:
Unbillable Claims
2009 2008 2009 2008
Current $1,273 $ 990 $ 33 $ 32
Expected to be collected after one year 450 467 151 120
Total $1,723 $1,457 $184 $152
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NLRB-FOIA-00005872
Unbillable receivables on long-term contracts arise when the sales or revenues based on performance
attainment, though appropriately recognized, cannot be billed yet under terms of the contract as of the
balance sheet date. Accounts receivable related to claims are items that we believe are earned, but
are subject to uncertainty concerning their determination or ultimate realization. Accounts receivable,
other than those described above, expected to be collected after one year are not material.
Sea Launch
On June 22, 2009, the Sea Launch venture, in which Boeing Commercial Satellite Company (BCSC), a
subsidiary of The Boeing Company, is a 40% partner with S.P. Koroley Rocket and Space Corporation
Energia of Russia (25%), Aker ASA of Norway (Aker) (20%), PO Yuzhnoye Mashinostroitelny Zavod of
Ukraine (10%) and KB Yuzhnoye of Ukraine (5%), filed a voluntary petition for relief under Chapter 11
of Title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware
(the Chapter 11 Filing). The Chapter 11 Filing constituted an event of default or otherwise accelerated
approximately $448 of outstanding indebtedness of Sea Launch for which we and an affiliate of Aker
had previously issued credit guarantees on a joint-and-several basis. On July 1, 2009, we paid the
entire $448 due under our guarantee. Among other options, we have rights to reimbursement from Sea
Launch as well as the other Sea Launch partners, who are each obligated to reimburse us so that we
contribute no more than our proportional ownership percentage (40% or $179) in Sea Launch of the
aggregate guarantee payment obligations. On September 11, 2009, an affiliate of Aker executed a
promissory note which obligates it to pay us $122 in three payments. The first payment of $40 was
received in December 2009 and the final two payments are due in 2010. On October 19, 2009, we filed
a Notice of Arbitration with the Stockholm Chamber of Commerce seeking reimbursement from the
other Sea Launch partners of the remaining $147 related to our guarantee payment.
In addition, as a result of the Sea Launch bankruptcy, $523 of principal and interest associated with a
loan by BCSC also become repayable by Sea Launch. Certain other Sea Launch partners have
guaranteed portions of this loan (collectively, 40% of the total amount is guaranteed). We have also
filed certain proofs of claim in the bankruptcy on account of various goods and services provided to
Sea Launch prior to the bankruptcy filing.
We intend to pursue vigorously all of our rights and remedies against Sea Launch and the other Sea
Launch partners with respect to the amounts described above.
Receivables at December 31, 2009 consisted of the following:
Gross
Receivables
Established
Reserves
Net
Receivable
Balance
Credit guarantee
Promissory note $ 82 $ 82
Other 326 $179 147
Receivables related to partner loans (principal and
interest) 523 314 209
Total $931 $493 $438
In the event we are unable to secure reimbursement from Sea Launch or certain Sea Launch partners
of $229 related to our payment under the credit guarantees and $209 related to the previously made
loans to Sea Launch, we could incur additional pre-tax charges of up to $438.
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NLRB-FOIA-00005873
Sea Launch management continues to operate the business and has obtained debtor-in-possession
financing to address cash needs. In October 2009, the bankruptcy court granted Sea Launch a three
month extension to file a reorganization plan, and Sea Launchs motion requesting an additional
extension through April 14, 2010 is scheduled to be heard on March 4, 2010.
Note 7 Inventories
Inventories at December 31 consisted of the following:
2009 2008
Long-term contracts in progress $ 14,673 $ 14,051
Commercial aircraft programs 18,568 19,309
Commercial spare parts, used aircraft, general stock materials and other 5,004 4,340
38,245 37,700
Less advances and progress billings (21,312) (22,088)
$ 16,933 $ 15,612
Long-Term Contracts in Progress
Delta launch program inventories that will be sold at cost to United Launch Alliance (ULA) under an
inventory supply agreement that terminates on March 31, 2021 are included in long-term contracts in
progress inventories. At December 31, 2009, and 2008, the inventory balance was $1,685 (net of $120
of advances received under the inventory supply agreement) and $1,822, of which $1,070 relates to
yet unsold launches at December 31, 2009. ULA is continuing to assess the future of the Delta II
program. In the event ULA is unable to sell additional Delta II inventory, earnings could be reduced by
up to $62.
Commercial Aircraft Programs
Inventory includes deferred production costs which represent commercial aircraft programs production
costs incurred on in-process and delivered units in excess of the estimated average cost of such units.
As of December 31, 2009 and 2008, the balance of deferred production costs and unamortized tooling
related to commercial aircraft programs in production, except the 777 and 787 programs, was
insignificant relative to the programs balance-to-go estimates. As of December 31, 2009 and 2008, all
significant excess deferred production costs or unamortized tooling costs are recoverable from existing
firm orders for the 777 program.
For the 777 program, inventory included $510 and $1,223 for deferred production cost, and $211 and
$255 of unamortized tooling at December 31, 2009 and 2008.
For the 787 program, inventory included $3,885 and $3,021 of work in process (including deferred
production costs), $2,187 and $2,548 of supplier advances, and $1,231 and $755 of tooling and other
non-recurring costs at December 31, 2009 and 2008. In August 2009, we concluded that the first three
flight-test airplanes for the 787 program will not be sold as previously anticipated due to the inordinate
amount of rework and unique and extensive modifications made to those aircraft. Therefore, $2,481 in
costs previously recorded for the first three flight-test airplanes were reclassified from program
inventory to Research and development expense during the third quarter of 2009. Additionally,
production costs incurred from August to December 2009 of $212 related to these flight-test airplanes
were also included in research and development expense.
Commercial aircraft program inventory included amounts credited in cash or other consideration (early
issue sales consideration), to airline customers totaling $1,577 and $1,271 at December 31, 2009 and
2008.
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NLRB-FOIA-00005874
Commercial Spare Parts, Used Aircraft, General Stock Materials and Other
As a normal course of our Commercial Airplanes segment production process, our inventory may
include a small quantity of airplanes that are completed but unsold. As of December 31, 2009 and
2008, the value of completed but unsold aircraft in inventory was insignificant. Inventory balances
included $235 subject to claims or other uncertainties relating to the A-12 program at December 31,
2009 and 2008 (See Note 20).
Note 8 Customer Financing
Customer financing at December 31 consisted of the following:
2009 2008
Aircraft financing
Notes receivable $ 779 $ 615
Investment in sales-type/finance leases 2,391 2,528
Operating lease equipment, at cost, less accumulated depreciation of $784
and $771 2,737 3,152
Other financing
Notes receivable 229 256
Less allowance for losses on receivables (302) (269)
$5,834 $6,282
The components of investment in sales-type/finance leases at December 31 were as follows:
2009 2008
Minimum lease payments receivable $ 3,147 $ 3,451
Estimated residual value of leased assets 677 735
Unearned income (1,433) (1,658)
$ 2,391 $ 2,528
Aircraft financing operating lease equipment primarily includes jet and commuter aircraft. At
December 31, 2009 and 2008, aircraft financing operating lease equipment included $385 and $685 of
equipment available for sale or re-lease. At December 31, 2009 and 2008, we had firm lease
commitments for $345 and $305 of this equipment.
When our Commercial Airplanes segment is unable to immediately sell used aircraft, it may place the
aircraft under an operating lease. It may also provide customer financing with a note receivable. The
carrying amount of the Commercial Airplanes segment used aircraft under operating leases and notes
receivable included as a component of customer financing totaled $203 and $232 as of December 31,
2009 and 2008.
Impaired receivables and the allowance for losses on those receivables consisted of the following at
December 31:
2009 2008
Impaired receivables with no specific impairment allowance $ 1 $163
Impaired receivables with specific impairment allowance 144 16
Allowance for losses on impaired receivables 2 8
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NLRB-FOIA-00005875
The average recorded investment in impaired receivables as of December 31, 2009, 2008 and 2007,
was $162, $197, and $589, respectively. Income recognition is generally suspended for receivables at
the date full recovery of income and principal becomes not probable. Income is recognized when
receivables become contractually current and performance is demonstrated by the customer. Interest
income recognized on such receivables was $9, $14, and $50 for the years ended December 31, 2009,
2008 and 2007, respectively.
The change in the allowance for losses on receivables for the years ended December 31, 2009, 2008
and 2007, consisted of the following:
Allowance for
Losses
Beginning balance January 1, 2007 $(254)
Customer financing valuation benefit/(provision) 60
Other (1)
Ending balance December 31, 2007 (195)
Customer financing valuation benefit/(provision) (84)
Reduction in customer financing assets 10
Ending balance December 31, 2008 (269)
Customer financing valuation benefit/(provision) (45)
Reduction in customer financing assets 12
Ending balance December 31, 2009 $(302)
Aircraft financing is collateralized by security in the related asset. The value of the collateral is closely
tied to commercial airline performance and may be subject to reduced valuation with market decline.
Our financing portfolio has a concentration of various model aircraft. Aircraft financing carrying values
related to major aircraft concentrations at December 31 were as follows:
2009 2008
717 Aircraft ($662 and $694 accounted for as operating leases)* $2,262 $2,365
757 Aircraft ($708 and $780 accounted for as operating leases)* 902 991
737 Aircraft ($400 and $453 accounted for as operating leases) 553 464
767 Aircraft ($154 and $181 accounted for as operating leases) 465 540
MD-11 Aircraft ($384 and $536 accounted for as operating leases)* 384 536
* Out of production aircraft
We recorded charges related to customer financing asset impairment in operating earnings, primarily
as a result of declines in projected future cash flows. These charges for the years ended December 31
were as follows:
2009 2008 2007
Boeing Capital Corporation $91 $35 $33
Other Boeing 8 15
$99 $35 $48
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NLRB-FOIA-00005876
Scheduled receipts on customer financing are as follows:
Year
Principal
Payments on
Notes Receivable
Sales-
Type/
Finance
Lease
Payments
Receivable
Operating
Lease
Equipment
Payments
Receivable
2010 $284 $ 277 $349
2011 153 321 298
2012 129 316 239
2013 170 273 189
2014 55 273 140
Beyond 2014 220 1,687 343
Customer financing assets leased under capital leases and subleased to others were not significant in
2009 and 2008.
Note 9 Property, Plant and Equipment
Property, plant and equipment at December 31 consisted of the following:
2009 2008
Land $ 539 $ 540
Buildings and land improvements 9,548 9,133
Machinery and equipment 10,383 9,990
Construction in progress 1,109 1,379
21,579 21,042
Less accumulated depreciation (12,795) (12,280)
$ 8,784 $ 8,762
Depreciation expense was $1,066, $1,013, and $978 for the years ended December 31, 2009, 2008
and 2007, respectively. Interest capitalized during the years ended December 31, 2009, 2008 and
2007 totaled $90, $99, and $117, respectively. At December 31, 2009 and 2008, we had $316 and
$334 of operating lease properties, net of $262 and $242 of accumulated depreciation.
Rental expense for leased properties was $273, $426, and $411, for the years ended December 31,
2009, 2008 and 2007, respectively. For the same periods, these expenses, substantially all minimum
rentals, were net of sublease income of $9, $14, and $26. At December 31, 2009, minimum rental
payments under capital leases aggregated $83, and payments due under capital leases during the
next five years are not material. Minimum rental payments under operating leases with initial or
remaining terms of one year or more aggregated $1,159, net of sublease payments of $11, at
December 31, 2009. Non-cancellable future rentals due from customers for equipment on operating
leases aggregated $136 at December 31, 2009. Payments due under operating leases net of sublease
amounts and non-cancellable future rentals during the next five years are as follows:
2010 2011 2012 2013 2014
Minimum operating lease payments, net of sublease amounts $213 $171 $129 $100 $88
Future rentals due from customers for equipment on operating
leases 17 16 16 15 14
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NLRB-FOIA-00005877
We had accounts payable related to purchases of property, plant and equipment of $131, $157, and
$150 for the years ended December 31, 2009, 2008, and 2007, respectively.
Note 10 Investments
Our investments, which are recorded in Short-term investments or Investments, consisted of the
following at December 31:
2009 2008
Time deposits $1,900
Available-for-sale investments 139 $ 352
Equity method investments 974 942
Other investments 25 45
Total investments $3,038 $1,339
Available-For-Sale Investments
Our investments in available-for-sale debt and equity securities consisted of the following at
December 31:
2009 2008
Cost or
Amortized
Cost
Gross
Unrealized
Gain
Gross
Unrealized
Loss
Fair
Value
Cost or
Amortized
Cost
Gross
Unrealized
Gain
Gross
Unrealized
Loss
Fair
Value
Debt:
Residential mortgage-
backed securities $107 $107 $285 $ (89) $196
Other debt obligations 6 $ (1) 5 172 (16) 156
Equity 40 $1 (14) 27
Total $153 $1 $(15) $139 $457 $(105) $352
Gross realized gains and losses on available-for-sale investment securities for the years ended
December 31, were as follows:
2009 2008 2007
Gains $ 4 $ 46 $ 5
Losses, including other-than-temporary-impairments (48) (107) (11)
Net $(44) $ (61) $ (6)
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NLRB-FOIA-00005878
The contractual maturities of available-for-sale debt securities at December 31, 2009, were as follows:
Amortized
Cost
Fair
Value
Due in 1 year or less $ 1 $ 1
Due from 1 to 5 years 4 3
Due from 5 to 10 years 1 1
Due after 10 years 107 107
Total $113 $112
Equity Method Investments
Our effective ownership percentages and balances of equity method investments consisted of the
following as of December 31:
Segment
Ownership
Percentages Investment Balance
2009 2008
United Launch Alliance Network & Space Systems 50% $ 962 $1,006
United Space Alliance Network & Space Systems 50% (150)
(1)
(197)
(1)
Other Primarily Commercial
Airplanes and Global
Services & Support 162 133
Total Equity method investments $ 974 $ 942
(1)
Credit balances are a result of our proportionate share of the joint ventures pension and
postretirement related adjustments which reduce the carrying value of the investment.
Note 11 Liabilities, Commitments and Contingencies
Other Accrued Liabilities
Other accrued liabilities at December 31 consisted of the following:
2009 2008
Accrued compensation and employee benefit costs $ 4,662 $ 4,479
Environmental 706 731
Product warranties 999 959
Forward loss recognition
(a)
2,738 1,458
Other 3,717 3,937
Total $12,822 $11,564
(a)
Forward loss recognition relates primarily to 747 and Airborne Early Warning and Control
(AEW&C) in 2009 and 2008.
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Environmental
The following table summarizes environmental matter activity during the years ended December 31,
2009 and 2008.
Environmental
Liabilities
2009 2008
Beginning balance January 1 $731 $ 679
Reductions for payments made (89) (106)
Changes in estimates 64 158
Ending balance December 31 $706 $ 731
The liabilities recorded represent our best estimate of costs expected to be incurred to remediate,
operate, and maintain sites over periods of up to 30 years. It is reasonably possible that we may incur
additional charges because of regulatory complexities, higher than expected costs and the risk of
unidentified contamination. As part of our estimating process, we develop a range of reasonably
possible alternate scenarios which include highest cost estimates to remediate identified contamination
at all sites based on our experience and existing laws and regulations. At December 31, 2009 and
2008 our reasonably possible highest cost estimate for all remediation sites exceeded our recorded
liabilities by $948 and $1,206.
Product Warranties
The following table summarizes product warranty activity recorded for the years ended December 31,
2009 and 2008.
Product Warranty
Liabilities
2009 2008
Beginning balance January 1 $ 959 $ 962
Additions for current year deliveries 167 140
Reductions for payments made (237) (253)
Changes in estimates 110 110
Ending balance December 31 $ 999 $ 959
Discontinued Operations
As part of the 2004 purchase and sale agreement with General Electric Capital Corporation related to
the sale of Boeing Capital Corporations (BCC) Commercial Financial Services business, BCC is
involved in a loss sharing arrangement for losses on transferred portfolio assets, such as asset sales,
provisions for loss or asset impairment charges offset by gains from asset sales. At December 31,
2009 and 2008, our maximum future cash exposure to losses associated with the loss sharing
arrangement was $234 and $232. As of December 31, 2009 and 2008, the accrued liability under the
loss sharing arrangement was $77 and $39.
Commercial Aircraft Commitments
In conjunction with signing definitive agreements for the sale of new aircraft, we have entered into
specified-price trade-in commitments with certain customers that give them the right to trade in used
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aircraft upon the purchase of Sale Aircraft. The total contractual trade-in value was $427 and $1,045 as
of December 31, 2009 and 2008. We anticipate that a significant portion of these commitments will not
be exercised by customers.
The probability that trade-in commitments will be exercised is determined by using both quantitative
information from valuation sources and qualitative information from other sources. The probability of
exercise is continually assessed, taking into consideration the current economic environment. Trade-in
commitments, which can be terminated by mutual consent with the customer, may be exercised only
during the period specified in the agreement, and require advance notice by the customer. The
estimated fair value of trade-in aircraft related to probable contractual trade-in commitments was $34
as of December 31, 2009. Trade-in commitment agreements have expiration dates from 2010 through
2023.
Future Lease Commitments
As of December 31, 2009 and 2008, future lease commitments on aircraft and other commitments not
recorded on the Consolidated Statements of Financial Position totaled $159 and $197. These lease
commitments extend through 2020, and our intent is to recover these lease commitments through
sublease arrangements. As of December 31, 2009, the future lease commitments on aircraft for each
of the next five years were as follows: $16 in 2010, $16 in 2011, $16 in 2012, $16 in 2013, and $16 in
2014. As of December 31, 2009 and 2008, Other accrued liabilities included $14 and $32 attributable
to adverse commitments under these lease arrangements.
Financing Commitments
Financing commitments totaled $10,409 and $10,145 as of December 31, 2009 and 2008. We
anticipate that a significant portion of these commitments will not be exercised by the customers as we
continue to work with third party financiers to provide alternative financing to customers. However,
there can be no assurances that we will not be required to fund greater amounts than historically
required.
In connection with the formation of ULA, we and Lockheed Martin Corporation (Lockheed) each agreed
to extend a line of credit to ULA of up to $200 to support its working capital requirements during the
five-year period following December 1, 2006. ULA did not request any funds under the line of credit as
of December 31, 2009. We and Lockheed have also each committed to provide ULA with up to $122 of
additional capital contributions in the event ULA does not have sufficient funds to make a required
payment to us under an inventory supply agreement. See Note 7.
We have entered into standby letters of credit agreements and surety bonds with financial institutions
primarily relating to the guarantee of future performance on certain contracts. Contingent liabilities on
outstanding letters of credit agreements and surety bonds aggregated approximately $7,052 and
$5,763 as of December 31, 2009 and 2008.
C-17
At December 31, 2009, our backlog included 11 C-17 aircraft currently under contract with the U.S. Air
Force (USAF) as well as international orders for 7 C-17 aircraft. Backlog does not include 8 aircraft
funded in the Fiscal Year 2009 (FY09) supplemental defense spending bill and 10 aircraft funded in the
2010 defense appropriations bill. At December 31, 2009, inventory expenditures and potential
termination liabilities to suppliers for aircraft not included in backlog, primarily the 8 FY09 aircraft,
totaled approximately $375. Should additional orders not materialize, it is reasonably possible that we
will decide in 2010 to complete production of the C-17. We are still evaluating the full financial
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impact of a potential production shut-down, including any recovery that would be available from the
U.S. government. Such recovery from the U.S. government would not include the costs incurred by us
resulting from our direction to suppliers to begin working on aircraft beyond those currently under
contract with the USAF.
Satellites
Certain launch and satellite sales contracts include provisions that specify that we bear risk of loss
associated with the launch phase through acceptance in orbit by the customer. We have historically
purchased insurance to cover these exposures when allowed under the terms of the contract and when
economically advisable. The current insurance market reflects high premium rates and also suffers
from a lack of capacity to handle all insurance requirements. We make decisions on the procurement
of insurance based on our analysis of risk. There is a contractual launch scheduled for 2010 for which
full insurance coverage may not be available or, if available, could be prohibitively expensive. We will
continue to review this risk. We estimate that the potential uninsured amount for this launch could be
approximately $360.
Company Owned Life Insurance
McDonnell Douglas Corporation insured its executives with Company Owned Life Insurance (COLI),
which are life insurance policies with a cash surrender value. Although we do not use COLI currently,
these obligations from the merger with McDonnell Douglas are still a commitment at this time. We have
loans in place to cover costs paid or incurred to carry the underlying life insurance policies. As of
December 31, 2009 and 2008, the cash surrender value was $360 and $331 and the total loans were
$337 and $317. As we have the right to offset the loans against the cash surrender value of the
policies, we present the net asset in Other assets on the Consolidated Statements of Financial Position
as of December 31, 2009 and 2008.
Note 12 Arrangements with Off-Balance Sheet Risk
We enter into arrangements with off-balance sheet risk in the normal course of business, primarily in
the form of guarantees.
Third-Party Guarantees
The following tables provide quantitative data regarding our third-party guarantees. The maximum
potential payments represent a worst-case scenario, and do not necessarily reflect our expected
results. Estimated proceeds from collateral and recourse represent the anticipated values of assets we
could liquidate or receive from other parties to offset our payments under guarantees.
As of December 31, 2009
Maximum
Potential
Payments
Estimated
Proceeds
from
Collateral/
Recourse
Carrying
Amount of
Liabilities*
Contingent repurchase commitments $3,958 $3,940 $ 7
Indemnifications to ULA 682 23
Other credit guarantees 119 109 2
Residual value guarantees 51 44 10
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As of December 31, 2008
Maximum
Potential
Payments
Estimated
Proceeds
from
Collateral/
Recourse
Carrying
Amount
of
Liabilities*
Contingent repurchase commitments $4,024 $4,014 $ 7
Indemnifications to ULA 1,184 7
Credit guarantees related to the Sea Launch venture** 451 271 180
Other credit guarantees 158 145 11
Residual value guarantees 51 47 10
* Amounts included in Other accrued liabilities
** See Note 6.
Contingent Repurchase Commitments We have entered into contingent repurchase commitments
with certain customers in conjunction with signing definitive agreements for the sale of new aircraft
(Sale Aircraft). Under these commitments, we agreed to repurchase the Sale Aircraft at a specified
price, generally 10 years after delivery of the Sale Aircraft. Our repurchase of the Sale Aircraft is
contingent upon a future, mutually acceptable agreement for the sale of additional new aircraft, and the
subsequent exercise by the customer of its right to sell the Sale Aircraft to us. The repurchase price
specified in contingent repurchase commitments is generally lower than the expected fair value at the
specified repurchase date. Estimated Proceeds from Collateral/Recourse in the table above represent
the lower of the contracted repurchase price or the expected fair value of each aircraft at the specified
repurchase date.
Indemnifications to ULA We agreed to indemnify ULA against losses in the event that costs
associated with $1,360 of Delta launch program inventories included in contributed assets and $1,860
of Delta program inventories subject to an inventory supply agreement are not recoverable and
allowable from existing and future orders. The term of the inventory indemnification extends to
December 31, 2020. Since inception, ULA has consumed $1,111 of inventories that were contributed
by us and has made advances of $120 to us under the inventory supply agreement. The table above
includes indemnifications to ULA for contributed Delta launch program inventory of $277 and $813,
plus $348 related to the pricing of certain contracts and $57 and $23 related to miscellaneous Delta
contracts at December 31, 2009 and 2008.
We agreed to indemnify ULA against potential losses that ULA may incur in the event ULA is unable to
obtain certain additional contract pricing from the USAF for four satellite missions. We believe ULA is
entitled to additional contract pricing. In December 2008, ULA submitted a claim to the USAF to
re-price the contract value for two of the four satellite missions covered by the indemnification. In
March 2009, the USAF issued a denial of that claim and in June 2009, ULA filed an appeal. During
2009, the USAF exercised its option for a third satellite mission. ULA intends to submit a claim to the
USAF in 2010 to re-price the contract value of the third mission. If ULA is unsuccessful obtaining
additional pricing, we may be responsible for a portion of the shortfall and may record up to $382 in
pre-tax losses associated with the four missions.
Other Credit Guarantees We have issued credit guarantees, principally to facilitate the sale and/or
financing of commercial aircraft. Under these arrangements, we are obligated to make payments to a
guaranteed party in the event that lease or loan payments are not made by the original lessee or
debtor or certain specified services are not performed. A substantial portion of these guarantees has
been extended on behalf of original lessees or debtors with less than investment-grade credit. Our
commercial aircraft credit-related guarantees are collateralized by the underlying commercial aircraft
and certain other assets. Current outstanding credit guarantees expire within the next 11 years.
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Residual Value Guarantees We have issued various residual value guarantees principally to facilitate
the sale and financing of certain commercial aircraft. Under these guarantees, we are obligated to
make payments to the guaranteed party if the related aircraft or equipment fair values fall below a
specified amount at a future time. These obligations are collateralized principally by commercial aircraft
and expire within the next 9 years.
Other Indemnifications
In conjunction with our sales of the Electron Dynamic Devices, Inc. and Rocketdyne Propulsion and
Power businesses and the sale of our Commercial Airplanes facilities in Wichita, Kansas and Tulsa
and McAlester, Oklahoma in 2005, we provided indemnifications to the buyers relating to pre-closing
environmental contamination and certain other items. The terms of the indemnifications are indefinite.
As it is impossible to assess whether there will be damages in the future or the amounts thereof (if
any), we cannot estimate the maximum potential amount of future payments under these guarantees.
Therefore, no liability has been recorded.
Industrial Revenue Bonds
Industrial Revenue Bonds (IRBs) issued by the City of Wichita are used to finance the purchase and/or
construction of real and personal property at our Wichita site. Tax benefits associated with IRBs
include a ten-year property tax abatement and a sales tax exemption from the Kansas Department of
Revenue. We record the property on our Consolidated Statements of Financial Position, along with a
capital lease obligation to repay the proceeds of the IRB. We have also purchased the IRBs and
therefore are the bondholders as well as the borrower/lessee of the property purchased with the IRB
proceeds.
The capital lease obligation and IRB asset are recorded net in the Consolidated Statements of
Financial Position. As of December 31, 2009 and 2008, the assets and liabilities associated with the
City of Wichita IRBs were $856 and $887.
Note 13 Debt
On March 9, 2009, we filed a public shelf registration with the U.S. Securities and Exchange
Commission (SEC) for the issuance of an indeterminate amount of debt securities and common stock.
On March 13, 2009, we issued notes totaling $1,850, which included $700 bearing an interest rate of
5% due March 15, 2014, $650 bearing an interest rate of 6% due March 15, 2019 and $500 bearing an
interest rate of 6.875% due March 15, 2039. The net proceeds after deducting the discount,
underwriting fees and issuance costs were $1,817. On July 28, 2009, we issued notes totaling $1,950,
which included $750 bearing an interest rate of 3.5% due February 15, 2015, $750 bearing an interest
rate of 4.875% due February 15, 2020 and $450 bearing an interest rate of 5.875% due February 15,
2040. The net proceeds after deducting the discount, underwriting fees and issuance costs were
$1,914. On November 20, 2009, we issued notes totaling $1,200, which included $700 bearing an
interest rate of 1.875% due November 20, 2012, and $500 bearing an interest rate of 3.750% due
November 20, 2016. The net proceeds after deducting the discount, underwriting fees and issuance
costs were $1,184. We may redeem each series of notes issued in 2009 at any time prior to maturity,
in whole or in part, upon at least 30 days notice, at a redemption price equal to the principal amount of
the notes to be redeemed plus a make-whole premium, together with accrued interest on such notes to
the redemption date. The notes are unsecured senior obligations and rank equally in right of payment
with all our existing and future unsecured and unsubordinated indebtedness.
On October 30, 2008, BCC filed a public shelf registration for up to $5,000 of debt securities with the
SEC that became effective on November 12, 2008. On October 27, 2009, BCC issued notes totaling
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$1,000, which included $500 bearing an interest rate of 3.25% due October 27, 2014 and $500 bearing
an interest rate of 4.70% due October 27, 2019. The net proceeds after deducting the discount,
underwriting fees and issuance costs were $994. The remaining $4,000 remains available for potential
debt issuance. The availability of funding under BCCs shelf registration is dependent on investor
demand and market conditions.
Total debt interest incurred, including amounts capitalized, was $610, $520, and $591 for the years
ended December 31, 2009, 2008, and 2007, respectively. Interest expense recorded by BCC is
reflected as a separate line item on our Consolidated Statements of Operations, and is included in
earnings from operations. Total Company interest payments were $502, $493, and $616 for the years
ended December 31, 2009, 2008, and 2007, respectively.
We have $3,525 currently available under credit line agreements, of which $2,000 is a 5-year credit
facility expiring in November 2012 and $1,525 is a 364-day revolving credit facility expiring in November
2010. Both the 5-year and 364-day credit facilities have a one-year term out option which allows us to
extend the maturity of any borrowings one year beyond the aforementioned expiration dates. We have
given BCC exclusive access to $1,500 under these arrangements. We continue to be in full compliance
with all covenants contained in our debt or credit facility agreements, including those at BCC.
Short-term debt and current portion of long-term debt at December 31 consisted of the following:
2009 2008
Consolidated
Total
BCC
Only
Consolidated
Total
BCC
Only
Unsecured debt securities $644 $644 $514 $514
Non-recourse debt and notes 24 6 24 5
Capital lease obligations 14 9 9 9
Other notes 25 13
$707 $659 $560 $528
Debt at December 31 consisted of the following:
2009 2008
Boeing Capital Corporation debt:
Unsecured debt securities
1.480% 7.580% due through 2023 $ 3,952 $3,516
Non-recourse debt and notes
1.330% 5.790% notes due through 2013 61 66
Capital lease obligations
0.870% due through 2015 62 70
Subtotal Boeing Capital Corporation debt $ 4,075 $3,652
Other Boeing debt:
Unsecured debentures and notes
1.875% 9.750% due through 2043 $ 8,349 $3,406
Non-recourse debt and notes
Enhanced equipment trust 360 380
Capital lease obligations due through 2017 14 1
Other notes 126 73
Subtotal other Boeing debt $ 8,849 $3,860
Total debt $12,924 $7,512
At December 31, 2009, $123 of BCC debt was collateralized by portfolio assets and underlying
equipment totaling $209. The debt consists of the 0.87% to 5.79% notes due through 2015.
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Maturities of long-term debt for the next five years are as follows:
2010 2011 2012 2013 2014
BCC $645 $798 $ 878 $ 652 $ 526
Other Boeing 49 91 1,077 628 763
$694 $889 $1,955 $1,280 $1,289
Note 14 Postretirement Plans
We have various pension plans covering substantially all employees. We fund our major pension plans
through trusts. Pension assets are placed in trust solely for the benefit of the plans participants, and
are structured to maintain liquidity that is sufficient to pay benefit obligations as well as to keep pace
over the long term with the growth of obligations for future benefit payments.
We also have postretirement benefits other than pensions which consist principally of health care
coverage for eligible retirees and qualifying dependents, and to a lesser extent, life insurance to certain
groups of retirees. Retiree health care is provided principally until age 65 for approximately half those
retirees who are eligible for health care coverage. Certain employee groups, including employees
covered by most United Auto Workers bargaining agreements, are provided lifetime health care
coverage.
The funded status of the plans is measured as the difference between the plan assets at fair value and
the projected benefit obligation (PBO). We have recognized the aggregate of all overfunded plans in
Pension plan assets, net and the aggregate of all underfunded plans in either Accrued retiree health
care or Accrued pension plan liability, net. The portion of the amount by which the actuarial present
value of benefits included in the PBO exceeds the fair value of plan assets, payable in the next 12
months, is reflected in Other accrued liabilities.
Effective December 31, 2008, a new accounting standard on defined benefit pension and other
postretirement plans requires us to measure plan assets and benefit obligations at fiscal year end. We
previously performed this measurement at September 30 of each year. Beginning in fourth quarter of
2007 in accordance with this standard, we eliminated the use of a three-month lag period when
recognizing the impact of curtailments or settlements and, instead, recognize these amounts in the
period in which they occur. As a result of implementing the measurement date provisions of this
standard, we recorded an additional quarter of pension and other postretirement benefit (OPB) cost as
of January 1, 2008 as a $178 decrease to Retained earnings and a $92 decrease to Accumulated
other comprehensive loss, which resulted in a net decrease of $86 to Shareholders equity. The
provisions of this standard do not permit retrospective application.
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The components of net periodic benefit cost are as follows:
Pension
Benefits
Years ended December 31, 2009 2008 2007 2009 2008 2007
Components of net periodic benefit cost
Service cost $ 1,090 $ 952 $ 953 $132 $126 $136
Interest cost 2,964 2,823 2,681 466 459 473
Expected return on plan assets (3,738) (3,811) (3,507) (5) (8) (8)
Amortization of prior service costs 242 206 200 (90) (93) (88)
Recognized net actuarial loss 650 392 764 92 86 159
Settlement/curtailment loss 13 10
Net periodic benefit cost $ 1,221 $ 562 $ 1,101 $595 $570 $672
Net periodic benefit cost included in Earnings
from operations $ 879 $ 696 $ 1,082 $615 $507 $648
A portion of net periodic benefit cost is allocated to production as product costs and may remain in
inventory at the end of each reporting period.
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The following tables show changes in the benefit obligation, plan assets and funded status of both
pensions and OPB. Benefit obligation balances presented below reflect the PBO for our pension plans,
and accumulated postretirement benefit obligations (APBO) for our OPB plans.
12 Month Period Ending
December 31, 2009
15 Month Period Ending
December 31, 2008
Pension
Other
Postretirement
Benefits Pension
Other
Postretirement
Benefits
Change in benefit obligation
Beginning balance $49,017 $ 7,859 $45,734 $ 7,662
Service cost 1,090 132 1,188 159
Interest cost 2,964 466 3,524 574
Plan participants contributions 9 12
Amendments 143 (18) 470 (6)
Actuarial (gain)/loss 1,445 (374) 1,255 135
Settlement/curtailment/acquisitions/
dispositions, net (68) 1
Benefits paid (2,515) (511) (3,056) (630)
Exchange rate adjustment 81 22 (111) (35)
Ending balance $52,166 $ 7,576 $49,017 $ 7,859
Change in plan assets
Beginning balance at fair value $40,597 $ 79 $50,439 $ 96
Actual return on plan assets 6,074 13 (7,296) (22)
Company contribution 1,582 24 531 19
Plan participants contributions 9 2 12 1
Settlement/curtailment/acquisitions/
dispositions, net (67) (1) 1
Benefits paid (2,459) (28) (2,991) (16)
Exchange rate adjustment 74 (98)
Ending balance at fair value $45,810 $ 89 $40,597 $ 79
Amounts recognized in Consolidated
Statements of Financial Position at
December 31, consist of:
Pension plan assets, net $ 16 $ 16
Other accrued liabilities (57) $ (438) (53) $ (458)
Accrued retiree health care (7,049) (7,322)
Accrued pension plan liability, net (6,315) (8,383)
Net amount recognized $ (6,356) $(7,487) $ (8,420) $(7,780)
Amounts recognized in Accumulated other comprehensive loss at December 31, are as follows:
Pensions
Benefits
2009 2008 2009 2008
Net actuarial loss $17,012 $18,556 $1,197 $1,644
Prior service cost/(credit) 1,331 1,430 (332) (403)
Total recognized in Accumulated other comprehensive
loss $18,343 $19,986 $ 865 $1,241
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The estimated amount that will be amortized from Accumulated other comprehensive loss into net
periodic benefit cost during the year ended December 31, 2010 is as follows:
Pensions
Other
Postretirement
Benefits
Recognized net actuarial loss $ 776 $ 56
Amortization of prior service costs 248 (78)
Total $1,024 $(22)
The accumulated benefit obligation (ABO) for all pension plans was $47,549 and $45,218 at
December 31, 2009 and 2008. Six of our eight major pension plans have ABOs that exceed plan
assets at December 31, 2009. Key information for all plans with ABO in excess of plan assets as of
December 31, is as follows:
2009 2008
Projected benefit obligation $26,141 $48,658
Accumulated benefit obligation 24,227 44,863
Fair value of plan assets 22,205 40,225
The Medicare Prescription Drug, Improvement and Modernization Act of 2003 reduced our APBO by
$497 and $491 at December 31, 2009 and 2008. These reductions/actuarial gains are amortized over
the expected average future service of current employees.
Assumptions
December 31 September 30
2009 2008 2007 2006
Discount rate: pension and OPB 5.80% 6.10% 6.20% 5.90%
Expected return on plan assets 8.00% 8.00% 8.25% 8.25%
Rate of compensation increase 5.50% 5.50% 5.50% 5.50%
The discount rate for each pension plan is determined by discounting the plans expected future benefit
payments using a yield curve developed from high quality bonds that are rated as Aa or better by
Moodys as of the measurement date. The yield curve is fitted to yields developed from bonds at
various maturity points. Bonds with the ten percent highest and the ten percent lowest yields are
omitted. A portfolio of about 400 bonds is used to construct the yield curve. Since corporate bond
yields are generally not available at maturities beyond 30 years, it is assumed that spot rates will
remain level beyond that 30-year point. The present value of each plans benefits is calculated by
applying the spot/discount rates to projected benefit cash flows. All bonds are U.S. issues, with a
minimum outstanding of $50.
The disclosed rate is the average rate for all the plans, weighted by the projected benefit obligation. As
of December 31, 2009, the weighted average was 5.80%, and the rates for individual plans ranged
from 3.80% to 6.40%. As of December 31, 2008, the weighted average was 6.10%, and the rates for
individual plans ranged from 4.25% to 6.60%.
The pension funds expected return on plan assets assumption is derived from a review of actual
historical returns achieved by the pension trust and anticipated future long-term performance of
individual asset classes. While consideration is given to recent trust performance and historical returns,
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the assumption represents a long-term, prospective return. The expected return on plan assets
component of the net periodic benefit cost for the upcoming plan year is determined based on the
expected return on plan assets assumption and the market-related value of plan assets (MRVA). Since
our adoption of the accounting standard for pensions in 1987, we have determined the MRVA based
on a five-year moving average of plan assets. As of December 31, 2009, the MRVA is approximately
$3,700 greater than the fair market value of assets.
Assumed health care cost trend rates as of December 31, were as follows:
2009 2008
Health care cost trend rate assumed next year 7.00% 7.50%
Ultimate trend rate 5.00% 5.00%
Year that trend reached ultimate rate 2014 2014
Assumed health care cost trend rates have a significant effect on the amounts reported for the health
care plans. To determine the health care cost trend rates we look at a combination of information
including ongoing claims cost monitoring, annual statistical analyses of claims data, reconciliation of
forecast claims against actual claims, review of trend assumptions of other plan sponsors and national
health trends, and adjustments for plan design changes, workforce changes, and changes in plan
participant behavior. A one-percentage-point change in assumed health care cost trend rates would
have the following effect:
Increase Decrease
Effect on postretirement benefit obligation $617 $(541)
Effect on total of service and interest cost 57 (50)
Plan Assets
Investment Strategy The overall objective of our pension assets is to earn a rate of return over time to
satisfy the benefit obligations of the pension plans and to maintain sufficient liquidity to pay benefits
and address other cash requirements of the pension fund. Specific investment objectives for our long-
term investment strategy include reducing the volatility of pension assets relative to pension liabilities,
achieving a competitive, total investment return, achieving diversification between and within asset
classes and managing other risks. Investment objectives for each asset class are determined based on
specific risks and investment opportunities identified.
We update our long-term, strategic asset allocations every three-to-five years. We use various
analytics to determine the optimal asset mix and consider plan liability characteristics, liquidity
characteristics, funding requirements, expected rates of return and the distribution of returns. We
identify investment benchmarks for the asset classes in the strategic asset allocation that are market-
based and investable where possible.
Actual allocations to each asset class vary from target allocations due to periodic investment strategy
changes, market value fluctuations, the length of time it takes to fully implement investment allocation
positions (such as private equity and real estate), and the timing of benefit payments and contributions.
Short term investments and exchange-traded derivatives are used to rebalance the actual asset
allocation to the target asset allocation. The asset allocation is monitored and rebalanced on a monthly
basis.
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The actual allocations for the pension assets at December 31, 2009 and 2008, and target allocations
by asset class, are as follows:
Percentage of Plan Assets Target Allocations
Asset Class 2009 2008 2009 2008
Fixed income 50% 55% 45% 45%
Global equity 34 28 28 28
Real estate and real assets 4 4 10 10
Private equity 5 5 6 6
Global strategies 4 5 5 5
Hedge funds 3 3 6 6
Total 100% 100% 100% 100%
Fixed income securities are invested broadly and primarily in long duration instruments. Global equity
securities are invested broadly in U.S. and non-U.S. companies which are in various industries and
countries and through a range of market capitalizations.
Real estate and real assets include global private investments and publicly traded investments (such
as REITs in the case of real estate). Real estate includes but is not limited to investments in office,
retail, apartment and industrial properties. Real assets include but are not limited to investments in
natural resources (such as energy, farmland and timber) and infrastructure. Private equity investment
vehicles are primarily limited partnerships (LPs) and fund-of-funds that mainly invest in U.S. and
non-U.S. leveraged buyout, venture capital and special situation strategies.
Global strategies seek to capitalize on inefficiencies identified across different asset classes or
markets, primarily using long-short positions in derivatives and physical securities. Hedge fund strategy
types include, but are not limited to event driven, relative value, long-short and market neutral. A well-
diversified number of hedge funds are held.
Investment managers are retained for explicit investment roles specified by contractual investment
guidelines. Certain investment managers are authorized to invest in derivatives, such as equity or bond
futures, swaps, options and currency futures or forwards. Derivatives are used to achieve the desired
market exposure of a security or an index, transfer value-added performance between asset classes,
achieve the desired currency exposure, adjust portfolio duration or rebalance the total portfolio to the
target asset allocation.
As a percentage of total plan assets, derivative net notional amounts were 6.0% and 6.2% for fixed
income, including to-be-announced mortgage-backed securities and treasury forwards, and 0.0% and
7.9% for global equity and currency overlay at December 31, 2009 and 2008.
In November 2009, the Company elected to contribute $1,500 of our common stock to the pension
fund. An independent fiduciary was retained to manage and liquidate the stock over time at its
discretion. Plan assets included $1,581 and $0 of our common stock as of December 31, 2009 and
2008.
Risk Management In managing the plan assets, we review and manage risk associated with funded
status risk, interest rate risk, market risk, counterparty risk, liquidity risk and operational risk. Liability
management and asset class diversification are central to our risk management approach and are
integral to the overall investment strategy. Further, asset classes are constructed to achieve
diversification by investment strategy, by investment manager, by industry or sector and by holding.
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Investment manager guidelines for publicly traded assets are specified and are monitored regularly
through the custodian. Credit parameters for counterparties have been established for managers
permitted to trade over-the-counter derivatives.
Fair Value Measurements The following table presents our plan assets using the fair value hierarchy
as of December 31, 2009. The fair value hierarchy has three levels based on the reliability of the inputs
used to determine fair value. Level 1 refers to fair values determined based on quoted prices in active
markets for identical assets. Level 2 refers to fair values estimated using significant other observable
inputs, and Level 3 includes fair values estimated using significant non-observable inputs.
Total Level 1 Level 2 Level 3
Fixed income securities
Corporate $13,259 $13,254 $ 5
U.S. government and agencies 3,886 3,886
Mortgage backed and asset backed securities 916 893 23
Other 2,628 $ 19 2,609
Derivatives
Assets 33 33
Liabilities (93) (93)
Cash equivalents and other short-term investments 2,068 1,679 389
Currency overlay derivatives
Assets 107 107
Global equity securities
Common and preferred stock 11,394 11,325 69
Boeing company stock 1,581 1,581
Common/collective/pooled funds 2,574 89 2,485
Derivatives
Assets 9 9
Private equity 2,300 9 2,291
Real estate and real assets 1,784 442 5 1,337
Global strategies 1,676 484 1,192
Hedge funds 1,347 336 1,011
Total $45,365 $15,628 $25,070 $4,667
Cash $ 125
Receivables 641
Payables (321)
Total $45,810
Fixed income securities are primarily valued using a market approach with inputs that include broker
quotes, benchmark yields, base spreads and reported trades.
Cash equivalents and other short-term investments, which are used to pay benefits, are primarily held
in registered money market funds which are valued using a market approach based on the quoted
market prices of identical instruments. Other cash equivalent and short-term investments are valued
daily by the fund using a market approach with inputs that include quoted market prices for similar
instruments.
Common and preferred stock equity securities are primarily valued using a market approach based on
the quoted market prices of identical instruments. Common/collective/pooled funds are typically
common or collective trusts valued at their net asset values (NAVs) that are calculated by the
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investment manager or sponsor of the fund and have daily or monthly liquidity. Active currency
managers, through an overlay program, invest in a broad set of currency derivatives. Derivatives
leveled in the table above are over-the-counter and are primarily valued using an income approach
with inputs that include benchmark yields, swap curves, cash flow analysis, rating agency data and
interdealer broker rates. Exchange-traded derivative positions are reported in accordance with
changes in daily variation margin which is settled daily and therefore reflected in the payables and
receivables portion of the table.
Private equity LP valuations are reported by the fund manager and are based on the valuation of the
underlying investments, which include inputs such as cost, operating results, discounted future cash
flows and market based comparable data.
Real estate and real asset fund values are primarily reported by the fund manager and are based on
valuation of the underlying investments, which include inputs such as cost, discounted future cash
flows, independent appraisals and market based comparable data. Publically traded REITs are valued
using a market approach based on quoted market prices of identical instruments.
Global strategies are primarily limited liability company (LLC) or mutual fund structures. The LLCs are
primarily valued based on NAVs calculated by the fund and have monthly liquidity. Global strategies
mutual funds are valued using a market approach based on the quoted market prices of identical
instruments.
Hedge funds consist of fund-of-fund LLC or commingled fund structures. The LLCs are primarily valued
based on NAVs calculated by the fund and are not publicly available. Liquidity for the LLCs is monthly
and is subject to liquidity of the underlying funds. The commingled fund NAV is calculated by the
manager on a daily basis and has monthly liquidity.
Some of our assets, primarily our private equity, real estate and real assets, hedge funds and global
strategies, do not have readily determinable market values given the specific investment structures
involved and the nature of the underlying investments. For the December 31, 2009 plan asset
reporting, publicly traded asset pricing was used where possible. For assets without readily
determinable values, estimates were derived from investment manager discussions focusing on
underlying fundamentals and significant events. For those investments reported on a one-quarter
lagged basis (primarily LPs) we use net asset values, adjusted for subsequent cash flows and
significant events.
The following table presents a reconciliation of Level 3 assets held during the year ended
December 31, 2009.
January 1,
2009
Balance
Net
Realized and
Unrealized
Gains/
(Losses)
Net
Purchases,
Issuances and
Settlements
Net
Transfers
Into/(Out of)
Level 3
December 31,
2009 Balance
Fixed income securities
Corporate $ 9 $ (4) $ 5
Mortgage backed and asset
backed securities 49 $ 1 (32) $5 23
Private equity 2,020 142 129 2,291
Real estate and real assets 1,629 (505) 213 1,337
Hedge funds 885 126 1,011
Total $4,592 $(236) $306 $5 $4,667
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OPB Plan Assets The majority of OPB plan assets are invested in a balanced index fund which is
comprised of approximately 60% equities and 40% debt securities. The index fund is valued using a
market approach based on the quoted market price of an identical instrument (Level 1). The expected
rate of return on these assets does not have a material effect on the net periodic benefit cost.
Cash Flows
Contributions Required pension contributions under the Employee Retirement Income Security Act
(ERISA) as well as rules governing funding of our non-U.S. pension plans, are not expected to be
material in 2010. In 2010 required contributions to our pension plans are not expected to exceed $100.
We expect that if interest rates remain at their current levels, discount rates for ERISA determinations
will likely decline in future years because of retrospective averaging, and as a result, contributions in
future years are expected to increase. We expect to contribute approximately $14 to our OPB plans in
2010.
Estimated Future Benefit Payments The table below reflects the total pension benefits expected to
be paid from the plans or from our assets, including both our share of the benefit cost and the
participants share of the cost, which is funded by participant contributions. OPB payments reflect our
portion only.
Pensions
Other
Postretirement
Benefits
2010 $ 2,665 $ 527
2011 2,764 551
2012 2,872 562
2013 3,008 577
2014 3,130 592
2015 2019 17,843 3,188
Termination Provisions
Certain of the pension plans provide that, in the event there is a change in control of the Company
which is not approved by the Board of Directors and the plans are terminated within five years
thereafter, the assets in the plan first will be used to provide the level of retirement benefits required by
ERISA, and then any surplus will be used to fund a trust to continue present and future payments
under the postretirement medical and life insurance benefits in our group insurance benefit programs.
We have an agreement with the U.S. government with respect to certain pension plans. Under the
agreement, should we terminate any of the plans under conditions in which the plans assets exceed
that plans obligations, the U.S. government will be entitled to a fair allocation of any of the plans
assets based on plan contributions that were reimbursed under U.S. government contracts.
401(k) Plans
We provide certain defined contribution plans to all eligible employees. The principal plans are the
Company-sponsored 401(k) plans. The expense for these defined contribution plans was $591, $571
and $536 in 2009, 2008 and 2007, respectively.
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Note 15 Share-Based Compensation and Other Compensation Arrangements
Share-Based Compensation
Our 2003 Incentive Stock Plan, as amended on April 27, 2009, permits awards of incentive stock
options, nonqualified stock options, restricted stock, stock units, Performance Shares, performance
units and other incentives to our employees, officers, consultants and independent contractors. The
aggregate number of shares of our stock available for issuance under the amended plan will not
exceed 80,000,000 and no more than an aggregate of 16,000,000 shares are available for issuance as
restricted stock awards.
Shares issued as a result of stock option exercises or conversion of stock unit awards will be funded
out of treasury shares except to the extent there are insufficient treasury shares in which case new
shares will be issued. We believe we currently have adequate treasury shares to meet any
requirements to issue shares during 2010.
Share-based plans expense is primarily included in general and administrative expense since it is
incentive compensation issued primarily to our executives. The share-based plans expense and
related income tax benefit follow:
Stock options $111 $119 $ 79
Restricted stock units and other awards 55 25 36
ShareValue Trust 71 61 78
Performance Shares 1 4 94
Share-based plans expense $238 $209 $287
Income tax benefit $ 89 $ 79 $118
Stock Options
Options have been granted with an exercise price equal to the fair market value of our stock on the
date of grant and expire ten years after the date of grant. For stock options issued prior to 2006,
vesting is generally over a five-year service period with portions of a grant becoming exercisable at one
year, three years and five years after the date of grant. In the event an employee has a termination of
employment due to retirement, layoff, disability or death, the employee (or beneficiary) immediately
vests in grants that have been outstanding for at least one year.
On February 23, 2009, February 25, 2008, and February 26, 2007, we granted to our executives
7,423,242, 6,411,300, and 5,334,700 options, respectively, with an exercise price equal to the fair
market value of our stock on the date of grant. The stock options vest over a period of three years, with
34% vesting after the first year, 33% vesting after the second year and the remaining 33% vesting after
the third year. The options expire 10 years after the date of grant. If an executive terminates
employment for any reason, the non-vested portion of the stock option will not vest and all rights to the
non-vested portion will terminate completely.
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Stock option activity for the year ended December 31, 2009 is as follows:
(Shares in thousands) Shares
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Life (years)
Aggregate
Intrinsic
Value
(in millions)
Number of shares under option:
Outstanding at beginning of year 20,577 $73.42
Granted 7,546 35.71
Exercised (253) 40.84
Forfeited (857) 62.00
Expired (676) 48.81
Outstanding at end of year 26,337 $63.93 7.09 $179
Exercisable at end of year 13,940 $70.33 5.61 $ 47
The total intrinsic value of options exercised was $2, $22, and $192 during the years ended
December 31, 2009, 2008 and 2007, respectively. Cash received from options exercised for the years
ended December 31, 2009, 2008 and 2007 was $10, $44, and $209 with a related tax benefit of $1, $6,
and $65, respectively, derived from the compensation deductions resulting from these option
exercises. At December 31, 2009, there was $98 of total unrecognized compensation cost related to
the Stock Option plan which is expected to be recognized over a weighted average period of 1.6 years.
The total fair value of stock options vested during the years ended December 31, 2009, 2008 and 2007
was $114, $82, and $43, respectively.
The fair values of options were estimated using the Black-Scholes option-pricing model with the
following assumptions:
Grant
Year
Grant
Date
Expected
Life
Expected
Volatility
Dividend
Yield
Risk Free
Interest Rate
Weighted-Average
Grant Date Fair
Value
2009 2/23/09 6 years 39.0% 2.4% 2.03% $11.12
2008 2/25/08 6 years 28.8% 1.7% 3.20% 23.47
2007 2/26/07 6 years 28.4% 1.7% 4.62% 27.31
The expected volatility of the stock options is based on a combination of our historical stock volatility
and the volatility levels implied on the grant date by actively traded option contracts on our common
stock. We determined the expected term of the stock option grants to be 6 years, calculated using the
simplified method in accordance with the SEC Staff Accounting Bulletin 107, Valuation of Share-
Based Payment Arrangements for Public Companies. We used the simplified method since we
changed the vesting terms, tax treatment and the recipients of our stock options beginning in 2006
such that we believe our historical data no longer provides a reasonable basis upon which to estimate
expected term.
Restricted Stock Units and Other Awards
In 2009, we modified the components of our long-term incentive program while maintaining
substantially the same total award value as in prior years. Prior to the modification, Performance
Awards and options each comprised 50% of the total award value. Beginning in 2009, Performance
Awards still represent 50% of the value and stock options and restricted stock units (RSUs) each
represent 25% of the total value.
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On February 23, 2009, we granted to our executives 2,144,501 RSUs as part of our long-term
incentive program, with a fair value of $35.57 per share. The RSUs vest on the third anniversary of the
grant date. If an executive terminates employment because of retirement, involuntary layoff, disability,
or death, the employee (or beneficiary) will immediately vest on a proration of stock units based on
active employment during the three-year performance period. In all other cases, the RSUs will not vest
and all rights to the stock units will terminate completely.
In addition to RSUs awarded under our long-term incentive program, we grant restricted stock to
employees for various achievements, referred to as other stock award units. The fair values of all stock
units are estimated using the average stock price on the date of grant. Stock units settle in common
stock on a one-for-one basis and are not contingent upon stock price.
Stock unit activity for the year ended December 31, 2009 is as follows:
(Units in thousands)
Incentive Program
Restricted Stock Units
Other Stock Award
Units
Number of units:
Outstanding at beginning of year 239 1,601
Granted 2,344 329
Dividends 61 57
Forfeited (124) (22)
Distributed (134) (391)
Outstanding at end of year 2,386 1,574
Unrecognized compensation cost at December 31, 2009 $ 66 $ 40
Weighted average remaining contractual life (years) 2.1 3.0
ShareValue Trust
The ShareValue Trust, established effective July 1, 1996, is a 14-year irrevocable trust that holds our
common stock, receives dividends, and distributes to employees the appreciation in value above a
3% per annum threshold rate of return at the end of each period. The total compensation expense to
be recognized over the life of the trust was determined using a binomial option-pricing model.
The ShareValue Trust is accounted for as a contra-equity account and stated at market value. Market
value adjustments are offset to Additional paid-in capital. At December 31, 2009, there was $36 of total
unrecognized compensation cost related to the ShareValue Trust which is expected to be recognized
during the six months ending June 30, 2010.
The Trust was split between two funds, fund 1 and fund 2, upon its initial funding. Based on the
average stock price of $66.15 as of June 30, 2008, the market value of fund 2 exceeded the threshold
of $1,028 by $236. This excess was paid in Boeing common stock, except for partial shares and
distributions to non-U.S. employees and beneficiaries of deceased participants, which was paid in
cash.
At December 31, 2009 the Trust held 29,563,324 shares, of which 13,216,726 shares were included in
fund 1. If on June 30, 2010, the market value of fund 1 exceeds the appreciation threshold stock price,
the amount in excess of the threshold will be distributed to employees in shares of common stock. At
December 31, 2009 the threshold price was $85.46 per share. The Trust will terminate in 2010, and
any undistributed shares will be transferred to us upon termination.
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Performance Shares
Prior to 2006, Performance Shares were a significant component of our long-term incentive
compensation. Performance Shares are stock units that are convertible to common stock, on a
one-to-one basis, contingent upon stock price performance. If, at any time up to five years after award,
the stock price reaches and maintains for 20 consecutive days a price equal to stated price growth
targets, a stated percentage (up to 125%) of the Performance Shares awarded are vested and
convertible to common stock.
Performance Shares activity for the year ended December 31, 2009 is as follows:
(Shares in thousands) Shares
Number of Performance Shares:
Outstanding at beginning of year 747
Dividend 29
Forfeited (4)
Outstanding at end of year 772
Outstanding at end of year not contingent on future employment 439
The following table provides additional information regarding potentially convertible and converted or
deferred Performance Shares.
Grant
Date
Expiration
Date
Weighted Average
Grant Date Fair Value
Cumulative
Vested at
December 31,
Shares
Convertible at
December 31,
(Shares in thousands) 2009 2009 2008
2/28/2005 2/28/2010 $33.05 90% 772 747
Performance Shares granted in 2005 were measured on the date of grant using a Monte Carlo model.
For years ended December 31, 2009, 2008 and 2007, we recorded $0, $0 and $54, respectively, to
accelerate the amortization of compensation cost for those Performance Shares converted to common
stock or deferred as stock or cash at the employees election.
Additionally, certain Performance Shares that have a cash settlement, are re-measured each balance
sheet date using a Monte Carlo model and are recalculated as a liability. Liability awards vesting and
transferred into deferred compensation plans totaled $0, $0 and $48 for the years ended December 31,
2009, 2008 and 2007, respectively.
Other Compensation Arrangements
Performance Awards
Performance Awards are cash units that payout based on the achievement of long-term financial goals
at the end of a three-year period. Each unit has an initial value of $100 dollars. The amount payable at
the end of the three-year performance period may be anywhere from $0 to $200 dollars per unit,
depending on the Companys performance against plan for a three-year period. The Compensation
Committee has the discretion to pay these awards in cash, stock, or a combination of both after the
three-year performance period. Compensation expense, based on the estimated performance payout,
is recognized ratably over the performance period.
During 2009, 2008 and 2007, we granted Performance Awards to our executives with the payout
based on the achievement of financial goals for the three-year periods ending December 31, 2011,
2010 and 2009, respectively. The minimum payout amount is $0 and the maximum amount we could
be required to pay out for the 2009, 2008 and 2007 Performance Awards is $304, $289 and $47.
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During the first quarter of 2006, we granted Performance Awards to our executives with the payout
based on the achievement of financial goals for the three-year period ending December 31, 2008. The
payout for these awards of $137 occurred in the first quarter of 2009.
Deferred Compensation
The Company has a deferred compensation plan which permits executives to defer receipt of a portion
of their salary, bonus, and certain other incentive awards. Prior to May 1, 2006, employees who
participated in the deferred compensation plan could choose to defer in either an interest earning
account or a Boeing stock unit account. Effective May 1, 2006, participants can diversify deferred
compensation among 19 investment funds including the interest earning account and the Boeing stock
unit account.
Total expense/(income) related to deferred compensation was $158, ($223), and $51 in 2009, 2008,
and 2007, respectively. Additionally, for employees who elected to defer their compensation in stock
units prior to January 1, 2006, the Company matched 25% of the deferral with additional stock units.
Effective January 1, 2006, all matching contributions are settled in stock upon retirement. As of
December 31, 2009 and 2008, the deferred compensation liability which is being marked to market
was $1,143 and $1,074.
Note 16 Shareholders Equity
On October 29, 2007, the Board approved the repurchase of up to $7 billion of common stock (the
Program). Unless terminated earlier by a Board resolution, the Program will expire when we have used
all authorized funds for repurchase. At December 31, 2009, $3,610 in shares may still be purchased
under the Program.
As of December 31, 2009 and 2008, there were 1,200,000,000 common shared authorized. Twenty
million shares of authorized preferred stock remain unissued.
Changes in Share Balances
The following table shows changes in each class of shares:
Common
Stock
Treasury
Stock
ShareValue
Trust
Balance January 1, 2007 1,012,261,159 223,522,176 30,903,026
Issued (8,300,606)
Acquired 28,995,600 459,824
Balance December 31, 2007 1,012,261,159 244,217,170 31,362,850
Issued (629,111)
Acquired 42,073,885 658,582
Payout (3,560,663)
Issued (30,428,387)
Acquired 1,173,152 1,102,555
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Accumulated Other Comprehensive Loss
The components of Accumulated other comprehensive loss at December 31, were as follows:
2009 2008
Pension and postretirement adjustments $(12,154) $(13,421)
Unrealized (losses)/gains on derivative instruments, net of reclassification
adjustments 67 (101)
Unrealized (losses)/gains on certain investments, net of reclassification
adjustments (6) (67)
Foreign currency translation adjustments 216 64
Accumulated other comprehensive loss $(11,877) $(13,525)
Note 17 Derivative Financial Instruments
Cash FlowHedges
Our cash flow hedges include certain interest rate swaps, foreign currency forward contracts, foreign
currency option contracts and commodity purchase contracts. Interest rate swap contracts under which
we agree to pay fixed rates of interest are designated as cash flow hedges of variable-rate debt
obligations. We use foreign currency forward contracts and options to manage currency risk associated
with certain forecasted transactions, specifically forecasted sales and purchases made in foreign
currencies. Our foreign currency derivative contracts hedge forecasted transactions principally
occurring within five years in the future, with certain contracts hedging transactions up to 2021. We use
commodity derivatives, such as fixed-price purchase commitments, to hedge against potentially
unfavorable price changes for items used in production. These include commitments to purchase
electricity at fixed prices through 2015.
Fair Value Hedges
Interest rate swaps under which we agree to pay variable rates of interest are designated as fair value
hedges of fixed-rate debt. The net change in fair value of the derivatives and the hedged items is
reported in Boeing Capital Corporation interest expense. Ineffectiveness related to the interest rate
swaps was insignificant for the years ended December 31, 2009 and 2008.
Derivative Instruments Not Receiving Hedge Accounting Treatment
We also hold certain derivative instruments, primarily foreign currency forward contracts, for risk
management purposes but without electing any form of hedge accounting.
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Notional Amounts and Fair Values
The fair values of derivative instruments are recorded in the Consolidated Statements of Financial
Position. The notional amounts and fair values as of December 31, were as follows:
Notional
amounts
1
Other assets
Other
accrued liabilities
2009 2008 2009 2008 2009 2008
Derivatives designated as hedging
instruments
Foreign exchange contracts $2,353 $1,992 $ 233 $ 26 $ (22) $ (39)
Interest rate contracts 1,475 817 32 48 (18) (3)
Commodity contracts 189 147 (88) (75)
4,017 2,956 265 74 (128) (117)
Derivatives not receiving hedge accounting
treatment
Foreign exchange contracts 693 646 32 42 (99) (128)
Warrants 21 10
Total derivatives 4,710 3,623 297 126 (227) (245)
Netting arrangements (119) (64) 119 64
Net recorded balance $ 178 $ 62 $(108) $(181)
1
Notional amounts represent the gross contract/notional amount of the derivatives outstanding.
The effects of our cash flow hedges on Accumulated other comprehensive loss during the year ended
December 31, 2009 were as follows:
2009
Location gains/(losses)
are recognized
Effective portion recognized in other comprehensive income, net of
taxes
Foreign exchange contracts $180 Accumulated other
comprehensive loss
Commodity contracts (24) Accumulated other
comprehensive loss
For the year ended December 31, 2009, we reclassified a net loss of $16 (pre-tax) from Accumulated
other comprehensive loss to earnings. Based on our portfolio of cash flow hedges, we expect to
reclassify gains of $36 (pre-tax) during the next 12 months.
We have derivative instruments with credit-risk-related contingent features. For foreign exchange
contracts with original maturities of at least five years, our derivative counterparties could require
settlement if we default on our 5-year credit facility, expiring November 2012. For commodity contracts,
our counterparties could require collateral posted in an amount determined by our credit ratings. The
fair value of foreign exchange and commodity contracts that have credit-risk-related contingent
features that are in a liability position at December 31, 2009 is $88. At December 31, 2009, there were
no aggregate derivative positions requiring the posting of collateral.
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Note 18 Significant Group Concentrations of Risk
Credit Risk
Financial instruments involving potential credit risk are predominantly with commercial aircraft
customers and the U.S. government. Of the $11,962 in Gross Accounts receivable and Gross
Customer financing included in the Consolidated Statements of Financial Position as of December 31,
2009, $6,154 related to commercial aircraft customers ($462 of Accounts receivable and $5,692 of
Customer financing) and $3,119 related to the U.S. government. Of the $6,136 in Gross Customer
financing, $5,568 related to customers we believe have less than investment-grade credit. AirTran
Airways, American Airlines, Hawaiian Airlines and Continental Airlines were associated with 25%, 15%,
7% and 7%, respectively, of our financing portfolio. Financing for aircraft is collateralized by security in
the related asset. As of December 31, 2009, there was $10,409 of financing commitments related to
aircraft on order including options and proposed as part of sales campaigns described in Note 11, of
which $9,266 related to customers we believe have less than investment-grade credit.
Fixed-Price Development Programs
Fixed-price development work is inherently uncertain and subject to significant variability in estimates
of the cost and time required to complete the work. Significant BDS fixed-price development contracts
include AEW&C, International KC-767 Tankers and commercial and military satellites. Significant
Commercial Airplanes development programs include the 787 and 747-8. The operational and
technical complexities of these programs create financial risk, which could trigger termination
provisions, order cancellations or other financially significant exposure. Changes to cost and revenue
estimates could also result in lower margins or a material charge if the program has or is determined to
have a reach-forward loss.
Other Risk
As of December 31, 2009, approximately 37% of our total workforce was represented by collective
bargaining agreements and approximately 3% of our total workforce was represented by agreements
expiring during 2010.
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Note 19 Fair Value Measurements
The following tables present our assets and liabilities that are measured at fair value on a recurring
basis and are categorized using the fair value hierarchy. The fair value hierarchy has three levels
based on the reliability of the inputs used to determine fair value. Level 1 refers to fair values
determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values
estimated using significant other observable inputs and Level 3 includes fair values estimated using
significant non-observable inputs.
Fair Value Measurements at December 31, 2009
Assets
Money market funds $3,575 $3,575
Available-for-sale investments:
Debt:
Residential mortgage-backed
securities 107 $ 107
Other debt obligations 5 $5
Equity 27 27
Derivatives 178 178
Total assets $3,892 $3,602 $ 285 $5
Liabilities
Derivatives $ (108) $(108)
Total liabilities $ (108) $(108)
Fair Value Measurements at December 31, 2008
Assets
Money market funds $2,128 $2,128
Available-for-sale debt investments:
Residential mortgage-backed
securities 196 $ 196
Other debt obligations 156 151 $ 5
Derivatives 62 52 10
Total assets $2,542 $2,128 $ 399 $15
Liabilities
Derivatives $ (181) $(181)
Total liabilities $ (181) $(181)
Money market funds and equity securities are valued using a market approach based on the quoted
market prices of identical instruments. Residential mortgage-backed securities are valued using an
income approach based on prepayment speeds, yields, discount margin and collateral performance.
The other debt securities are primarily valued using a market approach based on benchmark yields,
reported trades and broker/dealer quotes.
Derivatives include foreign currency, commodity, interest rate contracts and warrants. Our foreign
currency forward contracts are valued using an income approach based on the present value of the
forward rate less the contract rate multiplied by the notional amount. Commodity derivatives are valued
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using an income approach based on the present value of the commodity index prices less the contract
rate multiplied by the notional amount. The fair value of our interest rate swaps is derived from a
discounted cash flow analysis based on the terms of the contract and the interest rate curve. The fair
value of warrants is based on a third-party options model and principal inputs of stock price, volatility
and time to expiry.
The following table presents our assets that are measured at fair value on a nonrecurring basis for the
years ended December 31:
2009 2008
Carrying
Value
Total
Losses
Carrying
Value
Total
Losses
Equipment under operating leases $164 $(57)
Assets held for sale or re-lease 35 (18)
Property, plant and equipment 13 (13)
Receivables 1 (6) $8 $(8)
Total $213 $(94) $8 $(8)
Fair Value Disclosures
The following table presents our assets and liabilities that are not measured at fair value on a recurring
basis. The carrying values and estimated fair values were as follows at December 31:
2009 2008
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Assets
Accounts receivable, net $ 5,785 $ 5,658 $ 5,602 $ 5,443
Notes receivable 1,045 1,072 950 954
Liabilities
Debt, excluding capital lease obligations (12,848) (13,809) (7,441) (7,923)
Accounts payable (7,096) (7,063) (5,871) (5,871)
Residual value and credit guarantees (35) (20) (208) (52)
Contingent repurchase commitments (7) (63) (7) (38)
The fair values of the Accounts receivable and Accounts payable are based on current market rates for
loans of the same risk and maturities. The fair values of our variable rate notes receivable that reprice
frequently approximate their carrying values. The fair values of fixed rate notes receivable are
estimated using discounted cash flow analysis using interest rates currently offered on loans with
similar terms to borrowers of similar credit quality. The fair value of our debt is based on current market
yields for our debt traded in the secondary market. The fair values of the residual value guarantees and
contingent repurchase commitments are determined using a Black Futures Options formula and
includes such assumptions as the expected value of the aircraft on the settlement date, volatility of
aircraft prices, time until settlement and the risk free discount rate. The fair value of the credit
guarantees is estimated based on the expected cash flows of those commitments, given the creditors
probability of default, and discounted using the risk free rate. With regard to financial instruments with
off-balance sheet risk, it is not practicable to estimate the fair value of future financing commitments
because the amount and timing of funding those commitments are uncertain.
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Note 20 Legal Proceedings
Various legal proceedings, claims and investigations related to products, contracts and other matters
are pending against us. Potentially material contingencies are discussed below.
We are subject to various U.S. government investigations, from which civil, criminal or administrative
proceedings could result or have resulted. Such proceedings involve, or could involve claims by the
government for fines, penalties, compensatory and treble damages, restitution and/or forfeitures.
Under government regulations, a company, or one or more of its operating divisions or subdivisions,
can also be suspended or debarred from government contracts, or lose its export privileges, based on
the results of investigations. We believe, based upon current information, that the outcome of any such
government disputes and investigations will not have a material adverse effect on our financial
position, results of operations, or cash flows, except as set forth below.
A-12 Litigation
In 1991, the U.S. Navy notified McDonnell Douglas Corporation (now merged into The Boeing
Company) and General Dynamics Corporation (together, the Team) that it was terminating for default
the Teams contract for development and initial production of the A-12 aircraft. The Team had full
responsibility for performance of the contract and both contractors are jointly and severally liable for
any potential liabilities resulting from the termination. The Team filed a legal action to contest the
Navys default termination, to assert its rights to convert the termination to one for the convenience of
the government, and to obtain payment for work done and costs incurred on the A-12 contract but not
paid to date. As of December 31, 2009, inventories included approximately $585 of recorded costs on
the A-12 contract, against which we have established a loss provision of $350. The amount of the
provision, which was established in 1990, was based on McDonnell Douglas Corporations belief,
supported by an opinion of outside counsel, that the termination for default would be converted to a
termination for convenience, and that the best estimate of possible loss on termination for convenience
was $350.
On August 31, 2001, the U.S. Court of Federal Claims issued a decision after trial upholding the
governments default termination of the A-12 contract. In 2003, the Court of Appeals for the Federal
Circuit, finding that the trial court had applied the wrong legal standard, vacated the trial courts 2001
decision and ordered the case sent back to that court for further proceedings. On May 3, 2007, the
U.S. Court of Federal Claims issued a decision upholding the governments default termination of the
A-12 contract. We filed a Notice of Appeal on May 4, 2007 with the Court of Appeals for the Federal
Circuit. On June 2, 2009, the Court of Appeals rendered an opinion affirming the trial courts 2007
decision sustaining the governments default termination. On August 14, 2009, we filed a Combined
Petition for Panel Rehearing and for Rehearing En Banc in the Court of Appeals for the Federal Circuit.
On November 24, 2009, the Court denied our Combined Petition. We believe that the ruling of the
Court of Appeals upholding the default termination is erroneous and in conflict with the governing law,
and we intend to file a Petition for Writ of Certiorari to the United States Supreme Court on or before
March 24, 2010. On December 29, 2009, the Department of the Navy sent letters to the Team
requesting payment of $1,352 in unliquidated progress payments, plus applicable interest. We believe
that the U.S. government is not entitled to repayment of any progress payments at this time and have
advised the Department of the Navy of our position.
We believe that the termination for default is contrary to law and fact and that the loss provision
established by McDonnell Douglas Corporation in 1990, which was supported by an opinion from
outside counsel, continues to provide adequately for the reasonably possible reduction in value of A-12
net contracts in process as of December 31, 2009. Final resolution of the A-12 litigation will depend on
the outcome of further proceedings or possible negotiations with the U.S. government. We expect the
United States Supreme Court to decide whether or not to review the Court of Appeals decision in
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2010, and if it decides to review the case, to issue a decision in 2010 or 2011. If the United States
Supreme Court declines review of the Court of Appeals decision, or if it reviews the decision and
determines, contrary to our belief, that a termination for default was appropriate, we could incur an
additional loss of up to $275, consisting principally of $235 of remaining inventory costs. If the courts
further hold that a money judgment should be entered against the Team, we could be required to pay
the U.S. government up to one-half of the unliquidated progress payments of $1,350 plus statutory
interest from February 1991 (currently totaling up to $1,485). In that event, our loss would total
approximately $1,690 in pre-tax charges. Should, however, the March 31, 1998 judgment of the U.S.
Court of Federal Claims in favor of the Team be reinstated, we could be entitled to receive payment of
approximately $1,144, including interest from June 26, 1991.
Employment and Benefits Litigation
On March 2, 2006, we were served with a complaint filed in the U.S. District Court for the District of
Kansas, alleging that hiring decisions made by Spirit AeroSystems, Inc. (Spirit) near the time of our
sale of the Wichita facility were tainted by age discrimination, violated Employee Retirement Income
Security Act (ERISA), violated our collective bargaining agreements, and constituted retaliation. The
case is brought as a class action on behalf of individuals not hired by Spirit. While we believe that Spirit
has an obligation to indemnify Boeing for claims relating to the 2005 sales transaction, Spirit has
refused to indemnify Boeing for all claims arising from employment activity prior to January 1, 2005. On
June 4, 2008, claims by individuals who filed consents to join the Age Discrimination Employment Act
collective action and were terminated by Boeing prior to January 1, 2005 were dismissed by stipulated
order. On June 15, 2009, plaintiffs filed a motion seeking class certification for certain former Boeing
employees at the Wichita, Tulsa and McAlester facilities over the age of 40 who were laid off between
January 1, 2005 and July 1, 2005, and were not hired by Spirit on June 17, 2005. On July 31, 2009,
Boeing filed motions opposing class certification and seeking dismissal of the ERISA and breach of
contract claims. On August 14, 2009, Boeing filed a motion seeking dismissal, or in the alternative,
decertification of the age claims. Plaintiffs reply brief on certification of ERISA 510 and Labor-
Management Relations Act (LMRA) 301 classes was filed on August 28, 2009. Plaintiffs response to
Defendants motion for summary judgment on Plaintiffs ERISA 510 and LMRA 301 claims was filed
on September 11, 2009. These motions are fully briefed and are pending before the court.
A second alleged class action involving our sale of the Wichita facility to Spirit was filed on
February 21, 2007, in the U.S. District Court for the District of Kansas. The case is also brought under
ERISA, and, in general, claims that we have not properly provided benefits to certain categories of
former employees affected by the sale. On May 22, 2008, plaintiffs filed a third amended complaint and
on June 3, 2008, filed a motion to certify a class. On July 14, 2008, the court granted class certification
for the purpose of adjudicating liability for the class of employees who went to work for Spirit, and
deferred class certification motions for the class of employees who did not go to work for Spirit. A
Memorandum and Order on November 3, 2009 resolves discovery disputes and discovery continues
for both groups of employees.
On September 13, 2006, two UAW Local 1069 retirees filed a class action lawsuit in the U.S. District
Court for the Middle District of Tennessee alleging that recently announced changes to medical plans
for retirees of UAW Local 1069 constituted a breach of collective bargaining agreements under 301 of
the LMRA and 502(a)(1)(B) of ERISA. On September 15, 2006, we filed a lawsuit in the U.S. District
Court for the Northern District of Illinois against the International UAW and two retiree medical plan
participants seeking a declaratory judgment confirming that we have the legal right to make changes to
these medical benefits. On June 4, 2007, the Middle District of Tennessee ordered that its case be
transferred to the Northern District of Illinois. The two cases were consolidated on September 24,
2007. On January 17, 2008, the court granted the UAWs motion to amend the complaint to drop the
retirees claim for vested lifetime benefits based on successive collective bargaining agreements and
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instead allege that the current collective bargaining agreement is the sole alleged source of rights to
retiree medical benefits. Both parties filed Motions for Class Certification on November 16, 2007 and
filed briefs on class certification on February 28, 2008. The parties filed cross-motions for summary
judgment on May 27, 2008. On September 30, 2008, the court certified a class of retirees for all claims.
On September 9, 2009, the court granted Boeings motion and ruled that the retiree medical benefits
were not vested lifetime benefits and that the 2006 changes to benefits did not violate the 2005
collective bargaining agreement. On October 8, 2009, the plaintiffs filed a notice of appeal to the
Seventh Circuit Court of Appeals.
On October 13, 2006, we were named as a defendant in a lawsuit filed in the U.S. District Court for the
Southern District of Illinois. Plaintiffs, seeking to represent a class of similarly situated participants and
beneficiaries in the Boeing Company Voluntary Investment Plan (the VIP Plan), alleged that fees and
expenses incurred by the VIP Plan were and are unreasonable and excessive, not incurred solely for
the benefit of the VIP Plan and its participants, and were undisclosed to participants. The plaintiffs
further alleged that defendants breached their fiduciary duties in violation of 502(a)(2) of ERISA, and
sought injunctive and equitable relief pursuant to 502(a)(3) of ERISA. Plaintiffs filed a motion to certify
the class, which we opposed. On December 14, 2007, the court granted plaintiffs leave to file an
amended complaint, which complaint added our Employee Benefits Investment Committee as a
defendant and included new allegations regarding alleged breach of fiduciary duty. The stay of
proceedings entered by the court on September 10, 2007, pending resolution by the U.S. Court of
Appeals for the Seventh Circuit of Lively v. Dynegy, Inc., was lifted on April 3, 2008, after notification
that the Lively case had settled. On April 16, 2008, plaintiffs sought leave to file a second amended
complaint, which we opposed, which would add investment performance allegations. On August 22,
2008, the court granted plaintiffs leave to file their second amended complaint. On September 29,
2008, the court granted plaintiffs motion to certify the class of current, past and future participants or
beneficiaries in the VIP Plan. On September 9, 2008, we filed a motion for summary judgment to
dismiss claims arising prior to September 27, 2000 based on the ERISA statute of limitations. On
October 14, 2008, we filed a petition for leave to appeal the class certification order to the Seventh
Circuit Court of Appeals. On January 15, 2009, we filed a motion seeking dismissal of all claims as a
matter of law. On August 10, 2009, the Seventh Circuit Court of Appeals granted Boeings motion for
leave to appeal the class certification order. The district court entered a stay of proceedings in the trial
court pending resolution of the class certification appeal. On December 29, 2009, the district court lifted
on plaintiffs motion the stay of proceedings previously entered. Boeing responded by filing an
Application for Stay Pending Appeal with the Seventh Circuit Court of Appeals on January 7, 2010.
BSSI/ICO Litigation
On August 16, 2004, our wholly-owned subsidiary, Boeing Satellite Systems International, Inc. (BSSI)
filed a complaint for declaratory relief against ICO Global Communications (Operations), Ltd. (ICO)
in Los Angeles County Superior Court seeking a declaration that ICOs prior termination of two
contracts for convenience extinguished all claims between the parties. On September 16, 2004, ICO
filed a cross-complaint alleging breach of contract, economic duress, fraud, unfair competition, and
other claims. ICO added The Boeing Company as a defendant in October 2005 to some of these
claims and also sued it for interference with contract and misappropriation of trade secrets. On
January 13, 2006, BSSI filed a cross-complaint against ICO, ICO Global Communications (Holdings)
Limited (ICO Holdings), ICOs parent, and Eagle River Investments, LLC, parent of both ICO and ICO
Holdings, alleging fraud and other claims. The trial commenced on June 19, 2008, with ICO seeking to
recover approximately $2,000 in damages, including all monies paid to BSSI and Boeing Launch
Services, plus punitive damages and other unspecified damages and relief.
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On October 21, 2008, the jury returned a verdict awarding ICO compensatory damages of $371 plus
interest, based upon findings of contract breach, fraud and interference with contract. On October 31,
2008, the jury awarded ICO punitive damages of $236. On January 2, 2009, the court entered
judgment for ICO in the amount of $631 which included $24 in prejudgment interest.
On February 26, 2009 the trial court granted in part and denied in part post-trial motions we filed
seeking to set aside the verdict. As a result, on March 3, 2009, the court entered an amended
judgment for ICO in the amount of $604, which included $371 in compensatory damages, $207 in
punitive damages and $26 in prejudgment interest. Post-judgment interest will accrue on the judgment
at the rate of 10% per year (simple interest) from January 2, 2009. We filed a notice of appeal and ICO
filed a notice of cross-appeal in March 2009. Our opening brief for the appeal was filed on October 27,
2009. No date has been set for argument. We believe that we have substantial arguments on appeal,
which we intend to pursue vigorously.
BSSI/Telesat Canada
On November 9, 2006, Telesat Canada (Telesat) and a group of its insurers served BSSI with an
arbitration demand alleging breach of contract, gross negligence and willful misconduct in connection
with the constructive total loss of Anik F1, a model 702 satellite manufactured by BSSI. Telesat and its
insurers initially sought over $385 in damages and $10 in lost profits, but recently revised their demand
to $263. BSSI has asserted a counterclaim against Telesat for $6 in unpaid performance incentive
payments and also a $180 contingent counterclaim on the theory that any ultimate award to reimburse
the insurers for their payments to Telesat could only result from Telesats breach of its contractual
obligation to obtain a full waiver of subrogation rights barring recourse against BSSI. We believe that
the claims asserted by Telesat and its insurers lack merit, but we have notified our insurance carriers
of the demand. The arbitration has been stayed pending an application by Telesat to the Ontario
Superior Court on a preliminary issue. The arbitration hearing date has been vacated.
On April 26, 2007, a group of our insurers filed a declaratory judgment action in the Circuit Court of
Cook County asserting certain defenses to coverage and requesting a declaration of their obligation
under our insurance and reinsurance policies relating to the Telesat Anik F1 arbitration. On June 12,
2008, the court granted the insurers motion for summary judgment, concluding that our insurance
policy excluded the kinds of losses alleged by Telesat. On January 16, 2009, the court granted
Boeings motion for reconsideration, ruling in favor of Boeing to require the insurers to provide
insurance coverage to defend the claim.
Civil Securities Litigation
Plaintiff shareholders have filed a putative securities fraud class action against The Boeing Company
and two of our senior executives. This lawsuit arises from our June 2009 announcement that the first
flight of the 787 Dreamliner would be postponed due to a need to reinforce an area within the
side-of-body section of the aircraft. Plaintiffs contend that we were aware before June 2009 that the
first flight could not take place as scheduled due to issues with the side-of-body section of the aircraft,
and that our determination not to announce this delay earlier resulted in an artificial inflation of our
stock price for a multi-week period in May and June 2009. Plaintiffs complaint was filed in November
2009. No briefing or discovery has yet taken place. We believe the allegations are without merit and
intend to contest the case vigorously.
In addition, plaintiff shareholders have filed three similar shareholder derivative lawsuits concerning the
flight schedule for the 787 Dreamliner that closely tracks the allegations in the putative class action
lawsuit. No briefing or discovery has yet taken place. We believe the allegations are without merit and
intend to contest the case vigorously.
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Note 21 Segment Information
We operate in five principal segments: Commercial Airplanes; Boeing Military Aircraft, Network &
Space Systems, and Global Services & Support, collectively BDS; and BCC. All other activities fall
within the Other segment, principally made up of Engineering, Operations & Technology and our
Shared Services Group. See page 45 for Summary of Business Segment Data, which is an integral
part of this note.
Our Commercial Airplanes operation principally involves development, production and marketing of
commercial jet aircraft and providing related support services, principally to the commercial airline
industry worldwide.
BDS combines weapons and aircraft capabilities, intelligence and security systems, communications
architectures and extensive large-scale integration expertise. Our BDS operations principally involve
research, development, production, modification and support of the following products and related
systems: global strike systems, including fighters, bombers, weapons and unmanned systems, global
mobility systems, including transport and tanker aircraft, rotorcraft systems, including transport, combat
and tilt-rotor aircraft, airborne surveillance and reconnaissance aircraft, including command and
control, battle management, and airborne anti-submarine aircraft, network and tactical systems,
including information and battle management systems, intelligence and security systems, missile
defense systems, space and intelligence systems, including satellites and commercial satellite
launching vehicles, and space exploration. BDS support and services deliver a full continuum of
innovative products and services that help customers use the systems needed to execute their
missions while reducing life-cycle costs. Although some BDS products are contracted in the
commercial environment, the primary customer is the U.S. government.
Our Boeing Military Aircraft segment programs include AH-64 Apache, Airborne Early Warning and
Control, CH-47 Chinook, C-17 Globemaster, EA-18G Growler Airborne Attack Electronic Aircraft, F/
A-18E/F Super Hornet, F-15 Strike Eagle, F-22 Raptor, Harpoon, International KC-767 Tanker, Joint
Direct Attack Munition, P-8A Poseidon, Small Diameter Bomb, T-45 TS Goshawk and V-22 Osprey.
Our Network & Space Systems segment programs include Airborne Laser, Family of Advanced
Beyond Line-of-Sight Terminals, Brigade Combat Team Modernization (formerly Future Combat
Systems), Future Rapid Effects System, Global Positioning System, Ground-based Midcourse Defense
(GMD), International Space Station, Joint Tactical Radio System, Satellite Systems, SBInet, Space
Payloads and Space Shuttle.
Our Global Services & Support segment programs include Integrated Logistics on platforms including
AH-64, AV-8B, C-17, CH-47, F-15, F/A-18, F-22, GMD, 767 Tanker and V-22; Maintenance,
Modifications and Upgrades on platforms including A-10, B-1, B-52, C-32, C-40, C-130, E-4B, E-6,
KC-10, KC-135, T-38 and VC-25; Training Systems and Services on platforms including AH-64, C-17,
F-15, F-16, F/A-18 and T-45; and International Support and Advanced Global Services and Support.
Our BCC segment is primarily engaged in supporting our major operating units by facilitating,
arranging, structuring and providing selective financing solutions to our customers and managing our
overall financial exposures.
Engineering, Operations & Technology is an advanced research and development organization
focused on innovative technologies, improved processes and the creation of new products. Financing
activities other than BCC, consisting principally of intercompany guarantees we provide to BCC, are
included within the Other segment classification.
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Effective January 1, 2009, 2008 and 2007 certain programs were realigned among BDS segments. In
addition, effective January 1, 2008, certain environmental remediation contracts (formerly included in
Network & Space Systems) were transferred to the Other Segment. Certain intercompany items were
also realigned between the Other Segment and Unallocated items and eliminations in 2008. Business
segment data for all periods presented have been adjusted to reflect the realignment.
While our principal operations are in the United States, Canada and Australia, some key suppliers and
subcontractors are located in Europe and Japan. Revenues by geographic area consisted of the
following:
Asia, other than China $ 7,536 $ 7,913 $11,104
China 4,888 2,404 2,853
Europe 7,516 5,992 6,296
Middle East 5,338 2,568 1,891
Oceania 1,447 989 1,057
Africa 602 406 751
Canada 493 1,849 1,653
Latin America, Caribbean and other 963 1,656 1,446
28,783 23,777 27,051
United States 39,498 37,132 39,336
Total revenues $68,281 $60,909 $66,387
Commercial Airplanes segment revenues were approximately 86%, 70% and 79% of total revenues in
Europe and approximately 70%, 75% and 87% of total revenues in Asia, excluding China, for 2009,
2008 and 2007, respectively. BDS revenues were approximately 12%, 20% and 16% of total revenues
in Europe and approximately 29%, 24% and 12% of total revenues in Asia, excluding China, for 2009,
2008 and 2007, respectively. BDS revenues from the U.S. government represented 43%, 46% and
42% of consolidated revenues for 2009, 2008 and 2007, respectively. Approximately 5% and 4% of
operating assets were located outside the United States as of December 31, 2009 and 2008.
The information in the following tables is derived directly from the segments internal financial reporting
used for corporate management purposes.
Research and Development Expense*
Boeing Military Aircraft 541 479 445
Network & Space Systems 397 298 289
Total Boeing Defense, Space & Security 1,101 933 848
Other segment 22 (3) 40
Total research and development expense, net $6,506 $3,768 $3,850
* Research and development expense includes bid and proposal costs of $343, $330, and $306,
respectively.
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Depreciation and Amortization
Commercial Airplanes $ 495 $ 379 $ 318
Total Boeing Defense, Space & Security 383 327 362
Unallocated items and eliminations 389 522 551
$1,678 $1,502 $1,485
We recorded earnings from operations associated with our cost and equity method investments of $74,
$47, and $100 in our Commercial Airplanes segment and $175, $194, and $87 primarily in our N&SS
segment for the years ended December 31, 2009, 2008 and 2007, respectively.
For segment reporting purposes, we record Commercial Airplanes segment revenues and cost of sales
for airplanes transferred to other segments. Such transfers may include airplanes accounted for as
operating leases and considered transferred to the BCC segment and airplanes transferred to the BDS
segment for further modification prior to delivery to the customer. The revenues and cost of sales for
these transfers are eliminated in the Unallocated items and eliminations caption. For segment reporting
purposes, we record BDS revenues and cost of sales for the modification performed on airplanes
received from Commercial Airplanes when the airplane is delivered to the customer or at the
attainment of performance milestones.
Intersegment revenues, eliminated in Unallocated items and eliminations are shown in the following
table.
Commercial Airplanes $740 $1,193 $390
Other segment 2
Total $820 $1,270 $495
Unallocated Items and Eliminations
Unallocated items and eliminations includes costs not attributable to business segments as well as
intercompany profit eliminations. This includes Unallocated pension and other postretirement expense
which represents the difference between costs recognized under Generally Accepted Accounting
Principles in the United States of America (GAAP) in the consolidated financial statements and federal
cost accounting standards required to be utilized by our business segments for U.S. government
contracting purposes.
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The most significant items not allocated to segments are shown in the following table.
Share-based plans $(189) $(149) $ (233)
Deferred compensation expense/(income) (158) 223 (51)
Pension 110 (208) (561)
Postretirement (93) (79) (125)
Capitalized interest (53) (44) (53)
Other unallocated items and eliminations (211) (66) (74)
Total $(594) $(323) $(1,097)
Unallocated assets primarily consist of cash and investments, prepaid pension expense, net deferred
tax assets, capitalized interest and assets held by our Shared Services Group as well as intercompany
eliminations. Unallocated liabilities include various accrued employee compensation and benefit
liabilities, including accrued retiree health care, net deferred tax liabilities and income taxes payable.
Debentures and notes payable are not allocated to other business segments except for the portion
related to BCC. Unallocated capital expenditures relate primarily to Shared Services Group assets and
segment assets managed by Shared Services Group, primarily BDS.
Segment assets, liabilities and capital expenditures are summarized in the tables below.
Assets
As of December 31, 2009 2008 2007
Boeing Capital Corporation 6,178 6,073 6,581
Other segment 707 1,207 1,735
Unallocated items and eliminations 17,348 11,124 23,083
$62,053 $53,779 $58,986
Liabilities
As of December 31, 2009 2008 2007
Boeing Capital Corporation 4,538 4,115 4,763
Unallocated items and eliminations 29,228 26,554 21,461
$59,828 $54,921 $49,908
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Capital Expenditures
Commercial Airplanes $ 420 $ 708 $ 849
Total Boeing Defense, Space & Security 267 267 221
Unallocated items and eliminations 386 687 656
$1,186 $1,674 $1,731
Note 22 Quarterly Financial Data (Unaudited)
2009 2008
4th 3rd 2nd 1st 4th 3rd 2nd 1st
Total revenues $ 17,937 $ 16,688 $ 17,154 $ 16,502 $ 12,664 $ 15,293 $16,962 $15,990
Total costs and expenses (14,508) (14,480) (13,807) (13,745) (11,264) (12,541) (13,942) (12,605)
Earnings/(loss) from operations 1,693 (2,151) 1,529 1,025 (243) 1,147 1,247 1,799
Net earnings/(loss) from
continuing operations 1,283 (1,560) 997 615 (86) 683 851 1,206
Net gain/(loss) from
discontinued operations (15) (4) 1 (5) 12 1 5
Net earnings/(loss) 1,268 (1,564) 998 610 (86) 695 852 1,211
Basic earnings/(loss) per share
from continuing operations 1.79 (2.22) 1.42 0.88 (0.12) 0.95 1.18 1.63
Basic earnings/(loss) per share 1.77 (2.23) 1.42 0.87 (0.12) 0.97 1.18 1.64
Diluted earnings/(loss) per share
from continuing operations 1.77 (2.22) 1.41 0.87 (0.12) 0.94 1.16 1.61
Diluted earnings/(loss) per share 1.75 (2.23) 1.41 0.86 (0.12) 0.96 1.16 1.62
Cash dividends paid per share 0.42 0.42 0.42 0.42 0.40 0.40 0.40 0.40
Market price:
High 56.56 55.48 53.39 47.00 58.00 69.50 88.29 87.84
Low 47.18 38.92 34.21 29.05 36.17 54.20 65.55 71.59
Quarter end 54.13 54.15 42.50 35.58 42.67 57.35 65.72 74.37
During the first and third quarters of 2009, we recorded pre-tax charges of $347 and $1,005 on our 747
program in our Commercial Airplanes segment. During the third quarter of 2009, we recorded $2,619
of research and development costs relating to the first three 787 flight test aircraft in our Commercial
Airplanes segment. During the fourth quarter of 2009, we recorded pre-tax charges of $133 on our
international AEW&C program in our Boeing Military Aircraft segment.
During the second quarter of 2008, we recorded a pre-tax charge of $248 on our international AEW&C
program in our Boeing Military Aircraft segment. During the fourth quarter of 2008, we recorded a
pre-tax charge of $685 on our 747 program in our Commercial Airplanes segment. During the third and
fourth quarters of 2008, the IAM strike reduced revenue by approximately $6.4 billion.
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NLRB-FOIA-00005913
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
The Boeing Company
Chicago, Illinois
We have audited the accompanying consolidated statements of financial position of The Boeing
Company and subsidiaries (the Company) as of December 31, 2009 and 2008, and the related
consolidated statements of operations, shareholders equity, and cash flows for each of the three years
in the period ended December 31, 2009. Our audits also included the financial statement schedule
listed in the Index at Item 15(a) 2. The financial statements and financial statement schedule are the
responsibility of the Companys management. Our responsibility is to express an opinion on the
financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the
financial position of The Boeing Company and subsidiaries as of December 31, 2009 and 2008, and
the results of their operations and their cash flows for each of the three years in the period ended
December 31, 2009, in conformity with accounting principles generally accepted in the United States of
America. Also, in our opinion, such financial statement schedule, when considered in relation to the
basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the
information set forth therein.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States), the Companys internal control over financial reporting as of December 31,
2009, based on the criteria established in Internal Control Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission and our report dated
February 8, 2010 expressed an unqualified opinion on the Companys internal control over financial
reporting.
Chicago, Illinois
February 8, 2010
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NLRB-FOIA-00005914
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
The Boeing Company
Chicago, Illinois
We have audited the internal control over financial reporting of The Boeing Company and subsidiaries
(the Company) as of December 31, 2009, based on criteria established in Internal Control
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission. The Companys management is responsible for maintaining effective internal control over
financial reporting and for its assessment of the effectiveness of internal control over financial
reporting, included in the accompanying Managements Report on Internal Control Over Financial
Reporting. Our responsibility is to express an opinion on the Companys internal control over financial
reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control over financial reporting was maintained
in all material respects. Our audit included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk, and performing such other
procedures as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.
A companys internal control over financial reporting is a process designed by, or under the supervision
of, the companys principal executive and principal financial officers, or persons performing similar
functions, and effected by the companys board of directors, management, and other personnel to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting
principles. A companys internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use, or disposition of the companys assets that could have a material effect on the financial
statements.
Because of the inherent limitations of internal control over financial reporting, including the possibility of
collusion or improper management override of controls, material misstatements due to error or fraud
may not be prevented or detected on a timely basis. Also, projections of any evaluation of the
effectiveness of the internal control over financial reporting to future periods are subject to the risk that
the controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
In our opinion, the Company maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2009, based on the criteria established in Internal Control Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States), the consolidated financial statements and financial statement schedule as of
and for the year ended December 31, 2009 of the Company and our report dated February 8, 2010
expressed an unqualified opinion on those financial statements and financial statement schedule.
Chicago, Illinois
February 8, 2010
114
NLRB-FOIA-00005915
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
None.
Item 9A. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures.
Our Chief Executive Officer and Chief Financial Officer have evaluated our disclosure controls and
procedures as of December 31, 2009 and have concluded that these disclosure controls and
procedures are effective to ensure that information required to be disclosed by us in the reports that we
file or submit under the Act is recorded, processed, summarized and reported within the time periods
specified in the Commissions rules and forms and is accumulated and communicated to our
management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow
timely decisions regarding required disclosure.
(b) Managements Report on Internal Control Over Financial Reporting.
Our management is responsible for establishing and maintaining adequate internal control over
financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Our management
conducted an evaluation of the effectiveness of our internal control over financial reporting based on
the framework in Internal Control Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on this evaluation under the framework in Internal
Control Integrated Framework, our management concluded that our internal control over financial
reporting was effective as of December 31, 2009.
Our internal control over financial reporting as of December 31, 2009, has been audited by Deloitte &
Touche LLP, an independent registered public accounting firm, as stated in their report which is
included in Item 8 of this report and is incorporated by reference herein.
(c) Changes in Internal Controls Over Financial Reporting.
There were no changes in our internal control over financial reporting that occurred during the fourth
quarter of 2009 that have materially affected or are reasonably likely to materially affect our internal
control over financial reporting.
Item 9B. Other Information
None
115
NLRB-FOIA-00005916
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Our executive officers as of February 1, 2010, are as follows:
Name Age Principal Occupation or Employment/Other Business Affiliations
James F. Albaugh 59 Executive Vice President since July 2002 and President and Chief
Executive Officer of BCA since September 2009. Prior thereto,
President and CEO of BDS from July 2002 to August 2009. Prior
thereto, Senior Vice President of Boeing and President of Space and
Communications Group since September 1998 (named CEO of
Space and Communications Group in March 2001). Prior thereto,
President, Boeing Space Transportation since April 1998 and
President of Rocketdyne Propulsion and Power since March 1997.
Mr. Albaugh serves on the board of TRW Automotive Holdings, Inc.
James A. Bell 61 Executive Vice President and Chief Financial Officer since January
2004 and Corporate President since June 2008. Prior thereto, Senior
Vice President of Finance and Corporate Controller from October
2000 to January 2004. Prior thereto, Vice President of Contracts and
Pricing for Boeing Space Communications from January 1997 to
October 2000. Mr. Bell serves on the boards of The Dow Chemical
Company and Boeing Capital Corporation.
Wanda K. Denson-Low 53 Senior Vice President, Office of Internal Governance since May
2007. Prior thereto, Vice President and Assistant General Counsel of
BDS from August 2003 to May 2007. Prior thereto, Vice President of
Human Resources for BDS from March 2002 to August 2003. Ms.
Denson-Low joined Boeing when the Company acquired Hughes
Space and Communications in 2000, when she held the position of
Vice President, General Counsel.
Thomas J. Downey 45 Senior Vice President, Communications since January 2007. Prior
thereto, Vice President, Corporate Communications from April to
December 2006 and Vice President, BCA Communications from May
2002 to April 2006. Prior positions include Corporate Vice President,
Internal and Executive Communications and General Manager of
Communications and Community Relations for Military Aircraft and
Missile Systems unit. Mr. Downey joined the Company in 1986.
Shephard W. Hill 57 President, Boeing International since November 2007 and Senior
Vice President, Business Development and Strategy since October
2009. Prior thereto, Senior Vice President, Business Development
and Strategy from March 2006 to November 2007. Prior thereto, Vice
President, Business Development at BDS from September 2002 to
March 2006. Mr. Hill joined Boeing when the Company acquired
Rockwells Aerospace and Defense business in 1996, when he held
the position of Vice President, Aerospace Government Affairs and
Marketing.
116
NLRB-FOIA-00005917
Name Age Principal Occupation or Employment/Other Business Affiliations
Timothy J. Keating 48 Senior Vice President, Government Operations since June 2008.
Prior thereto, Senior Vice President, Global Government Relations,
Honeywell International Inc. from October 2002 to May 2008. Prior
thereto, Mr. Keating was Chairman of the Board and Managing
Partner of Timmons and Company (a Washington, D.C. lobbying
firm) from 1998 until 2002.
J. Michael Luttig 55 Executive Vice President and General Counsel since April 2009.
Prior thereto, Senior Vice President and General Counsel from May
2006 to April 2009. Prior thereto, Mr. Luttig served on the United
States Court of Appeals for the Fourth Circuit from October 1991 to
May 2006. Prior thereto, Assistant Attorney General of the United
States, Counselor to the Attorney General at the Department of
Justice and Principal Deputy Assistant Attorney General at the
Department of Justice. Mr. Luttig was associated with Davis Polk &
Wardwell LLP from September 1985 to March 1989. Mr. Luttig
serves on the board of Boeing Capital Corporation and as Director,
Franklin Templeton Mutual Funds.
W. James McNerney, Jr. 60 Chairman, President and Chief Executive Officer since July 2005.
Previously, he served as Chairman and Chief Executive Officer of 3M
Company (diversified technology) from January 2001 to June 2005.
Beginning in 1982, he served in management positions at General
Electric Company, his most recent being President and Chief
Executive Officer of GE Aircraft Engines from 1997 until 2000. In
addition to The Boeing Company, Mr. McNerney serves on the
boards of The Procter & Gamble Company and International
Business Machines Corporation. He is also a member of various
business and educational organizations.
Dennis A. Muilenburg 45 Executive Vice President, President and Chief Executive Officer of
BDS since September 2009. Prior thereto, President of Global
Services & Support from February 2008 to August 2009. Prior
thereto, Vice President and General Manager of Combat Systems
from May 2006 to February 2008. Prior thereto, Vice President and
Program Manager for Future Combat Systems from 2003 to May
2006. Mr. Muilenburg joined the Company in 1985.
Richard D. Stephens 57 Senior Vice President Human Resources and Administration since
September 2005. Prior thereto, Senior Vice President of Internal
Services from December 2004 to September 2005. Prior positions
include President of Shared Services Group and Vice President and
General Manager, Homeland Security and Services. Mr. Stephens
joined the Company in 1980.
John J. Tracy 55 Chief Technology Officer and Senior Vice President of Engineering,
Operations and Technology since October 2006. Prior thereto, Vice
President of Engineering and Mission Assurance for BDS, February
2004 to September 2006. Prior positions include Vice President of
Structural Technologies, Prototyping, and Quality for Phantom Works
and General Manager of Engineering for Military Aircraft and
Missiles. Dr. Tracy joined the Company in 1981.
117
NLRB-FOIA-00005918
Information relating to our directors and nominees will be included under the caption Election of
Directors in the 2010 Proxy Statement for our Annual Shareholders Meeting to be held on April 26,
2010 and is incorporated by reference herein. The information required by Items 405, 407(d)(4) and
407(d)(5) of Regulation S-K will be included under the captions Section 16(a) Beneficial Ownership
Reporting Compliance and Audit Committee in the 2010 Proxy Statement, and that information is
incorporated by reference herein.
Codes ofEthics. We have adopted (1) The Boeing Company Code of Ethical Business Conduct for the
Board of Directors; (2) The Boeing Company Code of Conduct for Finance Employees which is
applicable to our Chief Financial Officer (CFO), Controller and all finance employees; and (3) The
Boeing Code of Conduct that applies to all employees, including our Chief Executive Officer (CEO),
(collectively, the Codes of Conduct). The Codes of Conduct are posted on our website,
www.boeing.com, and printed copies may be obtained, without charge, by contacting the Office of
Internal Governance, The Boeing Company, 100 N. Riverside, Chicago, IL 60606. We intend to
disclose promptly on our website any amendments to, or waivers of, the Codes of Conduct covering
our CEO, CFO and/or Controller.
No family relationships exist among any of the executive officers, directors or director nominees.
Item 11. Executive Compensation
The information required by Item 402 of Regulation S-K will be included under the captions Executive
Compensation and Director Compensation in the 2010 Proxy Statement, and that information is
incorporated by reference herein. The information required by Item 407(e)(4) and 407(e)(5) of
Regulation S-K will be included under the captions Compensation Committee Interlocks and Insider
Participation and Compensation Committee Report in the 2010 Proxy Statement, and that
information is incorporated by reference herein.
118
NLRB-FOIA-00005919
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
The information required by Item 403 of Regulation S-K will be included under the caption Stock
Ownership Information in the 2010 Proxy Statement, and that information is incorporated by reference
herein.
Equity Compensation Plan Information
We currently maintain two equity compensation plans that provide for the issuance of common stock to
officers and other employees, directors and consultants. Each of these compensation plans was
approved by our shareholders. The following table sets forth information regarding outstanding options
and shares available for future issuance under these plans as of December 31, 2009:
Plan Category
Number of shares
to be issued upon
exercise of
outstanding
options, warrants
and rights
Weighted-average
exercise price of
outstanding
options, warrants
and rights
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
shares reflected
in column (a))
(a) (b) (c)
Equity compensation plans approved
by shareholders
Stock options 26,336,436 $63.93 44,837,882
Performance shares 771,694
Deferred compensation 4,617,343
Other stock units 3,960,670
Equity compensation plans not
approved by shareholders None None None
Total
1
35,686,143 $63.93 44,837,882
1
Excludes the potential performance awards which the Compensation Committee has the
discretion to pay in cash, stock or a combination of both after the three-year performance periods
in 2010 and 2011.
For further information, refer to Note 15 of the Consolidated Financial Statements.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by Item 404 of Regulation S-K will be included under the caption Related
Person Transactions in the 2010 Proxy Statement, and the information is incorporated by reference
herein.
The information required by Item 407(a) of Regulation S-K will be included under the caption Director
Independence in the 2010 Proxy Statement, and the information is incorporated by reference herein.
Item 14. Principal Accountant Fees and Services
The information required by this Item will be included under the caption Principal Accountant Fees and
Services in the 2010 Proxy Statement, and that information is incorporated by reference herein.
119
NLRB-FOIA-00005920
PART IV
Item 15. Exhibits, Financial Statement Schedules
(a) List of documents filed as part of this report:
1. Financial Statements
Our consolidated financial statements are as set forth under Item 8 of this report on Form
10-K.
2. Financial Statement Schedules
Schedule Description Page
II Valuation and Qualifying Accounts 126
The auditors report with respect to the above-listed financial statement schedule appears on
page 113 of this report. All other financial statements and schedules not listed are omitted
either because they are not applicable, not required, or the required information is included in
the consolidated financial statements.
3. Exhibits
(2) Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession.
(i) Agreement and Plan of Merger dated as of July 31, 1996, among Rockwell
International Corporation, The Boeing Company and Boeing NA, Inc.
(Exhibit 2.1 to the Companys Registration Statement on Form S-4 (File
No. 333-15001) filed October 29, 1996 (herein referred to as Form S-4)).
(ii) Agreement and Plan of Merger, dated as of December 14, 1996, among The
Boeing Company, West Acquisition Corp. and McDonnell Douglas
Corporation. (Exhibit (2)(ii) to the Companys Annual Report on Form 10-K
(File No. 1-442) for the year ended December 31, 1996).
(3) Articles of Incorporation and By-Laws.
(i) Amended and Restated Certificate of Incorporation of The Boeing Company
dated May 5, 2006 (Exhibit 3 (i) to the Companys Current Report on Form
8-Kdated May 1, 2006).
(ii) By-Laws of The Boeing Company, as amended and restated October 7, 2009
(Exhibit (3)(i) to the Companys Form 10-Q for the quarter ended
September 30, 2009).
(10) Material Contracts.
The Boeing Company Bank Credit Agreements
(i) U.S. $1.525 Billion 364-Day Credit Agreement dated as of November 13,
2009, among The Boeing Company, the Lenders named therein, JPMorgan
Chase Bank, N.A., as syndication agent, Citigroup Global Markets Inc. and
J.P. Morgan Securities, Inc., as joint lead arrangers and joint book managers,
and Citibank, N.A. as administrative agent for such Lenders (Exhibit 10.1 to
the Companys Current Report on Form 8-Kdated November 13, 2009).
(ii) U.S. $2.0 Billion Five-Year Credit Agreement dated as of November 16, 2007,
among The Boeing Company, the Lenders named therein, JPMorgan Chase
120
NLRB-FOIA-00005921
Bank, as syndicated agent, Citigroup Global Markets Inc. and J.P. Morgan
Securities, Inc., as joint lead arrangers and joint book managers, and
Citibank, N.A. as administrative agent for such Lenders (Exhibit (10)(ii) to the
Companys Form 10-Kfor the year ended December 31, 2007).
Business Acquisition Agreements
(iii) Joint Venture Master Agreement by and among Lockheed Martin Corporation,
The Boeing Company and a Delaware LLC, dated as of May 2, 2005
(Exhibit (10)(i) to the Companys Form 10-Q for the quarter ended June 30,
2005).
(iv) Asset Purchase Agreement, dated as of February 22, 2005 by and between
The Boeing Company and Mid-Western Aircraft Systems, Inc.
(Exhibit (10)(i) to the Companys Form 10-Q for the quarter ended March 31,
2005).
(v) Agreement and Plan of Merger, dated April 30, 2006, by and among The
Boeing Company, Boeing-Avenger, Inc., a direct wholly-owned subsidiary of
Boeing, and Aviall, Inc. (Exhibit 2.1 to the Companys Current Report on Form
8-Kdated May 4, 2006).
(vi) Delta Inventory Supply Agreement, dated as of December 1, 2006 by and
between United Launch Alliance L.L.C. and The Boeing Company (Exhibit
10.(vi) to the Companys Form 10-K for the year ended December 31, 2006
(File no. 001-00442)).
(vii) Asset Purchase Agreement by and between Vought Aircraft Industries, Inc.
and BCACSC, Inc. dated as of July 6, 2009 (Exhibit (10)(i) to the Companys
Form 10-Q for the quarter ended September 30, 2009).
Management Contracts and Compensatory Plans
(viii) 1988 Stock Option Plan.
(a) Plan, as amended on December 14, 1992 (Exhibit (10)(vii)(a) of the
Companys Annual Report on Form 10-K for the year ended
December 31, 1992 (herein referred to as 1992 Form 10-K)).
(b) Form of Notice of Terms of Stock Option Grant (Exhibit (10)(vii)(b) of the
1992 Form 10-K).
(ix) 1992 Stock Option Plan for Nonemployee Directors.
(a) Plan (Exhibit (19) of the Companys Form 10-Q for the quarter ended
March 31, 1992).
(b) Form of Stock Option Agreement (Exhibit (10)(viii)(b) of the 1992 Form
10-K).
(x) Supplemental Benefit Plan for Employees of The Boeing Company, as
amended and restated effective January 1, 2009 (Exhibit 4.1 to the
Companys Form S-8 filed on December 22, 2008).
(xi) Supplemental Retirement Plan for Executives of The Boeing Company,
as amended on March 22, 2003 (Exhibit (10)(vi) to the Companys 2003
Form 10-K).
(xii) Deferred Compensation Plan for Employees of The Boeing Company, as
amended and restated on January 1, 2008 (Exhibit (10.1 to the Companys
Current Report on Form 8-Kdated October 28, 2007).
121
NLRB-FOIA-00005922
(xiii) Deferred Compensation Plan for Directors of The Boeing Company, as
amended on January 1, 2008 (Exhibit (10)(ii) (Management Contracts) to the
Companys Current Report on Form 8-Kdated October 28, 2007).
(xiv) 1993 Incentive Stock Plan for Employees.
(a) Plan, as amended on December 13, 1993 (Exhibit (10)(ix)(a) to the
Companys Annual Report on Form 10-K for the year ended
December 31, 1993 (herein referred to as 1993 Form 10-K)).
(b) Form of Notice of Stock Option Grant.
(i) Regular Annual Grant (Exhibit (10)(ix)(b)(i) to the 1993 Form 10K).
(ii) Supplemental Grant (Exhibit (10)(ix)(b)(ii) to the 1993 Form 10K).
(xv) Incentive Compensation Plan for Employees of the Company and
Subsidiaries, as amended and restated on January 1, 2008 (Exhibit (10.7) to
the Companys Current Report on Form 8-Kdated October 28, 2007).
(xvi) 1997 Incentive Stock Plan, as amended and restated on January 1, 2008
(Exhibit 10.5 to the Companys Current Report on Form 8-K dated
October 28, 2007).
(xvii) Amended and Restated Executive Employment Agreement with W. James
McNerney, Jr. dated March 13, 2008 (Exhibit 10.1 to the Companys Current
Report on Form 8-Kdated March 13, 2008).
(xviii) Restricted Stock Award Agreement between The Boeing Company and
W. James McNerney, Jr., dated July 1, 2005 (Exhibit (10)(ii) to the Companys
Form 10-Q for the quarter ended June 30, 2005).
(xix) Restricted Stock Award Agreement between The Boeing Company and
W. James McNerney, Jr., dated July 1, 2005 (Exhibit (10)(iii) to the
Companys Form 10-Q for the quarter ended June 30, 2005).
(xx) Restricted Stock Award Agreement between The Boeing Company and
W. James McNerney, Jr., dated July 1, 2005 (Exhibit (10)(iv) to the
Companys Form 10-Q for the quarter ended June 30, 2005).
(xxi) Restricted Stock Unit Grant Notice of terms, effective August 29, 2005
(Exhibit 99.1 to the Companys Current Report on Form 8-K dated
September 2, 2005).
(xxii) Compensation for Directors of The Boeing Company (Exhibit (10)(i) to the
Companys Form 10-Q for the quarter ended September 30, 2008).
(xxiii) 2006 Compensation for Named Executive Officers (The Companys Current
Report on Form 8-K dated March 3, 2006). (Form of Performance Award.
Form of Non-Qualified Stock Option Grant Notice.)
(xxiv) The McDonnell Douglas 1994 Performance and Equity Incentive Plan
(Exhibit 99.1 of Registration Statement No. 333-32567 on Form S-8 filed on
July 31, 1997).
(xxv) The Boeing Company ShareValue Program, as amended on September 7,
2004 (Exhibit 10.22 to the Companys Annual Report on Form 10-K for the
year ended December 31, 2005).
(xxvi) Stock Purchase and Restriction Agreement dated as of July 1, 1996, between
The Boeing Company and Wachovia Bank of North Carolina, N.A. as Trustee,
under the ShareValue Trust Agreement dated as of July 1, 1996 (Exhibit
10.20 to the Form S-4).
122
NLRB-FOIA-00005923
(xxvii) 2004 Variable Compensation Plan (formerly the 1999 Bonus and Retention
Award Plan) as amended and restated effective January 1, 2008 (Exhibit 10.8
to the Companys Current Report in Form 8-Kdated October 28, 2007).
(xxviii) Restricted Stock Unit Grant Agreement with James F. Albaugh, dated
December 7, 1999 (Exhibit (10)(xix) to the Companys Annual Report on Form
10-Kfor the year ended December 31, 2000).
(xxix) The Boeing Company Executive Layoff Benefits Plan as amended and
restated effective January 1, 2010.
(xxx) The Boeing Company 2003 Incentive Stock Plan (As Amended and Restated
Effective February 23, 2009) (Appendix A to the Definitive Proxy Statement
filed by the Company on March 13, 2009).
(xxxi) Supplemental Executive Retirement Plan for Employees of the Boeing
Company, as amended and restated on January 1, 2008 (Exhibit (10)(i) to the
Companys Current Report on Form 8-Kdated December 10, 2007).
(xxxii) The Boeing Company Elected Officer Annual Incentive Plan as amended and
restated effective January 1, 2008 (Exhibit 10.6 to the Companys Current
Report on Form 8-Kdated October 28, 2007).
(xxxiii) Supplemental Pension Agreement between The Boeing Company and
J. Michael Luttig dated January 25, 2007 as amended on November 14, 2007
(Exhibit (10)(xxx) to the Companys Form 10-K for the year ended
December 31, 2007).
(xxxiv) Amended Notice of Terms of Restricted Stock Units (Exhibit 10.1 to the
Companys Current Report on Form 8-Kdated October 25, 2009).
(xxxv) Notice of Terms of Restricted Stock Units for certain executive officers dated
February 23, 2009 (Exhibit (10)(ii) to the Companys Form 10-Q for the
quarter ended March 31, 2009).
(xxxvi) Registration Rights Agreement dated November 9, 2009 by and between The
Boeing Company and EvercoreTrust Company, N.A., solely in its capacity as
duly appointed and acting investment manager of a segregated account held
in The Boeing Company Employee Retirement Plans Master Trust (the
Trust) (Exhibit 10.1 to the Companys Form S-3 Registration Statement filed
November 10, 2009).
(12) Computation of Ratio of Earnings to Fixed Charges.
(14) Code of Ethics
(i) The Boeing Company Code of Ethical Business Conduct for Member of the
Board of Directors (http://www.boeing.com/corp_gov/conduct_board.html).
(ii) The Boeing Company Code of Conduct for Finance Employees
(http://www.boeing.com/corp_gov/conduct_finance.html).
(iii) The Boeing Company Code of Conduct (http://www.boeing.com/corp_gov/
conduct_employee.html).
(21) List of Company Subsidiaries.
(23) Consent of Independent Registered Public Accounting Firm in connection with filings on
Form S-8 under the Securities Act of 1933.
123
NLRB-FOIA-00005924
(31) Section 302 Certifications.
(i) Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-
Oxley Act of 2002.
(ii) Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes-
Oxley Act of 2002.
(32) Section 906 Certifications.
(i) Certification of Chief Executive Officer pursuant to Section 906 of Sarbanes-
Oxley Act of 2002.
(ii) Certification of Chief Financial Officer pursuant to Section 906 of Sarbanes-
Oxley Act of 2002.
(99) Additional Exhibits
(i) Commercial Program Method of Accounting (Exhibit (99)(i) to the 1997 Form
10-K).
(ii) Post-Merger Combined Statements of Operations and Financial Position
(Exhibit (99)(i) to the Companys Form 10-Q for the quarter ended June 30,
1997).
(101) Interactive Data Files
(101.INS) XBRL Instance Document
(101.SCH) XBRL Taxonomy Extension Schema Document
(101.CAL) XBRL Taxonomy Extension Calculation Linkbase Document
(101.DEF) XBRL Taxonomy Extension Definition Linkbase Document
(101.LAB) XBRL Taxonomy Extension Label Linkbase Document
(101.PRE) XBRL Taxonomy Extension Presentation Linkbase Document
In accordance with Item 601(b)(4)(iii)(A) of Regulation S-K, copies of certain instruments defining the
rights of holders of long-term debt of the Company or its subsidiaries are not filed herewith. Pursuant to
this regulation, we hereby agree to furnish a copy of any such instrument to the SEC upon request.
124
NLRB-FOIA-00005925
Signatures
Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on
February 8, 2010.
THE BOEING COMPANY
By: By:
W. James McNerney, Jr. Chairman,
President and Chief Executive Officer
James A. Bell Executive Vice
President, Corporate President
and Chief Financial Officer
By:
Robert J. Pasterick Vice President
of Finance & Corporate Controller
125
NLRB-FOIA-00005926
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the registrant and in the capacities indicated on
February 8, 2010.
John H. Biggs Director Kenneth M. Duberstein Director
John E. Bryson Director Edmund P. Giambastiani, Jr. Director
David L. Calhoun Director John F. McDonnell Director
Arthur D. Collins, Jr. Director W. James McNerney, Jr. Director
Linda Z. Cook Director Mike S. Zafirovski Director
William M. Daley Director
126
NLRB-FOIA-00005927
SCHEDULE IIValuation and Qualifying Accounts
Allowance for Customer Financing and Other Assets
(Deducted from assets to which they apply)
Customer Financing 2009 2008 2007
Balance at January 1 $ 269 $ 195 $ 254
Charged to costs and expenses 45 84
Deductions from reserves (12) (10) (59)
Balance at December 31 $ 302 $ 269 $ 195
Sea Launch Reserves 2009 2008 2007
Balance at January 1 $ 723 $ 660 $ 598
Additions
(1)
246 63 63
Deductions from reserves (1)
Balance at December 31
(2)
$ 969 $ 723 $ 660
(1)
Includes $179 transferred in from Other accrued liabilities and $67 in charges to costs and
expenses.
(2)
At December 31, 2009, $476 was related to other assets and $493 was related to our share of
credit guarantees and receivables for partner loans. At December 31, 2008 and 2007, the entire
amount was included in Other assets.
EXHIBIT (12)
Computation of Ratio of Earnings to Fixed Charges
Years ended December 31, 2009 2008 2007 2006 2005
Earnings before federal taxes on income $1,731 $3,995 $6,118 $3,194 $2,819
Fixed charges excluding capitalized interest 564 492 557 636 699
Amortization of previously capitalized interest 61 50 58 51 54
Net adjustment for earnings/loss from affiliates (10) (10) (28) (12) (9)
Earnings available for fixed charges $2,346 $4,527 $6,705 $3,869 $3,563
Fixed charges:
Interest and debt expense
(1)
$ 514 $ 425 $ 491 $ 593 $ 653
Interest capitalized during the period 90 99 117 110 84
Rentals deemed representative of an interest factor 50 67 66 43 46
Total fixed charges $ 654 $ 591 $ 674 $ 746 $ 783
Ratio of earnings to fixed charges 3.6 7.7 9.9 5.2 4.6
(1)
Amount does not include tax-related interest expense which is reported as a component of Income
tax expense in our Consolidated Statements of Operations.
127
NLRB-FOIA-00005928
EXHIBIT (21)
List of Company Subsidiaries
Name Place of Incorporation
757UA, Inc. Delaware
ACN 106 604 871 Pty Ltd Australia
AeroSpace Technologies of Australia Limited Australia
Aileron Inc. Delaware
Akash, Inc. Delaware
Alteon Training International Spain, S.L. Spain
Alteon Training Mexico, S.A. de C.V. Mexico
Alteon Training Services, Inc. Delaware
Astro Limited Bermuda
Astro-II, Inc. Vermont
Atara Holding Company Delaware
Atara Services Norway AS Norway
Autometric, Inc. Maryland
Autonomous Underwater Ventures, LLC Delaware
Aviall (Canada) Ltd. Ontario
Aviall Airstocks Limited Hong Kong
Aviall Asia Limited Hong Kong
Aviall Australia Holdings Pty Ltd Australia
Aviall Australia Pty. Limited Australia
Aviall de Mexico, S.A. de C.V. Mexico
Aviall Foreign Sales Corporation Barbados
Aviall Japan Limited Delaware
Aviall New Zealand New Zealand
Aviall Product Repair Services, Inc. Delaware
Aviall PTE LTD Singapore
Aviall Services, Inc. Delaware
Aviall, Inc. Delaware
Aviation Fleet Services India Management Company Limited Cyprus
BCC Aruba Leasing A.V.V. Netherlands Antilles
BCC Bolongo Company Delaware
BCC Bolongo Limited Virgin Islands, U.S.
BCC Carbita Point Company Delaware
BCC Carbita Point Limited Virgin Islands, U.S.
BCC Cascades Corporation Delaware
BCC Charlotte Amalie Company Delaware
BCC Charlotte Amalie Limited Virgin Islands, U.S.
BCC Cove Corporation Delaware
BCC Drakes Passage Company Delaware
BCC Equipment Leasing Corporation Delaware
BCC Grand Cayman Limited Cayman Islands
BCC Lindbergh Bay Company Delaware
BCC Mafolie Hill Company Delaware
BCC Magens Bay Company Delaware
BCC Red Hook Company Delaware
BITG Corporation Delaware
128
NLRB-FOIA-00005929
BITG LLP Washington
BNA International Systems, Inc. Delaware
BNA Operations International, Inc. Delaware
BNJ Net Jets, Inc. Delaware
BNJ Sales Company L.L.C. Delaware
BNJ, Inc. Delaware
Boeing Corinth Co. Delaware
Boeing Irving Co. Delaware
Boeing Training Leasing Corp. Delaware
Boeing (Asia) Investment Limited, a Hong Kong company Hong Kong
Boeing (Asia) Services Investment Limited, a Hong Kong company Hong Kong
Boeing (China) Co., Ltd. China
Boeing (Gibraltar) Holdings Limited Gibraltar
Boeing (Gibraltar) Limited Gibraltar
Boeing 100 North Riverside LLC Illinois
Boeing Aerospace TAMS, Inc. Delaware
Boeing Aerospace (Malaysia) Sdn. Bhd. Malaysia
Boeing Aerospace Ltd. Delaware
Boeing Aerospace Middle East Limited Delaware
Boeing Aerospace Operations International, Inc. Delaware
Boeing Aerospace Operations, Inc. Delaware
Boeing Aerostructures Australia Pty Ltd. Australia
Boeing Airborne Surveillance Enterprises, Inc. Delaware
Boeing Aircraft Holding Company Delaware
Boeing Asia Training Holdings Limited Hong Kong
Boeing Australia Component Repairs Pty Ltd Australia
Boeing Australia Holdings Proprietary Limited Australia
Boeing Brasil Servios Tcnicos Aeronuticos Ltda. Brazil
Boeing Business Services Company Delaware
Boeing Canada Holding Ltd. Alberta
Boeing Canada Operations Ltd. Alberta
Boeing Capital Corporation Delaware
Boeing Capital Leasing Limited Ireland
Boeing Capital Loan Corporation Delaware
Boeing Capital Securities Inc. Delaware
Boeing Capital Washington Corporation Delaware
Boeing CAS GmbH Germany
Boeing CAS Holding GmbH Germany
Boeing China, Inc. Delaware
Boeing Commercial Airplanes Charleston South Carolina, Inc. Delaware
Boeing Commercial Space Company Delaware
Boeing Constructors, Inc. Texas
Boeing Cyprus Holdings Ltd Cyprus
Boeing Defence Australia LTD Australia
Boeing Defence UKLimited United Kingdom
Boeing Domestic Sales Corporation Washington
Boeing Enterprises Australia, Inc. Delaware
Boeing Financial Corporation Washington
Boeing Global Holdings Corporation Delaware
Boeing Global Sales Corporation Delaware
129
NLRB-FOIA-00005930
Boeing Global Services, Inc. Delaware
Boeing Hornet Enterprises, Inc. Delaware
Boeing Hungary, Inc. Delaware
Boeing India Property Management Private Limited India
Boeing International B.V. Netherlands
Boeing International B.V. & Co. Holding KGaA Germany
Boeing International Corporation Delaware
Boeing International Corporation India Private Limited India
Boeing International Holdings, Ltd. Bermuda
Boeing International Logistics Spares, Inc. Delaware
Boeing International Overhaul & Repair Inc. Delaware
Boeing International Sales Corporation Washington
Boeing International Support Systems Company Saudi Arabia
Limited Saudi Arabia
Boeing Investment Company, Inc. Delaware
Boeing Ireland Limited Ireland
Boeing Japan Kabushiki Kaisha Japan
Boeing Launch Services, Inc. Delaware
Boeing Logistics Spares, Inc. Delaware
Boeing LTS, Inc. Delaware
Boeing Management Company Delaware
Boeing Middle East Limited Delaware
Boeing Netherlands B.V. Netherlands
Boeing Netherlands C.V. Netherlands
Boeing Netherlands Leasing, B.V. Netherlands
Boeing Nevada, Inc. Delaware
Boeing North American Space Alliance Company Delaware
Boeing North American Space Operations Company Delaware
Boeing Norwegian Holdings AS Norway
Boeing of Canada Ltd. Delaware
Boeing Offset Company Inc. Delaware
Boeing Operations International, Incorporated Delaware
Boeing Overseas, Inc. Delaware
Boeing Phantom Works Investments, Inc. Delaware
Boeing Precision Gear, Inc. Delaware
Boeing Qatar Inc. Delaware
Boeing Research & Technology Europe, S.L. Spain
Boeing Russia, Inc. Delaware
Boeing Sales Corporation Guam
Boeing Satellite Systems International, Inc. Delaware
Boeing Satellite Systems, Inc. Delaware
Boeing Service Company Texas
Boeing Shanghai Aviation Flight Training Co., Ltd. China
Boeing Singapore Training and Flight Services Pte. Ltd. Singapore
Boeing Space Operations Company Delaware
Boeing Stellar Holdings B.V. Netherlands
Boeing Stores, Inc. Delaware
Boeing Sweden Holdings AB Sweden
Boeing Training & Flight Services Australia Pty Ltd Australia
Boeing Training Center Management Company Limited Cyprus
130
NLRB-FOIA-00005931
Boeing Training Services Korea LLC Korea, Republic of
Boeing Travel Management Company Delaware
Boeing UK Training and Flight Services Holding Limited (f/k/a Alteon
Training Holding UKLimited) United Kingdom
Boeing UK Training and Flight Services Limited (f/k/a Alteon Training
UKLimited) United Kingdom
Boeing United Kingdom Limited United Kingdom
Boeing US Training and Flight Services L.L.C. Delaware
Boeing Worldwide Holdings B.V. Netherlands
Boeing Worldwide Operations Limited Bermuda
Boeing-SVS, Inc. Nevada
CAG, Inc. Oregon
Carmen Options AB Sweden
CBSA Leasing II, Inc. Delaware
CBSA Leasing, Inc. Delaware
CBSA Partners, LLC Delaware
C-Map USA, Inc. Delaware
C-Map/Commercial, Ltd. Massachusetts
Connexion by Boeing Ireland Limited Ireland
Connexion By Boeing Of Canada Company Canada
Conquest, Inc. Maryland
Continental DataGraphics Limited United Kingdom
Continental DataGraphics Technical Services India Private Limited India
Continental Graphics Corporation Delaware
Continental Graphics Holdings, Inc. Delaware
Cougar, Ltd. Bermuda
Cruise L.L.C. Russian Federation
Delmar Photographic & Printing Company North Carolina
Digital Receiver Technology, Inc. Maryland
Dillon, Inc. Delaware
Douglas Express Limited Virgin Islands, U.S.
Douglas Federal Leasing Limited Virgin Islands, U.S.
Douglas Leasing Inc. Delaware
Falcon II Leasing Limited Virgin Islands, U.S.
Falcon Leasing Limited Virgin Islands, U.S.
Frontier Systems, Inc. California
FSBTI Argentina S.R.L. Argentina
Global Aeronautica, LLC Delaware
Hanway Corporation Delaware
Hawk Leasing, Inc. Delaware
ILS eBusiness Services, Inc. Delaware
Insitu Pacific Pty Ltd Australia
Insitu, Inc. Washington
Intellibus Network Solutions, Inc. Delaware
Inventory Locator Service, LLC Delaware
Inventory Locator Service-UK, Inc. Delaware
Jeppesen (Canada) Ltd. Quebec
Jeppesen Asia/Pacific Pte. Ltd. Singapore
Jeppesen Australia Pty Ltd Australia
Jeppesen DataPlan, Inc. Delaware
131
NLRB-FOIA-00005932
Jeppesen GmbH Germany
Jeppesen Hellas Marine Single Member Limited Liability Company Greece
Jeppesen India Private Limited India
Jeppesen Italia S.r.l. Italy
Jeppesen Japan K.K. Japan
Jeppesen Korea Co., Ltd. Korea, Republic of
Jeppesen Malaysia Sdn. Bhd. Malaysia
Jeppesen Marine Australia Pty Limited Australia
Jeppesen Marine UKLimited United Kingdom
Jeppesen Marine, Inc. Delaware
Jeppesen Norway AS Norway
Jeppesen Optimization Solution AB Sweden
Jeppesen Optimization Solutions UKLtd United Kingdom
Jeppesen Optimization Solutions, Inc. Delaware
Jeppesen Poland Spolka z ograniczona odpowiedzialnoscia Poland
Jeppesen Sanderson, Inc. Delaware
Jeppesen South Africa (Proprietary) Ltd. South Africa
Jeppesen Systems AB Sweden
Jeppesen U.K. Limited United Kingdom
Jeppesen Ukraine Ukraine
Kestrel Enterprises, Inc.
Kuta-One Aircraft Corporation, Limited Delaware
Kuta-Two Aircraft Corporation Delaware
Longacres Park, Inc. Washington
McDonnell Douglas Dakota Leasing, Inc. Delaware
McDonnell Douglas Express, Inc. Delaware
McDonnell Douglas F-15 Technical Services Company, Inc. Delaware
McDonnell Douglas Foreign Sales Corporation Virgin Islands, U.S.
McDonnell Douglas Helicopter Support Services, Inc. Delaware
McDonnell Douglas Indonesia Leasing, Inc. Delaware
McDonnell Douglas Middle East, Ltd. Delaware
McDonnell Douglas Services, Inc. Missouri
McDonnell Douglas Truck Services, Inc. Delaware
MD Indonesia Limited Virgin Islands, U.S.
MD-Air Leasing Limited Virgin Islands, U.S.
MDFC Aircraft Leasing Company Delaware
MDFC Aircraft Leasing Limited Virgin Islands, U.S.
MDFC Carson Company Delaware
MDFC Carson Limited Virgin Islands, U.S.
MDFC Express Leasing Company Delaware
MDFC Express Leasing Limited Virgin Islands, U.S.
MDFC Knoxville Company Delaware
MDFC Knoxville Limited Virgin Islands, U.S.
MDFC Lakewood Company Delaware
MDFC Memphis Company Delaware
MDFC Memphis Limited Virgin Islands, U.S.
MDFC Reno Company Delaware
MDFC Sierra Company Delaware
MDFC Spring Limited Virgin Islands, U.S.
MDFC Tahoe Company Delaware
132
NLRB-FOIA-00005933
MDFC Spring Company Delaware
MD-Federal Holding Company Delaware
Montana Aviation Research Company Delaware
Morintech Ltd. Russian Federation
Ocean Systems Incorporated California
ORCAS Leasing B.V. Netherlands
OU Jeppesen Estonia Estonia
Pacific Business Enterprises, Inc. Delaware
Preston Aviation Solutions Limited United Kingdom
Preston Aviation Solutions Pty Ltd Australia
Raven Leasing, Inc. Delaware
RGL-3 Corporation Delaware
RGL-4 Corporation Delaware
Rocketdyne, Inc. Delaware
Skarven Enterprises, Inc. Delaware
Spectrolab, Inc. California
Taiko Leasing, Inc. Delaware
Tapestry Solutions, Inc. California
Thayer Leasing Company-1 Delaware
Wingspan, Inc. Delaware
Yunnan Alteon Boeing Advanced Flight Training Co., Ltd China
Total Number of Subsidiaries: 263
133
NLRB-FOIA-00005934
EXHIBIT (23)
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement Nos. 33-25332, 33-31434,
33-43854, 33-58798, 33-52773, 333-03191, 333-16363, 333-26867, 333-32461, 333-32491,
333-32499, 333-32567, 333-35324, 333-41920, 333-47450, 333-54234, 333-73252, 333-107677,
333-140837, 333-156403, 333-160752 and 333-163637 on Form S-8 and Post-Effective Amendments
to Registration Statement Nos. 333-03191, 333-35324, and 333-47450, on Form S-8, and Registration
Statement Nos. 333-157790 and 333-163020 on Form S-3 of our reports dated February 8, 2010,
relating to the financial statements and financial statement schedule of The Boeing Company, and the
effectiveness of The Boeing Companys internal control over financial reporting appearing in the
Annual Report on Form 10-K, for the year ended December 31, 2009.
Chicago, Illinois
February 8, 2010
134
NLRB-FOIA-00005935
EXHIBIT (31)(i)
CERTIFICATION PURSUANT TO
RULE 13a-14 OF THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEYACT OF 2002
I, W. James McNerney, Jr., certify that:
1. I have reviewed this annual report on Form 10-Kof The Boeing Company;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by
this report;
3. Based on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrants internal control over financial reporting
that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal
quarter in the case of an annual report) that has materially affected, or is reasonably likely to
materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer(s) and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the audit
committee of the registrants board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect the registrants
ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrants internal control over financial reporting.
Date: February 8, 2010
Chief Executive Officer
135
NLRB-FOIA-00005936
EXHIBIT (31)(ii)
RULE 13a-14 OF THE SECURITIES EXCHANGE ACT OF 1934,
I, James A. Bell, certify that:
1. I have reviewed this annual report on Form 10-Kof The Boeing Company;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by
this report;
3. Based on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrants internal control over financial reporting
that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal
quarter in the case of an annual report) that has materially affected, or is reasonably likely to
materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer(s) and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the audit
committee of the registrants board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect the registrants
ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrants internal control over financial reporting.
Date: February 8, 2010
James A. Bell
Executive Vice President, Corporate
President and Chief Financial Officer
136
NLRB-FOIA-00005937
EXHIBIT (32)(i)
18 U.S.C. SECTION 1350,
In connection with the Annual Report of The Boeing Company (the Company) on Form 10-K for the
period ending December 31, 2009, as filed with the Securities and Exchange Commission on the date
hereof (the Report), I, W. James McNerney, Jr., Chairman, President and Chief Executive Officer of
the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-
Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended; and
(2) The information contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.
Chief Executive Officer
February 8, 2010
137
NLRB-FOIA-00005938
EXHIBIT (32)(ii)
18 U.S.C. SECTION 1350,
In connection with the Annual Report of The Boeing Company (the Company) on Form 10-K for the
period ending December 31, 2009, as filed with the Securities and Exchange Commission on the date
hereof (the Report), I, James A. Bell, Executive Vice President, Corporate President and Chief
Financial Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906
of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended; and
(2) The information contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.
James A. Bell
President and Chief Financial Officer
February 8, 2010
138
NLRB-FOIA-00005939
*Orders and deliveries are as of December 31, 2009.
Selected Programs, Products and Services
139
Boeing Commercial Airplanes James F. Albaugh, President and Chief Executive Of cer, Renton, Washington, USA
The Boeing 747-400
747-8
Boeing launched the 747-8 program, including
the 747-8 Intercontinental passenger airplane and
the 747-8 Freighter, in late 2005. The Freighter
will enter service in fourth quarter 2010, followed
by the Intercontinental in fourth quarter 2011.
The 747-8 will be the only airplane in the 400- to
500-seat market, seating 467 passengers in a
typical three-class con guration (51 more than the
747-400). The Freighter will carry 16 percent more
revenue cargo volume than the 747-400 Freighter,
and will be the industrys only nose-cargo-loading
jet. Both the passenger and freighter variants of
the 747-8 have an increased maximum takeoff
weight of 442,252 kilograms (975,000 pounds)
and represent a new benchmark in fuel ef ciency
and noise reduction, allowing airlines to lower fuel
costs and y into more airports at more times of
the day. Production of the 747-400 ended in 2009.
The 747-8 family also includes a VIP version, which
provides 4,786 square feet of cabin space.
Orders: 1,526*
Deliveries:1,418*
The Boeing 777-200ER
777-200LR
777-300ER
777 Freighter
With its wide fuselage, generous stowage and
elegant interior, the 777 has been voted the best
aircraft by the readers of Executive TravelMagazine
for two years in a row. At the top of the charts for
reliability and productivity, the 777 helps airlines
maximize earnings, and exemplary environmental
performance makes the 777 a welcome visitor to
highly regulated airports. The 777s long range
(up to 9,395 nautical miles) and large payload
capability (301 to 365 passengers in a typical
three-class con guration) give operators access
to the worlds fastest growing passenger markets.
The 777 Freighter (with 102 tonnes of revenue
payload capability) is the largest and longest-range
twin-engine freighter and has the lowest trip costs
of any large freighter.
Orders: 1,117*
Deliveries: 836*
The Boeing 767-200ER
767-300ER
767-400ER
The 767 is the rst widebody jetliner to be
stretched twice. The 767-300ER is 6.43 meters
(21 feet) longer than the original 767-200ER, and
the 767-400ER is 6.43 meters (21 feet) longer than
the 767-300ER. The 767 is the favorite airplane
on Atlantic routes, crossing the Atlantic more
frequently than any other airplane. The 767 has
the lowest trip costs of any twin-aisle airplane in
service. The 767-200ER will typically y 181 to
224 passengers up to 6,600 nautical miles, while
the 767-300ER offers 20 percent more passenger
seating than the 767-200ER and has a range of
almost 6,000 nautical miles. A freighter version
based on the 767-300ER fuselage is available.
Boeing also offers the 767-400ER, which seats
245 to 304 passengers and has a range of
5,625 nautical miles. In a high-density inclusive-
tour arrangement, the 767-400ER can carry up
to 375 passengers.
Orders: 1,041*
Deliveries: 982*
The Boeing 737-600 737-700
737-800 737-900ER
The Boeing 737 is the best-selling family of com-

mercial jetliners of all time. The Next-Generation
737s (-600/-700/-700ER/-800/-900ER) incor-
porate advanced technology and design features
that translate into cost-ef cient, high-reliability
operations and superior passenger satisfaction.
The 737 spans the entire 110- to 220-seat market
with ranges of more than 3,000 nautical miles. This
exibility gives operators the ability to respond
effectively to market needs. The 737 family also
includes four business jetsBBJsderivatives of
the Next-Generation 737-700, 737-700 Convertible,
737-800 and 737-900ER.
Orders: 8,336 (totalforall737s)*
5,204 (Next-Generation)*
Deliveries: 6,260 (totalforall737s)*
3,128 (Next-Generation)*
The Boeing 787 The Boeing 787 Dreamliner is a super-ef cient
commercial airplane that applies the latest tech-
nologies in aerospace. The airplane will carry 210
to 330 passengers and y 2,500 to 8,500 nautical
miles, while providing dramatic savings in fuel use
and operating costs. Its exceptional performance
will come from improvements in engine technology,
aerodynamics, materials and systems. It will be the
most advanced and ef cient commercial airplane in
its class and will set new standards for environ-
mental performance and passenger comfort.
The 787 family also includes VIP versions, which
provide more than 2,400 square feet of cabin
space and can y its owners almost anywhere in
the world nonstop.
Orders: 851*
First deliveryscheduled forfourth quarter2010
Boeing Commercial Aviation Services Boeing Commercial Aviation Services provides
Lifecycle Solutions, the industrys most complete
range of products and services, aimed at bringing
superior value to our customers throughout the
lives of their Boeing eets. This organization is com-
mitted to the success of the air transport industry
through a comprehensive worldwide customer
support network, e-enabled systems for greater
maintenance and operational ef ciency, freighter
conversions, spare parts, airplane modi cation
and engineering support. Training & Flight Services
(formerly Alteon), the Boeing training and services
component, is a Boeing Commercial Airplanes
business unit reporting through Commercial Avia-
tion Services. Additionally, Commercial Aviation
Services oversees the Jeppesen and Aviall subsid-
iaries and joint ventures such as Aviation Partners
Boeing and Boeing Shanghai Aviation Services.
NLRB-FOIA-00005940
Boeing Defense, Space & Security Dennis A. Muilenburg, President and Chief Executive Of cer, St. Louis, Missouri, USA
737-700 Airborne Early Warning and
Control (AEW&C) System
The 737 AEW&C system encompasses the Boeing
737-700 aircraft platform and a variety of aircraft
control and advanced radar systems. The 737
AEW&C is the standard for future airborne early
warning systems. Boeing delivered the rst two
of six Australian Wedgetail AEW&C systems with
Initial Training Capability in 2009. Three additional
Wedgetail aircraft will be delivered to the Royal
Australian Air Force by the end of 2010, including
one upgraded in the nal AEW&C con guration
with Electronic Support Measures (ESM). All aircraft
in the Wedgetail eet will be upgraded in the nal
con guration in early 2011. Three 737-700 aircraft
for the Republic of Turkeys Peace Eagle program
have been modi ed into a Peace Eagle con guration.
The rst aircraft is currently undergoing Develop-
mental Test and Evaluation while the nal aircraft is
undergoing con guration modi cation in Ankara,
Turkey. Modi cation of the Republic of Koreas
rst aircraft for its AEW&C program continues as
planned in Seattle.
A-10 Wing Replacement Program In 2007, the U.S. Air Force awarded Boeing a
contract for computer-aided design modeling in
support of the A-10 program. Boeing was also
awarded a contract for engineering services and
the manufacture of 242 wing sets for the A-10
eet. These awards were based on Boeings
expertise with converting legacy two-dimensional
drawings to three-dimensional environments and
experience with aircraft wing structures. The A-10
Wing Replacement Program will be executed over
two ve-year periods.
A160 Turbine (A160T) Hummingbird The A160T Hummingbird is an unmanned rotor-
craft system that offers increased performance
capabilities to reach higher altitudes, hover for
longer periods of time, y greater distances and
operate more quietly than current rotorcraft. Its
unique Optimum Speed-Rotor system allows blade
revolutions-per-minute to be tailored to ight
conditions to improve engine ef ciency. The A160T
is being developed to operate autonomously at sea
and over austere land environments and complex
urban terrain. Its missions include intelligence,
surveillance and reconnaissance; communications
relay; precision re-supply and direct attack.
In 2009, the Hummingbird was selected to
participate in the U.S. Marine Corps War ghting
Laboratorys Immediate Cargo Unmanned Aerial
System Demonstration Program.
AH-64D Apache Longbow The AH-64D Apache Longbow is the most capable,
survivable, deployable and maintainable multimis-
sion combat helicopter in the world. After Boeing
completed U.S. government multiyear contracts for
501 Apache Longbows, the U.S. Army contracted
with Boeing for 52 new and 96 remanufactured
Apaches. Boeing will begin deliveries of the
AH-64D Apache Block III to the Army in mid-2011.
This newest version of the Apache Longbow
features enhanced aircraft performance, joint digital
operability, survivability and cognitive decision
aiding, while reducing operations and support
costs. The Block III program this year successfully
demonstrated control of a Level IV unmanned
aircraft system and the rst ight of its structures
test aircraft. Advanced Apache customers include
Egypt, Greece, Israel, Japan, Kuwait, Singapore,
the Netherlands, the United Arab Emirates, Taiwan,
Turkey and the United Kingdom. Boeing also
provides performance-based logistics sustainment
services for the Armys Apache eet, as well as a
full suite of Apache training devices for domestic
and international customers.
2009 deliveries: 23 new, 51 remanufactured
Airborne Laser Testbed (ALTB) Boeing is the prime contractor for ALTB, a
directed-energy weapon system using speed-of-
light lethality to detect, track and destroy ballistic
missiles in the boost phase, when they are most
vulnerable. The ALTB aircraft is a modi ed Boeing
747-400F. ALTB engaged three missiles during
2009, showing successful acquisition, tracking,
and atmospheric correction with a low-power laser.
The team also red the high-energy laser in ight.
In February 2010, ALTB successfully demonstrated
a shoot-down of a boosting ballistic missile.
Ares I Ares I is a two-stage rocket designed to carry the
Orion crew exploration vehicle to low-Earth orbit.
This rocket could replace the space shuttle as
NASAs primary vehicle for human space explora-
tion. Boeing is NASAs design and production
partner for the instrument unit avionics and the
upper stage. The contracts have a combined
value of almost $2 billion and mark the rst major
contracts that Boeing has earned under NASAs
Constellation program. NASA conducted the rst
ight test labeled Ares I-Xin October 2009.
However, the FY2011 federal budget presented
to Congress in February 2010, calls for ending the
Constellation program, which includes the Ares I
and Orion programs.
B-1/B-52 Bombers
B-1 Bomber B-52 Bomber
The B-1B Lancer is a long-range bomber in service

with the U.S. Air Force since 1984. The B-1s com-
bination of high speed, large payload, long range
and persistence has distinguished the aircraft in
operations. The B-1 is capable of rapidly delivering
large quantities of precision munitions through any
weather, anyplace in the world, anytime. The B-52
Stratofortress is in its fourth decade of operational
service. Its primary mission is to provide the United
States with immediate nuclear and conventional
global capability. Due to its high mission-capable
rate, long range, persistence and ability to employ
accurate standoff weapons and Joint Direct
Attack Munitions, the B-52 continues to be a
major contributor to U.S. and allied forces.
140
NLRB-FOIA-00005941
141
Boeing Defense, Space & Security continued
Brigade Combat Team Modernization (BCTM)
BCTM
BCTM, formerly known as Future Combat Systems,
is the cornerstone of the U.S. Armys moderniza-
tion strategy. Under the program, the Army will
build a versatile mix of mobile, networked Brigade
Combat Teams (BCTs) that can leverage mobil-
ity, protection, information and precision res to
conduct effective operations across the spectrum
of con ict. Composed of unmanned air and ground
vehicles, unattended sensors and precision res,
and linked by a cutting-edge mobile network, the
BCTM program will modernize Army BCTs
with increased intelligence, surveillance and
reconnaissance capabilities. As the prime con-
tractor, Boeing, along with Science Applications
International Corp., manages a best-of-industry
team of hundreds of suppliers. The team expects
to deliver the rst brigade set of equipment to the
Army in 2011.
C-130 Avionics Modernization Program
(AMP)
The C-130 AMP modernizes, standardizes and re-
duces total ownership costs for the U.S. Air Force
C-130 eet. The new digital glass cockpit and
software results in a common core avionics suite
and gives the crew more situational awareness
and improved mission execution while simplifying
tasks and decreasing workload. In 2009, Boeing
successfully completed the rst test ight of the
Air Forces third C-130 AMP aircraft and delivered
three C-130 AMP training simulators to the Air
Force. The program is scheduled to enter the next
phase of Low-Rate Initial Production and start
full-rate production in 2012.
C-17 Globemaster III The C-17 Globemaster III, the worlds most
advanced and versatile airlifter, is designed for
long-range transport of equipment, supplies and
troops. Capable of operating from short, austere
even dirt runways close to the front lines, the
C-17 is being used extensively to support combat
operations in Iraq and Afghanistan, and plays an
integral role in global humanitarian relief efforts.
The FY2009 Supplemental Defense Spending Bill
included eight C-17s, bringing the U.S. Air Force
program of record to 213. The 2010 Defense
Appropriations Bill, signed in December 2009,
included an additional 10 C-17s. At the end of
2009, Boeing had delivered a total of 193 C-17s to
the U.S. Air Force. There are 19 C-17s in service
internationally the United Kingdoms Royal Air
Force has six (and signed a contract for a seventh
in late 2009), the Royal Australian Air Force has
four, the Canadian Force has four, a Strategic
Airlift Capability (SAC) consortium of NATO and
Partnership for Peace nations received three
C-17s in 2009, and two were delivered to the
Qatar Emiri Air Force in 2009. Boeing also
manages the C-17 Globemaster III Sustainment
Partnership, a performance-based logistics
program, through which it is responsible for all
C-17 sustainment activities, including material
management and depot maintenance support.
2009 deliveries: 16
C-32A Executive Transport The C-32A is a Boeing 757-200 specially con g-
ured for the U.S. Air Force to provide safe, reliable
worldwide airlift primarily for the vice president, rst
lady and members of the Cabinet and Congress.
Four C-32As currently are in service. Boeing has
upgraded the eet with an advanced communi-
cations suite and winglets to provide better fuel
ef ciency, and recently completed the auxiliary fuel
system that will enhance the aircrafts range and
performance.
C-40 Clipper
C-40A C-40B
C-40C
The C-40 aircraft are modi ed Boeing 737 and
Boeing Business Jets (BBJs) that provide airlift for
cargo, passengers, combatant commanders,
senior government leaders and distinguished
visitors worldwide. The U.S. Navy operates the
C-40A, which can be con gured for both passen-
gers and cargo or a combination of both. Boeing
is currently upgrading the U.S. Naval Reserves
nine aircraft with winglets to improve performance
and range. Boeing is also contracted to provide
the Navy with three more C-40As, scheduled for
delivery in 2010 and 2011. The C-40B and C-40C
are modi ed BBJs that have advanced communi-
cations systems, allowing users to send, receive
and monitor real-time communications worldwide.
Boeing is enhancing these aircraft with a defensive
system that detects, tracks and defeats incoming
infrared-seeking missiles. The U.S. Air Force oper-
ates four C-40Bs and six C-40Cs. Boeing is under
contract to deliver a seventh C-40C in 2011.
CH/MH-47 Chinook Boeing is modernizing the U.S. Armys eet of
CH/MH-47 Chinook helicopters and is also ex-
periencing an unprecedented international interest
in the CH-47. In 2009, Boeing received orders from
Canada for 15 CH-47s and Italy for 16 CH-47s,
and the United Kingdom announced its intent to
procure 22 aircraft. The new CH-47F and MH-47G
feature a variety of improvements, including an
advanced common architecture cockpit. Under
the modernization program, Chinooks will remain
in U.S. Army service through 2035 and achieve an
unprecedented service life of more than 75 years.
Boeing also provides performance-based logistics
sustainment services to the U.K.s Chinook eet.
This program has increased the eets ight hours
more than 30 percent and reduced depot turn-
around time by more than 50 percent.
2009 deliveries: 11 new, 24 remanufactured
Boeing Launch Services
Commercial Delta II Commercial Delta IV
Medium Medium Plus Heavy
Boeing continues to offer the Delta family of
launch vehicles to commercial customers
through launch services contracted with the
United Launch Alliance (ULA) . Commercial Delta
launches are conducted from ULAs launch
facilities at Cape Canaveral Air Force Station,
Florida, and at Vandenberg Air Force Base,
California. Delta rockets provide Boeings
commercial customers with a wide range of
payload capabilities and vehicle con guration
options to deliver missions reliably to virtually
any destination in space.
2009 launches: 1 successfulDelta II commercial
mission, 1 successfulDelta IV commercialmission
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Defense & Government Services (D&GS) D&GS, launched to sustain and expand Boeing
business and better serve customers in the
services sector, began operations in 2008. Its
market includes services for infrastructure
support, information, managed networks and
communications, and a broad array of other
services. D&GS focuses on services growth with a
competitive cost structure, a key step in Boeings
strategy to win new, innovative opportunities that
are nontraditional for Boeing.
E-4B The E-4B Advanced Airborne Command Post is
used by the National Command Authority as a
survivable command post for control of U.S. forces
in all con icts including nuclear war. In addition to
its primary mission, secondary missions include VIP
travel support and Federal Emergency Management
Agency support, providing communications to
relief efforts following natural disasters. The U.S.
Air Force awarded Boeing a ve-year contract to
support the E-4B in December 2005. The Boeing-
led industry team is focused on modernizing the
E-4B eet of aircraft with major communication up-
grades and providing contractor logistics support
to the eet at Offutt Air Force Base in Nebraska.
EA-18G Growler A variant of the U.S. Navy F/A-18F two-crew strike
ghter, the EA-18G combines the combat-proven
Block II Super Hornet with an enhanced version of
the Improved Capability III Airborne Electronic
Attack avionics suite. The EA-18G is the Navys
replacement for its current Airborne Electronics
Attack aircraft, the EA-6B Prowler. In September
2009, the EA-18G achieved Initial Operational
Capability, following its Operationally Effective
and Operationally Suitable rating during Initial
Operational Test and Evaluation. In November 2009,
the Growler was approved to advance into
Full-Rate Production by the U.S. Department of
Defense, allowing the program to proceed to
quantities of about 20 aircraft per year. At the end
of 2009, Boeing has delivered a total of 19 Growlers
to the U.S. Navy. The Navy currently plans to buy
88 Growlers.
2009 deliveries: 12
F/A-18E/F Super Hornet The combat-proven F/A-18E/F Super Hornet is
the cornerstone of U.S. naval aviation. Designed
to perform both ghter (air-to-air) and attack
(air-to-surface or strike) missions, the Super Hornet
provides the capability, exibility and performance
necessary to modernize the air or naval aviation
forces of any country. Boeing has delivered more
than 420 Super Hornets to the U.S. Navy all
on or ahead of schedule. Active Electronically
Scanned Array (AESA) radar-equipped Block II
Super Hornets are currently being delivered to eet
squadrons. In 2009, the rst international Super
Hornet customer, the Commonwealth of Australia,
accepted delivery of the rst of 24 F/A-18F Super
Hornets. Boeing is offering the F/A-18E/F Super
Hornet to a number of countries including India,
Japan, Greece, Brazil and Denmark. Boeing
provides support to the Navys Super Hornet eet
through a performance-based logistics program
that oversees supply chain management, in-service
engineering and integrated information systems.
2009 deliveries: 37
F-15E Strike Eagle The F-15E Strike Eagles unparalleled range,
payload and persistence make it the backbone of
the U.S. Air Force eet. The F-15E carries larger
payloads than other tactical ghters and retains
air-to-air superiority. Since entering operational
service, the F-15 has logged a perfect air combat
record, with more than 104 victories and no
losses. Five other nations y the F-15 Japan,
Israel, Saudi Arabia, the Republic of Korea and
the Republic of Singapore, which received the rst
of its 24 contracted F-15SGs in 2009. In 2009,
Boeing launched the F-15 Silent Eagle. Aimed at
current international F-15 operators, the F-15SE
offers greater mission exibility with options such
as internal or external weapons carriage, enhanced
survivability and enhanced situational awareness
via an advanced electronic warfare system coupled
to the AESA radar. Boeing also provides support
for domestic and international F-15 operators,
including technical data sustainment, eld services,
support and test equipment, training systems and
a wide range of supply chain services.
2009 deliveries: 13
F-22 Raptor The Raptor is designed to quickly establish air
dominance using its revolutionary combination
of stealth, super-cruise, advanced integrated
avionics and unmatched maneuverability. Boeing
produces the U.S. Air Forces F-22 Raptor in
partnership with Lockheed Martin and Pratt &
Whitney. Boeing is responsible for the aircrafts
wings, aft fuselage, mission software, radar,
power supplies, auxiliary mounted accessory
drive and auxiliary power-generation, arresting
gear, life support, re protection and pilot and
maintenance training systems. Boeing also
provides a third of the aircrafts support systems.
The program will produce 187 operational aircraft
with production ending in 2012. The program
will continue with a strong business base in
aircraft modernization and sustainment for the
life of the aircraft already in use.
2009 deliveries: 20
Cyber and Information Solutions Boeings operational experience in air, land, space,
sea and cyberspace enables the company to
provide synchronized, integrated and responsive
cyber solutions that focus on the needs of
customers who need to operate safely and
securely within their domain. Boeing integrates
real-time global situational awareness and defense
while providing a platform for full cyber operations
from identi cation to response. Boeings Security
Monitoring Infrastructure System (SMIS) detects
and reports network anomalies for broader
situational awareness. Boeing designs, integrates
and operates cyber defense systems for the
Department of Defense and other government
agencies, while protecting one of the worlds
largest virtual private networks its own.
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Family of Advanced Beyond Line-of-Sight
Terminals (FAB-T)
FAB-T is a key military program that enables users
to harness the power of information technology to
accelerate command-and-control decision support
with speed, security and precision. Boeing is under
contract with the U.S. Air Force to design and
develop a family of multimission-capable satellite
communications terminals to enable information
exchange among ground, air and space platforms.
In 2009, Boeing delivered the rst engineering
development models to the U.S. Air Force B-2
program to initiate platform integration and test
activities. Boeing also successfully conducted its
rst series of FAB-T ight tests. The tests were the
rst demonstration of FAB-Ts network-centric
ability to connect satellite, airborne and ground
assets in a realistic ight environment.
Global Positioning System (GPS) Since 1978, Boeing has delivered a total of 40 GPS
satellites to the U.S. Air Force and is under contract
to build 12 GPS Block IIF satellites, the next-
generation of GPS spacecraft that will deliver new
capabilities to the Air Force. Boeing will deliver the
rst IIF satellite in early 2010 to prepare for a
mid-2010 launch. In September 2009, Boeing
completed key ground tests on the space vehicle,
the ground-based control segment and user equip-
ment. Boeing also completed developmental system
testing on the GPS Operational Control Segment,
a ground system with improved security capabilities.
Global Services & Support Global Services & Support provides best-value
mission readiness to its customers through total
support solutions. The global business sustains
aircraft and systems with a full spectrum of
products and services, including aircraft mainte-
nance, modi cation and upgrades; supply chain
management; engineering and logistics support;
pilot and maintenance training; and other defense
and government services. Its advanced division
explores emerging markets and logical adjacencies
to bring service and support capabilities to new
markets such as tactical wheeled vehicle support.
Global Services & Supports international work has
major operations in Australia, the United Kingdom
and Saudi Arabia.
Ground-based Midcourse Defense (GMD)
GMD Interceptor SBX Radar
Boeing is the prime contractor for GMD, the
United States only operational defense against
long-range ballistic missiles. GMD has more than
20 interceptors deployed in underground silos at
Vandenberg Air Force Base, California, and Fort
Greely, Alaska. An integral element of the global
ballistic missile defense system, GMD also consists
of radars, including the Sea-based X-band radar,
other sensors, command-and-control facilities,
communications terminals and a 20,000-mile
ber-optic communications network. In December
2008, the GMD team successfully completed a
ight test that resulted in the intercept of a target
warhead. This end-to-end test of the GMD system
was the most realistic and comprehensive to date.
The test, GMDs eighth intercept overall, was the
third using an interceptor with the same design and
capabilities as those protecting the United States.
Harpoon Harpoon, the worlds most successful anti-ship
missile, features autonomous, all-weather, over-the-
horizon capability. Harpoon Block II can execute
both land-strike and anti-ship missions. The
226.8-kilogram (500-pound) blast warhead delivers
lethal repower against a wide variety of land-
based targets, including coastal defense sites,
surface-to-air missile sites, exposed aircraft, port
or industrial facilities and ships in port. Currently,
28 U.S.-allied armed forces deploy Harpoon
missiles; 11 have Block II capability. In 2009,
Boeing delivered the rst Harpoon Block II missiles
with an updated Guidance Control Unit that will
facilitate possible future missile enhancements.
2009 deliveries: 31
Intelsat Satellites Four Boeing-built 702B communications satellites
designated Intelsat 21, Intelsat 22 and two
spacecraft yet to be named will refresh and add
new telecommunications capacity to Intelsats
global satellite eet. These new satellites are the
rst in the Boeing 702B satellite series and will
distribute video, data and voice services from
Asia and Africa to the Americas and Europe. The
702B provides the high-capability features of the
ight-proven Boeing 702, but with a substantially
updated satellite bus structure and simpli ed
propulsion system. Intelsat 22 is scheduled to
launch in 2012. It will carry an Ultra-High
Frequency government-hosted payload to provide
service to the Australian Defence Force.
International Space Station (ISS) The rst two modules of ISS were launched and
joined in orbit in 1998. The station has been
inhabited continuously since the rst crew arrived
in November 2000. When completed in 2010, ISS
will weigh almost one million pounds and will have a
habitable volume of 425 cubic meters (15,000 cubic
feet), about the size of a ve-bedroom home. ISS
crews conduct research to support human explora-
tion of space and to take advantage of space as a
laboratory for scienti c, technological and commercial
research. Boeing is the prime contractor to NASA
for the ISS. In addition to designing and building
all the major U.S. elements, Boeing is also re-
sponsible for ensuring the successful integration
of any new hardware and software including
components from international partners and
providing sustaining engineering work for the ISS.
The ISS is the largest, most complex international
scienti c project in history.
Joint Direct Attack Munition (JDAM) JDAM guidance kits convert existing unguided
warheads into the most capable, cost-effective and
combat-proven air-to-surface weapons, revolution-
izing warfare. JDAM gives U.S. and allied forces
the capability to reliably defeat multiple high-value
targets in a single pass, in any weather, with
minimal risk to the aircraft. More than 210,000
JDAMs have been delivered. Laser JDAM provides
a modular laser sensor kit that is easily installed in
the eld to the front of existing JDAM weapons,
adding mission exibility to prosecute targets of
opportunity, including mobile targets.
2009 deliveries: 8,645
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KC-135 Boeing has been providing programmed depot
maintenance for the U.S. Air Forces KC-135
Stratotanker eet since 1998. These services include
KC-135 depot level inspections, repairs, mainte-
nance, modi cations and supply chain services.
The KC-135, in service since 1957, is used primarily
to refuel aircraft during ight. Modi ed KC-135s,
however, serve as ying command posts, providing
pure transport, electronic reconnaissance and photo
mapping.
KC-767 International Tanker The KC-767 International Tanker provides un-
rivaled tanker capability and operational exibility.
Technology advances include a fth-generation
boom, second-generation remote vision system,
new wing air refueling pods and hose drum unit,
and a digital cockpit. Leveraging thousands of
hours of ight testing, Boeing delivered the rst
two KC-767Js to Japan in 2008 and the nal two
aircraft in 2009. The company continues ight
test and certi cation activity for Italys KC-767A
program. Boeing is also establishing KC-767 sup-
port capability through the KC-767 Italian Tanker
performance-based logistics program, which
includes training, service engineering, eld service
representatives, aircraft maintenance, support
equipment, spares, repairs and warehousing.
2009 deliveries: 2
P-8A Poseidon The P-8A Poseidon is a military derivative of the
Boeing Next-Generation 737-800 designed to
replace the U.S. Navys eet of P-3C aircraft. The
P-8A will signi cantly improve the Navys anti-
submarine and anti-surface warfare capabilities, as
well as armed intelligence, surveillance and recon-
naissance. The Navy awarded Boeing a System
Development and Demonstration contract for the
aircraft in June 2004. As part of the initial contract,
Boeing built three ight-test and two ground-test
aircraft at its facility in Renton, Washington. In 2009,
an option for two additional test vehicles was
exercised, and one ight-test aircraft was later
added to the contract. The P-8Acompleted its rst
ight in April 2009, and Navy ight testing began in
October. The Navy anticipates achieving Initial
Operational Capability in 2013. Boeing also
supports the Navy by providing front-end analysis,
as well as ight and maintenance training devices
and coursework. In January 2009, the government
of India selected Boeing to provide eight India-
speci c P-8 variants (named P-8I), to meet its
long-range maritime reconnaissance and anti-
submarine warfare aircraft mission requirements.
Small Diameter Bomb (SDB) The SDB system is capable of delivering a
113.4-kilogram (250-pound) precision standoff
guided munition from a distance of 60 nautical
miles in all weather, day or night. In addition to the
munitions, the SDB system includes a four-place
smart pneumatic carriage system, accuracy sup-
port infrastructure, a mission-planning system and
a logistics system. Boeing successfully completed
development and operational testing of the SDB
on schedule, and the U.S. Air Force deployed the
system in September 2006. The Air Force ap-
proved SDB for full-rate production and awarded
Boeing an $80 million contract for the third produc-
tion lot in December 2006. The SDBs miniaturized
size allows each aircraft to carry more weapons
per sortie, and its precision accuracy and effective
warhead provide war planners with greater target
effectiveness and reduced collateral damage
around the target. SDB is deployed in combat on
the F-15E, and integration is expected on most
other U.S. Air Force delivery platforms, including
the F-22A Raptor and F-35 Joint Strike Fighter.
2009 deliveries: 2,246 weapons and 383 carriages
Space Shuttle The space shuttle is the worlds only operational,
reusable launch vehicle capable of supporting
human space ight mission requirements. Boeing
is a major subcontractor to NASAs space program
operations contractor, United Space Alliance. As
the original developer and manufacturer of the
space shuttle orbiter, Boeing is responsible for
orbiter engineering, major modi cation design, en-
gineering support to operations (including launch),
and overall shuttle systems and payload integration
services. NASA plans to retire the shuttle in 2010.
Standoff Land Attack Missile Expanded
Response (SLAM ER) Missile
The SLAM ER missile provides over-the-horizon,
precision strike capability for the U.S. Navy day
or night and in adverse weather conditions. It is
the only air-to-surface weapon that can engage
xed or moving targets on land and at sea.
SLAM ER extends the weapon systems combat
effectiveness, providing an effective, long-range,
precision-strike option for both preplanned and
target-of-opportunity missions against land and
ship targets. In 2009, SLAM ER was approved for
missions against land-based moving targets.
Joint Tactical Radio System Ground
Mobile Radios (JTRS GMR)
The JTRS GMR program is a joint service initiative
to develop software-programmable tactical radios
that will allow complete battlespace awareness
to provide secure wireless voice, data, video and
Internet-like capabilities for mobile forces. In 2009,
GMR engineering development models advanced
to formal testing. Boeing also supported the
government-run demonstrations of the Wideband
Networking Waveform on GMR radios and the
Early Infantry Brigade Combat Team Limited User
Test. These demonstrations used the GMRs to
connect soldiers and commanders as they traded
real-time information, providing greater situational
awareness. A decision on low-rate initial produc-
tion of the radio system is scheduled in 2011.
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T-45 Training System Boeing produced the two-seat T-45 Goshawk
as part of a fully integrated training system used
by the U.S. Navy to prepare pilots to operate the
eets carrier-based jets. The system includes ad-
vanced ight and instrument simulators, computer-
assisted classroom instruction and a computerized
tracking and record-keeping system. More than
3,500 U.S. Navy, Marine Corps and international
student naval aviators have earned their Wings
of Gold in the T-45A and C. The reliable, cost-
effective Goshawk has logged more than 900,000
ight hours since entering service in 1992. Boeing
completed its contract to produce 221 aircraft
in 2009. Boeing also plays a role on the T-45s
industry support team.
2009 deliveries: 7
Tracking and Data Relay Satellite
(TDRS) System
Boeing is building the newest TDRS spacecraft for
NASA under a contract awarded in 2007. TDRS-K
and TDRS-L will become part of the Tracking and
Data Relay Satellite System, which is the primary
source of voice, data and telemetry for the space
shuttle and the International Space Station.
TDRS also provides satellite communication and
science data relay services for low-Earth orbiting
spacecraft, including the Hubble Space Telescope.
The two new satellites are scheduled for launch in
2012 and 2013. Boeing built three of the previous-
generation spacecraft, designated TDRS-H, -I
and -J, which were launched in 2000 and 2002.
All three Boeing-built TDRS spacecraft are part of
an eight-satellite constellation in operation today,
providing vital services to NASA and the United
States space programs.
Training Systems & Services (TS&S) TS&S delivers comprehensive training systems,
support services and mission planning solutions
for Boeing Defense, Space & Security, as well as
for non-Boeing programs and systems. Award-
winning training solutions encompass software,
hardware, networked systems, and training
centers for customized programs that enable ight
students to train as they would ght in theater.
More than 1,000 on-site instructors, training
support specialists and courseware developers
train war ghters for maximum readiness.
United Launch Alliance Boeing and Lockheed Martin marked the third
anniversary of the United Launch Alliance joint
venture on Dec. 1, 2009. Using the combined
assets of the Boeing Delta and Lockheed Martin
Atlas launch vehicle programs (including mission
management, support, engineering, vehicle
production, test and launch operations and
people), ULAs primary mission is to provide
satellite launch services to the U.S. government.
The joint venture also launches commercial
missions on behalf of Boeing Launch Services.
V-22 Osprey Produced jointly by Boeing and Bell Helicopter, a
Textron Company, the V-22 Osprey combines the
speed and range of a xed-wing aircraft with the
vertical ight performance of a helicopter. In 2008,
Boeing received a $10.4 billion multiyear contract
for 167 aircraft (141 MV-22s for the U.S. Marine
Corps and 26 CV-22s for the Air Force Special
Operations Command) over ve years. A later
contract modi cation added ve CV-22 Osprey
aircraft for Air Force Special Operations Command,
increasing the ve-year multiyear procurement from
167 to 172. The Marine Corps has stood up seven
MV-22 combat squadrons and deployed Ospreys
to Afghanistan for the rst time in early November
2009. In May 2009, the MV-22 sailed with the
22nd Marine Expeditionary Unit, marking the
inaugural ship-based deployment of the aircraft.
The CV-22 reached its Initial Operational Capability
milestone in March 2009 when the U.S. Air Force
determined that the aircraft had met all of the op-
erational requirements and declared it t for duty.
2009 deliveries: 16
Wideband Global SATCOM (WGS) Boeing is under contract to build six WGS satel-
lites for the U.S. Air Force. As the Department of
Defenses highest-capacity military communica-
tions satellite system, WGS addresses the militarys
need for high data-rate communications. Two
WGS satellites were successfully launched in
2009, bringing the number of WGS satellites
now on orbit to three. The next three WGS satel-
lites, set for launch in 2011 and 2012, include
enhancements that provide additional bandwidth
required by airborne intelligence, surveillance and
reconnaissance platforms.
Boeing Capital Corporation Michael J. Cave, President, Renton, Washington, USA
Boeing Capital is a global provider of nancial
solutions. Drawing on its comprehensive expertise,
Boeing Capital arranges, structures and, where
appropriate, provides innovative nancing solutions
for commercial and government customers around
the world. Working with Boeings business units,
Boeing Capital is committed to helping customers
obtain ef cient nancing for Boeing products and
services. To ensure adequate availability of capital
funding, Boeing Capital is leading efforts to
improve the international nancing infrastructure
and engaging nanciers in a comprehensive
investor-outreach program. With four decades
of experience in structured nancing, leasing,
complex restructuring and trading, Boeing
Capitals team brings opportunity and value to
its nancial partners. Boeing Capital owns or has
interest in approximately 320 airplanes as part of
its $5.7 billion portfolio.
NLRB-FOIA-00005946
Board of Directors
146
Company Of cers
John H. Biggs, 73
Former Chairman, President and
Chief Executive Of cer, Teachers
Insurance and Annuity AssociationCollege
Retirement Equities Fund (TIAA-CREF)
(national teachers pension fund)
Boeing director since 1997
Committees: Audit (Chair); Finance
John E. Bryson, 66
Senior Advisor, Kohlberg Kravis Roberts & Co.
(KKR); retired Chairman of the Board and
Chief Executive Of cer, Edison International
(electric power generator and distributor)
Committees: Compensation (Chair);
Governance, Organization and Nominating
David L. Calhoun, 52
Chairman of the Executive Board and Chief
Executive Of cer of The Nielsen Company
(marketing and media information)
Committees: Audit; Finance
Arthur D. Collins, Jr., 62
Senior Advisor, Oak Hill Capital Partners,
Retired Chairman of the Board, Medtronic, Inc.
(medical device and technology)
Committees: Audit; Finance (Chair)
Linda Z. Cook, 51
Retired Executive Director of
Royal Dutch Shell plc.
(oil, gas and petroleum)
William M. Daley, 61
Vice Chairman and Head of the Of ce
of Corporate Responsibility and
Chairman of the Midwest Region
for JPMorgan Chase & Co.
(banking and nancial services)
Committees: Finance; SpecialPrograms
Kenneth M. Duberstein, 65
Chairman and Chief Executive Of cer,
The Duberstein Group
(consulting rm)
Boeing Lead Director since 2005
Committees: Compensation; Governance,
Organization and Nominating (Chair)
Edmund P. Giambastiani, Jr., 61
Retired U.S. Navy Admiral,
Seventh Vice Chairman
of the U.S. Joint Chiefs of Staff, and
former NATO Supreme Allied Commander
Transformation and Commander,
U.S. Joint Forces Command
Committees: Audit; Finance; Special Programs
John F. McDonnell, 71
Retired Chairman,
McDonnell Douglas Corporation
(aerospace)
Organization and Nominating
W. James McNerney, Jr., 60
Chief Executive Of cer,
The Boeing Company
Committee: Special Programs (Chair)
Susan C. Schwab, 54
Professor, University of Maryland
School of Public Policy; former
United States Trade Representative
Mike S. Zarovski, 56
Former Director, President and
Chief Executive Of cer,
Nortel Networks Corporation
(telecommunications)
Organization and Nominating
James F. Albaugh
Executive Vice President, President
and Chief Executive Of cer,
James A. Bell
President and Chief Financial Of cer
Wanda K. Denson-Low
Senior Vice President,
Of ce of Internal Governance
David A. Dohnalek*
Vice President,
Finance and Treasurer
Thomas J. Downey
Communications
Shephard W. Hill
President, Boeing International
Business Development and Strategy
Timothy J. Keating
Government Operations
Michael F. Lohr*
Vice President, Corporate Secretary
and Assistant General Counsel
J. Michael Luttig
Executive Vice President and
General Counsel
Chief Executive Of cer
Dennis A. Muilenburg
Executive Vice President,
President and Chief Executive Of cer,
Gregory D. Smith*
Vice President, Finance and
Corporate Controller
Richard D. Stephens
Human Resources and Administration
John J. Tracy
Senior Vice President, Engineering,
Operations and Technology, and
Chief Technology Of cer
*Appointed Of cer
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The Boeing Company
100 North Riverside Plaza
Chicago, IL 60606-1596
U.S.A.
312-544-2000
Transfer Agent, Registrar, Dividend
Paying Agent and Plan Administrator
The transfer agent is responsible for share-
holder records, issuance of stock, distribution
of dividends and IRS Form 1099. Requests
concerning these or other related shareholder
matters are most ef ciently answered by con-
tacting Computershare Trust Company, N.A.
Computershare
P.O. Box 43078
Providence, RI 02940-3078
U.S.A.
888-777-0923
(toll-free for domestic U.S. callers)
781-575-3400
(non-U.S. callers may call collect)
Boeing registered shareholders can also
obtain answers to frequently asked questions
on such topics as transfer instructions, the
replacement of lost certi cates, consolidation
of accounts and book entry shares through
Computershares home page on the Internet
at www.computershare.com/investor.
Registered shareholders also have secure
Internet access to their own accounts through
Computershares home page (see above Web
site address). They can view their account
history, change their address, certify their tax
identi cation number, replace checks, request
duplicate statements, consent to receive their
proxy voting materials and other shareholder
communications electronically, make additional
investments and download a variety of forms
related to stock transactions. If you are a reg-
istered shareholder and want Internet access
and either need a password or have lost your
password, please click on Computershares
Internet home page (see above Web site
address) and, as appropriate, either click on
Login or Forgotten Password? or Create
Login on the left panel of the page.
Shareholder Information
Duplicate Shareholder Accounts
Registered shareholders with duplicate accounts
may contact Computershare for instructions
regarding the consolidation of those accounts.
The Company recommends that registered
shareholders always use the same form of their
names in all stock transactions to be handled
in the same account. Registered shareholders
may also ask Computershare to eliminate
excess mailings of annual reports going to
shareholders in the same household.
Change of Address
ForBoeing registered shareholders:
Call Computershare at
888-777-0923,
or log onto your account at
www.computershare.com/investor
or write to Computershare
P.O. Box 43078
Providence, RI 02940-3078
U.S.A.
ForBoeing benecialowners:
Contact your brokerage rm or bank to
give notice of your change of address.
Annual Meeting
The annual meeting of Boeing share-
holders is scheduled to be held on Monday,
April 26, 2010. Details are provided in the
proxy statement.
Written Inquiries May Be Sent To:
ShareholderServices
The Boeing Company
Mail Code 5003-1001
U.S.A.
InvestorRelations
The Boeing Company
Mail Code 5003-2001
U.S.A.
Company Shareholder Services
Prerecorded shareholder information is
available toll-free from Boeing Shareholder
Services at 800-457-7723. You may also
speak to a Boeing Shareholder Services
representative at 312-544-2660 between
8:00 a.m. and 4:30 p.m. U.S. Central Time.
To Request an Annual Report,
Proxy Statement, Form 10-K or
Form 10-Q, Contact:
MailServices
The Boeing Company
Mail Code 3T-06
P.O. Box 3707
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or call 425-965-4408 or 800-457-7723
You may also view electronic versions of the
annual report, proxy statement, Form 10-K or
Form 10-Q at www.boeing.com.
Boeing on the Internet
The Boeing home page at www.boeing.com
is your entry point for viewing the latest
Company information.
Stock Exchanges
The Companys common stock is traded
principally on the New York Stock Exchange;
the trading symbol is BA. As of February 26,
2010, Boeing had approximately 894,600
registered and bene cial shareholders.
Independent Auditors
Deloitte & Touche LLP
111 South Wacker Drive
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312-486-1000
Equal Opportunity Employer
Boeing is an equal opportunity employer
and seeks to attract and retain the best-
quali ed people regardless of race, color,
religion, national origin, gender, sexual
orientation, age, disability or status as a
disabled or Vietnam Era Veteran.
The Boeing Company Annual Report was printed with 100-percent certi ed wind-powered energy on
Forestry Stewardship Council certi ed paper that contains at least 10 percent post-consumer waste. P
r
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n
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e
d

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n

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S
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A
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The Boeing Company
U.S.A.
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Microsoft Outlook
From: Siegel, Richard A.
To: Siegel, Richard A.
Subject: 5/25/11 BNA Boeing Art.
Attachments: image001.gif; image002.gif; image003.gif
NLRB
disappointed that the National Labor Relations Board's acting general counsel has resisted their request for
internal documents concerning a highly publicized unfair labor practice complaint against Boeing Co.
Writing to the chairmen May 19 on behalf of Acting General Counsel Lafe E. Solomon, Celeste J. Mattina, the
NLRB's acting deputy general counsel, provided a two-page chronology of the agency's consideration of the
case.
But she told Kline and Roe that their extensive May 5 request for internal documents and research was the
first this Agency has ever received from a Committee of the House of Representatives with jurisdiction over the
Agency seeking documents within litigation files of an open enforcement action.
Writing that prematurely disclosing the acting general counsel's strategic plans could compromise the Boeing
litigation and result in an unfair advantage to one litigant over another, NLRB failed to produce the
documents Kline and Roe requested. However, the agency offered to meet with the chairmen to discuss further
information needs that you may have.
In the May 24 statement, Kline said that NLRB is not exempt from congressional oversight or public scrutiny.
But he added the general counsel's office has offered to discuss our request further, and we intend to take them
up on their offer.
Document Dispute Relates to Boeing Litigation
According to the NLRB complaint and a fact sheetissued by the acting general counsel, the International
Association of Machinists has represented Boeing production and maintenance employees in the Puget Sound
area of Washington, and in Portland, Ore., in two bargaining units that have been covered by a series of
collective bargaining agreements with the union
The company, which has a backlog of orders for its new 787 Dreamliner, announced in October 2009 that it
would build a second assembly line in North Charleston, S.C., rather than in the Puget Sound area (207 DLR A-
7, 10/29/09). The company said it planned to produce three Dreamliners per month in South Carolina in
addition to seven per month at the Puget Sound facility.
IAM filed an unfair labor practice charge over the Boeing announcement, and on April 20, NLRB's Seattle
regional director, Richard Ahearn, issued a complaint, authorized by Solomon, that alleges that the company's
actions violated National Labor Relations Act Section 8(a)(1), which prohibits an employer from interfering
with, restraining, or coercing employees in their exercise of rights under the federal labor law, and Section
8(a)(3), which makes it an unfair labor practice for an employer by discrimination in regard to hire or tenure of
employment or any term or condition of employment to encourage or discourage membership in any labor
organization.
The case, which has provoked public criticism and calls for legislative action (95 DLR C-1, 5/17/11) is
scheduled for a hearing before an administrative law judge in Seattle beginning on June 14.
Chairmen Requested NLRB Explanation, Documents
In their May 5 letter to Solomon, Kline and Roe acknowledged that the facts of case against Boeing are still in
dispute, but they expressed concern that the case could have significant consequences for job-creators and
workers.
NLRB-FOIA-00005997
2
Kline and Roe observed that the NLRB complaint references alleged statements made by Boeing officials
between October 2009 and March 2010 that work stoppages were one reason for choosing the new location.
But they observed that in June 2010, Ahearn was quoted by the Seattle Times as saying it would have been an
easier case for the union to argue if Boeing had moved existing work from Everett[, Wash.], rather than placing
new work in Charleston.
The chairmen said that 10 months after the newspaper interview, Ahearn signed the unfair labor practice
complaint against Boeing, which Solomon has said he authorized. Kline and Roe said [t]he pivot in position by
NLRB officials, as well as the unusual timing, raises serious concerns that warrant congressional inquiry.
They asked Solomon to provide by May 19 a description of what transpired between June 2010 and April 2011
that led the NLRB to alter its opinion in this matter, as well as all documents and communications between the
NLRB regional and national offices concerning the case. The House panel also asked for all documentation that
supports the NLRB view that work is being transferred' in this case, as well as [p]ast precedent that supports
a finding that Boeing violated sections 8(a)(3) and 8(a)(1) of the NLRA when it decided to locate, not transfer, a
second assembly line.
NLRB Official Explains Remarks, Chronology
Mattina responded at length in her May 19 letter concerning Ahearn's remarks and the chairmen's inquiry about
the timing of the eventual complaint against Boeing.
According to the NLRB letter, the charge filed by IAM District Lodge 751 in Seattle on March 26, 2010, was
investigated by the NLRB regional office until Aug. 31, 2010, when Ahearn submitted the case to NLRB's
Division of Advice in Washington, D.C. Such a submission was consistent with the agency's established
practice in cases of national significance, Mattina wrote.
Solomon recognized the significance of the case to the company and the union, Mattina said, and the acting
general counsel issued an Oct. 19, 2010, invitation for Boeing to make an oral presentation of its case in
Solomon's Washington, D.C., office. Boeing made its presentation on Dec. 15, 2010, and the union made an
oral presentation on Jan. 19, followed by a written statement of position.
According to NLRB, Solomon encouraged the company and the union to settle the dispute, and Ahearn signed
and issued the complaint on behalf of the acting general counsel on April 20 only after settlement efforts failed.
Mattina wrote that discrimination cases under Section 8(a)(3) of the NLRA involve shifting burdens and require
a careful and balanced assessment of whether protected conduct of employees was a motivating factor in the
employer's decision and whether the employer can affirmatively introduce evidence to demonstrate that the
challenged action would have taken place regardless of the employees' protected activity.
Ahearn's remarks merely reflect an appropriate appreciation of the delicate balancing and careful scrutiny of
often conflicting evidence, Mattina said. She added that while Ahearn had predicted in June 2010 that an
initial ruling in the case was weeks away, the delay in issuance of a complaint until April 2011 was the
result of Solomon's giving the parties additional time to argue their positions and to explore possible settlement
before advancing the case by issuing a complaint.
Official Describes Objections to Document Disclosure
Addressing the chairmen's request for internal documents reflecting NLRB discussions and consideration of the
case, and supporting documents and research, Mattina described several concerns.
Stating that NLRB litigation files typically contain affidavits taken from witnesses who have been promised
confidentiality, Mattina also said the files contain the privileged work product of our attorneys and road maps'
of our litigation plans and preparations.
In NLRB v. Robbins Tire & Rubber Co., 437 U.S. 214, 98 LRRM 2617 (1978), the U.S. Supreme Court
upheld NLRB's policy of withholding witness affidavits in open cases from disclosures made under the
Freedom of Information Act, and Mattina said the high court recognized the importance of protecting the
NLRB's assurances of confidentiality.
The House chairmen also asked Solomon to produce all documents and communications that support the
NLRB's position that work is being transferred' in this case, as well as past precedent that would support a
finding Boeing violated the NLRA.
Mattina said that we are not in a position to address the issues to be litigated in the public hearing outside
the context of that hearing. Stating that the information Kline and Roe requested goes to the crux of those
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issues, Mattina said that the acting general counsel has already disclosed the basic facts and legal theory in
the complaint against Boeing as well as in press releases and a fact sheet posted on NLRB's website.
Once the hearing commences, Mattina said, NLRB could provide the House committee with copies of the
transcript and exhibits and post-hearing briefs of the parties.
Mattina concluded that NLRB representatives would be pleased to meet with Kline and Roe to discuss how
we might accommodate further information needs that you may have, consistent with our need to protect the
integrity of our legal processes.
Kline, Roe Call Response Insufficient.'
In the joint statement by the committee leaders, Kline said, While this insufficient response is not entirely
unexpected from today's board, it is still extremely disappointing. Stating that there are legitimate questions
over public statements made by NLRB officials and the timing of its complaint, the House committee
chairman said that [t]he American people deserve a full explanation and Congress has a right to a complete
response.
Roe said that NLRB's troubling allegations against Boeing warrant further investigation, and said that the
extreme remedy sought by the acting general counsel will have a detrimental effect on local economies and a
chilling effect on the American workforce. Stating that he is very concerned about NLRB action in the
Boeing case, Roe said he will be exploring these allegations further.
Kline charged that [f]or more than two years, the Obama board has pursued an activist agenda that champions
the interests of Big Labor over the interests of all American workers.
Republicans have pledged to make job creation a leading priority, Kline said, and our oversight of the NLRB
will remain an important part of that effort.
By Lawrence E. Dub
Text of the Kline and Roe statements may be accessed at http://op.bna.com/dlrcases.nsf/r?Open=ldue-8h6s97. Text
of the acting deputy general counsel's letter may be accessed at http://op.bna.com/dlrcases.nsf/r?Open=ldue-
8h6sdn.
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Microsoft Outlook
From: Contee, Ernestine R.
FYI.
To: Contee, Ernestine R.; Kearney, Barry J.; Farrell, Ellen; Sophir, Jayme; Szapiro, Miriam; Katz, Judy; Omberg, Bob;
Ahearn, Richard L.
To: Willen, Debra L
Cc: David Campbell
Ms. Willen,
next week.
Sincerely,
Seattle, WA 98119
206-285-2828
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Microsoft Outlook
Subject: Fw: Judge Luttig
I can call after I'm done or we can talk early tommorow.
--------------------------
From: Kilberg P.C., William <WKilberg@gibsondunn.com>
Sent: Mon Mar 14 15:33:29 2011
Subject: Judge Luttig
Barry: I just left you a voicemail to this effect. Judge Luttig would like to talk with Lafe by
telephone before Lafe does anything, preferably late this week. Can this be arranged?
Thanks. Bill
William J. Kilberg
GIBSON DUNN
Gibson, Dunn & Crutcher LLP
1050 Connecticut Avenue, N.W., Washington, DC 20036-5306
Tel +1 202.955.8573 Fax +1 202.530.9559
WKilberg@gibsondunn.com www.gibsondunn.com
NLRB-FOIA-00006004
1
Microsoft Outlook
Subject: RE: Judge Luttig
We can talk tomorrow.
Subject: Fw: Judge Luttig
I can call after I'm done or we can talk early tommorow.
--------------------------
From: Kilberg P.C., William <WKilberg@gibsondunn.com>
Sent: Mon Mar 14 15:33:29 2011
Subject: Judge Luttig
Barry: I just left you a voicemail to this effect. Judge Luttig would like to talk with Lafe by
telephone before Lafe does anything, preferably late this week. Can this be arranged?
Thanks. Bill
William J. Kilberg
GIBSON DUNN
Gibson, Dunn & Crutcher LLP
1050 Connecticut Avenue, N.W., Washington, DC 20036-5306
Tel +1 202.955.8573 Fax +1 202.530.9559
WKilberg@gibsondunn.com www.gibsondunn.com
Exemption 6 Privacy
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Microsoft Outlook
Sent: Wednesday, April 20, 2011 11:08 AM
To: Solomon, Lafe E.; Mattina, Celeste J.; Cleeland, Nancy; Kearney, Barry J.; Farrell, Ellen
Subject: Boeing
I have spoken with the attorneys for both parties; we will be ready to e mail complaint at about noon your time. Will blind
copy each of you.
Rich
Richard L Ahearn
Regional Director, Region 19, Seattle
206 220 6310
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Microsoft Outlook
To: Solomon, Lafe E.; Ahearn, Richard L.; Mattina, Celeste J.
Cc: Wagner, Anthony R.
Subject: now bloomberg is calling
I think its time
Nancy Cleeland
(202) 273-0222
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1
Microsoft Outlook
To: Cleeland, Nancy; Solomon, Lafe E.; Ahearn, Richard L.; Mattina, Celeste J.
Subject: RE: now bloomberg is calling
Seattle PI:
http://www.seattlepi.com/business/article/Boeing-illegally-put-second-787-line-in-S-C-1345345.php
I think its time
Nancy Cleeland
(202) 273-0222
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1
Microsoft Outlook
From: Nancy Cleeland ]
To: Liebman, Wilma B.; Solomon, Lafe E.
Subject: csm story
Impressive job from the Christian Science Monitor. Shows the difference a good reporter and an investment in
time can make.
http://www.csmonitor.com/USA/Politics/2011/0510/Boeing-s-South-Carolina-move-Illegal-union-bashing-or-
just-good-business
Exemption 6
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Microsoft Outlook
April 26).
Dorian Warren
and Public Affairs
Columbia University
New York
Nancy Cleeland
(202) 273-0222
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Microsoft Outlook
From: McDermott, James J.
Sent: Thursday, May 12, 2011 11:37 AM
To: Baniszewski, Joseph
Cc: Solomon, Lafe E.
Subject: FW: You have been sent 1 image(s)
Attachments: scan0001.jpg
A good friend of mine in South Carolina sent this along. He's from Massachusetts but winters
there.
Make sure you read the cannonball.
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Microsoft Outlook
From: Dowling, Kate [Dowling@nmb.gov]
Subject: RE:
Sent from my HTC smartphone
From: Solomon, Lafe E. <Lafe.Solomon@nlrb.gov>
To: Dowling, Kate <Dowling@nmb.gov>
Subject: Re:
I don't know what anyone wants me to talk about, but my guess is that I will talk about
Boeing and
Sent from my mobile
On May 11, 2011, at 1:21 PM, "Dowling, Kate" <Dowling@nmb.gov> wrote:
> So my boss is on a panel with you at the LERA Forum on 6/7 and he wants to know what you
are going to talk about.
Non-Responsive
Non-Responsive
Non-Responsive
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Microsoft Outlook
To: Solomon, Lafe E.; Liebman, Wilma B.
Subject: FW: TUESDAY: Insider briefing on NLRB & how to push back on attacks
fyi
Nancy Cleeland
(202) 273-0222
From: American Rights at Work [mailto:action@americanrightsatwork.org]
To: Cleeland, Nancy
Subject: TUESDAY: Insider briefing on NLRB & how to push back on attacks
For 75 years, the National Labor Relations Board (NLRB), an independent federal agency charged with
ensuring that unions and employers play by the rules, has investigated claims of unfair retaliation in the
workplace. The agency has been coming under increased attack and scrutiny by corporations and
politicians that do not want the agency to do its job of protecting workers rights.
Most recently, the NLRB's statutorily authorized decision to issue a complaint against Boeing for a
potential violation of workers exercising their rights has caused right-wing hyperventilation, political
theater, and numerous mistruths.
Please join us for an informal phone briefing to learn about the NLRB, the true facts of the
Boeing case, and what labor and progressive allies can do to push back.
What: Phone briefing for labor & progressive ally communicators on NLRB
When: Tuesday, May 17 11:30am EST
Who: AFL-CIO, American Rights at Work, IAM
RSVP: Email lcattaneo@americanrightsatwork.org to receive dial-in information.
We hope you can join us! In the meantime, we hope you find our core talking points below useful:
The recent complaint issued by the National Labor Relations Boardalleging that Boeing unlawfully
retaliated against its employees when it decided to move production away from its Washington state
facilityhas generated coordinated and focused attacks from Republicans and corporate interests.
CORE POINTS:
No company is above the law. Working people play by the rules, and so should businesses. But
corporate lobbyists and Republicans in Congress are attacking the National Labor Relations Boarda
neutral, independent agencyfor asking Boeing to play by the rules. The fact is that retaliating against
workersas Boeings own statements indicate it may haveis against the law, and the agency had no
choice but to investigate. So lets be clear: The right-wing attacks on the NLRB have nothing to do with
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the facts of the case or the economy, and everything to do with politics.
OTHER POINTS:
This uproar is politically motivatedits about politics, not the economy. Remember, the
politicians and corporate lobbyists attacking this complaint are the same crowd who want to defund the
NLRB and dismantle any protections for workers. Whats more, the complaint is only the first step of a
legal process designed to determine whether the law has been violated, and Boeing will have its
chance to make its case in court. The right-wing outrage is just an excuse to play politics and further
the ongoing attack on an agency designed to protect workers.
Republicans in Congress are playing the same old political games Americans are tired of. They
were elected to fight for an economic recovery that creates jobs and works for all of us. Instead, they're
doing the work of corporate CEOs and lobbyists who are rigging the system to help themselves not
working families. It's time for Congress to do what they were elected to do: Address the real problems
facing the middle class and stand up for everyday Americans.
The NLRB is a neutral arbiter of workers issues and is just doing its job. The very mission of the
NLRB is to enforce the National Labor Relations Act of 1935, a law that governs private sector workers
right to unionize as well as relations between companies and employees. Thats not a partisan mission,
but one that has been endorsed by Presidents and Members of Congress on both sides of the aisle
since its inception. The General Counsel of the NLRB, Lafe Solomon, has served the Board for 29
years, working with both parties. His job as a professional investigator and prosecutor is to interpret
and enforce the law. The decision to bring the complaint was based on the facts in the case and
interpretation of decades of precedent under the NLRA.
On Boeing: Retaliating against workers for exercising their protected rights is against the law.
Boeing repeatedly told its employees and the media that it was moving production away from its
Washington state facility in response to workers there exercising their freedom to protect their voice
and union. The fact is, retaliating against workers for exercising their protected rights is against the law,
and Boeings own comments suggest that it may have done. This isnt about South Carolinaits illegal
everywhere.
This message was sent to nancy.cleeland@nlrb.gov. You can unsubscribe from American Rights at Work emails by going here.
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Microsoft Outlook
Subject: FW: Committee Republicans Demand NLRB Cease Job-Destroying Bureaucratic Activism
They wont stop!
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Subject: Committee Republicans Demand NLRB Cease Job-Destroying Bureaucratic Activism
May 13, 2011
(202) 226-9440
Committee Republicans Demand NLRB Cease
Job-Destroying Bureaucratic Activism
WASHINGTON, D.C. --- Today, Republican Members of the House Education and the Workforce
Committee demanded the National Labor Relations Board (NLRB) end its job-destroying activist
agenda. In a letter to NLRB Acting General Counsel Lafe Solomon, members describe a number of
actions by the Obama labor board that call into question the objectivity and credibility of the office,
including the NLRBs most recent effort to force The Boeing Company to relocate a South Carolina
assembly line to Washington.
As the Republican members note, Taken together, your actions threaten future economic growth and
job creation and reflect an unsavory culture of union favoritism. We demand you cease your
bureaucratic activism immediately and restore the objectivity that is essential to the effectiveness and
credibility of the General Counsels office.
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Education and the Workforce Republican signees include:
Rep. Joe Wilson (R-SC)
Rep. Virginia Foxx (R-NC)
Rep. Duncan D. Hunter (R-CA)
Rep. Tim Walberg (R-MI)
Rep. Todd Rokita (R-IN)
Rep. Trey Gowdy (R-SC)
Rep. Kristi Noem (R-SD)
Rep. Martha Roby (R-AL)
Rep. Dennis Ross (R-FL)
Rep. Mike Kelly (R-PA)
To read the letter, click here.
###
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Microsoft Outlook
Attachments: lafe questions.docx
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
NLRB-FOIA-00006018
Lafe Solomon questions:
1. Marshall Babson was saying that, with your skill and
expertise, you could easily have done more lucrative or higher
profile legal career choices. What has drawn you to the NLRB?
What about the agency has kept you there for so long?
2. What are the harder parts of the job? The best?
3. What hobbies or interests do you have outside of the NLRB? I
hear you're a gourmet chef who started your own catering
service, for example, well known for your home-made King's
Cakes..what kind of music do you like? Books? Travel
destinations?
4. Obviously you have assumed the role of AGC at a time when
there are a lot of key, and controversial, issues suddenly
coming up -- social media issues, employee rights, Boeing. If
you can share, how do you deal with being in the hot seat these
days? What keeps you focused in this very partisan environment?
5. What would YOU like people to know about yourself?
6. You started out in a regional office and then decided to go
to law school. Why? What piqued your interest?
7. How has the board changed or evolved since you first came
aboard?
8. Why do you think the NLRB has come so under attack in the
past year from Republicans? (if you feel comfortable commenting
on it).
9. What are you most proud of?
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Microsoft Outlook
To: Cleeland, Nancy
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
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1
Microsoft Outlook
Sure
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
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1
Microsoft Outlook
To: Mattina, Celeste J.; Solomon, Lafe E.
Actually, our call is at 2 so we should be available at 3.
Sure
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Nancy Cleeland
NLRB-FOIA-00006022
2
(202) 273-0222
To: Cleeland, Nancy
NLRB-FOIA-00006023
1
Microsoft Outlook
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
NLRB-FOIA-00006024
1
Microsoft Outlook
To: Cleeland, Nancy
Subject: Re: Fwd:Re:Lafe questions
That's good.
--------------------------
Sent: Wed May 25 14:38:01 2011
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
NLRB-FOIA-00006025
2
NLRB-FOIA-00006026
1
Microsoft Outlook
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Cc: Kathy Lohr
Hi Nancy,
Thanks,
Kathy Lohr
To: Kathy Lohr
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Cc: Kathy Lohr
Hi Nancy,
NLRB-FOIA-00006027
2
Thanks,
Kathy
Kathy Lohr
NPR Correspondent
Office 770-640-3878
Cell 404-771-8916
To: Kathy Lohr
Hi Kathy,
NLRB-FOIA-00006028
3
Nancy Cleeland
(202) 273-0222
NLRB-FOIA-00006029
1
Microsoft Outlook
To: Cleeland, Nancy
--------------------------
Sent: Wed Jun 01 15:44:29 2011
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Cc: Kathy Lohr
Hi Nancy,
Thanks,
Kathy Lohr
To: Kathy Lohr
Nancy Cleeland
(202) 273-0222
NLRB-FOIA-00006030
2
To: Cleeland, Nancy
Cc: Kathy Lohr
Hi Nancy,
Thanks,
Kathy
Kathy Lohr
NPR Correspondent
Office 770-640-3878
Cell 404-771-8916
To: Kathy Lohr
Hi Kathy,
NLRB-FOIA-00006031
3
Nancy Cleeland
(202) 273-0222
NLRB-FOIA-00006032
1
Microsoft Outlook
OK, thats right, I forgot. Good luck.
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
--------------------------
Sent: Wed Jun 01 15:44:29 2011
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Cc: Kathy Lohr
Hi Nancy,
Thanks,
Kathy Lohr
NLRB-FOIA-00006033
2
To: Kathy Lohr
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Cc: Kathy Lohr
Hi Nancy,
Thanks,
Kathy
Kathy Lohr
NPR Correspondent
Office 770-640-3878
Cell 404-771-8916
To: Kathy Lohr
Hi Kathy,
NLRB-FOIA-00006034
3
Nancy Cleeland
(202) 273-0222
NLRB-FOIA-00006035
1
Microsoft Outlook
Right to Work Laws
fyi
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Laws
Thanks
(703) 770-
3364
strictly voluntary.
NLRB-FOIA-00006036
2
case is pending.
NLRB-FOIA-00006037
NLRB-FOIA-00006038
NLRB-FOIA-00006039
NLRB-FOIA-00006040
NLRB-FOIA-00006041
NLRB-FOIA-00006042
NLRB-FOIA-00006043
NLRB-FOIA-00006044
NLRB-FOIA-00006045
NLRB-FOIA-00006046
NLRB-FOIA-00006047
NLRB-FOIA-00006048
NLRB-FOIA-00006049
NLRB-FOIA-00006050
NLRB-FOIA-00006051
NLRB-FOIA-00006052
NLRB-FOIA-00006053
NLRB-FOIA-00006054
NLRB-FOIA-00006055
NLRB-FOIA-00006056
NLRB-FOIA-00006057
NLRB-FOIA-00006058
NLRB-FOIA-00006059
NLRB-FOIA-00006060
NLRB-FOIA-00006061
NLRB-FOIA-00006062
NLRB-FOIA-00006063
NLRB-FOIA-00006064
NLRB-FOIA-00006065
NLRB-FOIA-00006066
NLRB-FOIA-00006067
NLRB-FOIA-00006068
NLRB-FOIA-00006069
NLRB-FOIA-00006070
NLRB-FOIA-00006071
NLRB-FOIA-00006072
NLRB-FOIA-00006073
NLRB-FOIA-00006074
NLRB-FOIA-00006075
1
Microsoft Outlook
To: Solomon, Lafe E.; Kearney, Barry J.; Ahearn, Richard L.
Right to Work Laws
Laws
fyi
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Laws
Thanks
(703) 770-
3364
NLRB-FOIA-00006076
2
strictly voluntary.
case is pending.
NLRB-FOIA-00006077
NLRB-FOIA-00006078
NLRB-FOIA-00006079
NLRB-FOIA-00006080
NLRB-FOIA-00006081
NLRB-FOIA-00006082
NLRB-FOIA-00006083
NLRB-FOIA-00006084
NLRB-FOIA-00006085
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NLRB-FOIA-00006090
NLRB-FOIA-00006091
NLRB-FOIA-00006092
NLRB-FOIA-00006093
NLRB-FOIA-00006094
NLRB-FOIA-00006095
NLRB-FOIA-00006096
NLRB-FOIA-00006097
NLRB-FOIA-00006098
NLRB-FOIA-00006099
NLRB-FOIA-00006100
NLRB-FOIA-00006101
NLRB-FOIA-00006102
NLRB-FOIA-00006103
NLRB-FOIA-00006104
NLRB-FOIA-00006105
NLRB-FOIA-00006106
NLRB-FOIA-00006107
NLRB-FOIA-00006108
NLRB-FOIA-00006109
NLRB-FOIA-00006110
NLRB-FOIA-00006111
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NLRB-FOIA-00006113
NLRB-FOIA-00006114
NLRB-FOIA-00006115
1
Microsoft Outlook
Attachments: OpeningIssafinalwithoutcites.doc
NLRB-FOIA-00006116
STATEMENT OF
LAFE E. SOLOMON
BEFORE THE
JUNE 17, 2011
NLRB-FOIA-00006117
NLRB-FOIA-00006118
assistants to Board members, General Counsel shall exercise general supervision over all
attorneys employed by the Board and would have general supervision over the officers
and employees in the regional offices. Like my predecessors, I have gone to great
NLRB-FOIA-00006119
lengths to ensure that all unfair labor practice charges, which must be initiated by private
parties, are fairly considered, relying on findings, reasons, precedents, checks through
appeals and through internal supervision, and procedural protections.
the Board for decision, subject to review by the courts. I would not be fulfilling my
responsibilities if I turned a blind eye to evidence that an unfair labor practice may have
occurred. I took an oath to enforce the National Labor Relations Act and to protect
workers from unlawful conduct.
private rights of the charging party and the charged party.
Thus, throughout the proceeding, the General Counsel remains master of the complaint
and the charging party is not permitted to pursue alternative theories of a violation
without the consent of the General Counsel. Throughout the proceedings, the General
NLRB-FOIA-00006120
Counsel is responsible to ensure that the prosecution of the case is justified by the facts
and law. As such, it remains open to the General Counsel to make concessions on issues
of fact or law and to pursue settlement discussions with the charged party -- even over the
objections of the charging party.
litigants.
NLRB-FOIA-00006121
NLRB-FOIA-00006122
1
Microsoft Outlook
NLRB-FOIA-00006123
1
Microsoft Outlook
Subject: RE: Boeing update
Thanks, Ill be there.
Nancy Cleeland
(202) 273-0222
NLRB-FOIA-00006124
1
Microsoft Outlook
stoppages.
NLRB-FOIA-00006125
2
will disappear.
America.
NLRB-FOIA-00006126
1
Microsoft Outlook
To: Contee, Ernestine R.; Kearney, Barry J.; Farrell, Ellen; Sophir, Jayme; Szapiro, Miriam; Katz,
Judy; Omberg, Bob; Ahearn, Richard L.
Subject: FW: Boeing - IAM meeting with AGC, Jan. 19
To: Willen, Debra L
Cc: David Campbell
Ms. Willen,
next week.
Sincerely,
Seattle, WA 98119
206-285-2828
NLRB-FOIA-00006127
1
Microsoft Outlook
Not responsive
NLRB-FOIA-00006128
2
a forum for legal
Relations Board ;
accusations of...
the Effectiveness
claiming the...
Andrew Martin
Librarian (Law)
1099 14th Street NW
Suite 800
(202) 273-3724
(202) 273-2906 fax
NLRB-FOIA-00006129
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NLRB-FOIA-00006130
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1
Microsoft Outlook
From: Sophir, Jayme
To: Bush, Lynn
Subject: RE: The Boeing Company Memo
Attachments: image001.gif; image002.gif
No. Leave it where it is for now and ask me again on Thursday.
From: Bush, Lynn
To: Sophir, Jayme
Subject: The Boeing Company Memo
Jayme:
I still have the above memo in drafts, should I move it to trans?
Lynn
Tracking:
NLRB-FOIA-00006199
2
Recipient Delivery
Bush, Lynn Delivered: 4/19/2011 3:26 PM
NLRB-FOIA-00006200
NLRB-FOIA-00006201
NLRB-FOIA-00006202
1
Microsoft Outlook
From: Szapiro, Miriam
Sent: Thursday, September 30, 2010 3:08 PM
To: Willen, Debra L
Subject: RE: Boeing
Hi Deb, that's great. I probably won't get to it until tomorrow, though, so you can just drop it off in my box.

To: Szapiro, Miriam
Subject: Boeing
Hi Miriam

Anyway, Im finishing up the Boeing draft do you want me to e-mail to you or should I just leave it in your box here?
Thanks, Deb
Non-Responsive
Non-Responsive
Non-Responsive
NLRB-FOIA-00006203
1
Microsoft Outlook
To: Szapiro, Miriam
Subject: RE: Boeing
As it turns out, I am still playing with the draft, so I will put it in your box.
To: Willen, Debra L
Subject: RE: Boeing

To: Szapiro, Miriam
Subject: Boeing
Hi Miriam

Thanks, Deb
Non-Responsive
Non-Responsive
Non-Responsive
Non-Responsive
NLRB-FOIA-00006204
1
Microsoft Outlook
To: Willen, Debra L
Subject: RE: Boeing
Sounds good
To: Szapiro, Miriam
Subject: RE: Boeing
As it turns out, I am still playing with the draft, so I will put it in your box.
To: Willen, Debra L
Subject: RE: Boeing

To: Szapiro, Miriam
Subject: Boeing
Hi Miriam
Thanks, Deb
Non-Responsive
Non-Responsive
Non-Responsive
Non-Responsive
Non-Responsive
NLRB-FOIA-00006205
1
Microsoft Outlook
Sent: Monday, October 04, 2010 8:33 AM
To: Karsh, Aaron; Dodds, Amy L.
Subject: RE: Party for Jeanette and Nina
Isn't this a 3 day wkend? I"m ok w/ another day next week; we're probably having a GC agenda
on Boeing at some point, but that will have to wait for BJK to decide.
________________________________________
Non-Responsive
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2
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1
Microsoft Outlook
Subject: RE:
________________________________________
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2
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Microsoft Outlook
________________________________________
Subject: RE:
________________________________________
Not responsive
Not responsive
Not responsive
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NLRB-FOIA-00006210
2
________________________________
________________________________
________________________________
Not responsive
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NLRB-FOIA-00006211
1
Microsoft Outlook
Sent: Wednesday, October 06, 2010 10:43 AM
To: Willen, Debra L
Subject: RE: Boeing draft
Thanks, Deb.
________________________________________
Sent: Wednesday, October 06, 2010 10:14 AM
To: Szapiro, Miriam
Subject: Boeing draft
Miriam -- I'm attaching slightly marked-up version of the draft.
See what you think.
NLRB-FOIA-00006212
1
Microsoft Outlook
Sent: Monday, February 07, 2011 3:14 PM
Cc: Szapiro, Miriam
Subject: Boeing Co.
David Campbell just called.
His client wants to know whats going on.
NLRB-FOIA-00006213
1
Microsoft Outlook
To: Willen, Debra L
Subject: RE: Boeing Co.
And the answer is . . . . . . .
Cc: Szapiro, Miriam
Subject: Boeing Co.
Tracking:
NLRB-FOIA-00006214
2
Recipient Read
Willen, Debra L Read: 2/7/2011 3:49 PM
NLRB-FOIA-00006215
1
Microsoft Outlook
To: Willen, Debra L
Cc: Szapiro, Miriam
Subject: Re: Boeing Co.
Tell him lafe is thinking about it. I had unsatisfactory conversation with Kilberg. I'll fill everyone in on Wed. I answered his
questions and he is getting back to Boeing. I'll call again Friday if Idon't hear sooner.
--------------------------
Cc: Szapiro, Miriam
Sent: Mon Feb 07 15:14:26 2011
Subject: Boeing Co.
NLRB-FOIA-00006216
1
Microsoft Outlook
Not responsive
NLRB-FOIA-00006217
2
a forum for legal
Relations Board ;
accusations of...
the Effectiveness
claiming the...
Andrew Martin
Librarian (Law)
1099 14th Street NW
Suite 800
(202) 273-3724
(202) 273-2906 fax
NLRB-FOIA-00006218
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1
Microsoft Outlook
Not responsive
NLRB-FOIA-00006288
2
a forum for legal
Relations Board ;
accusations of...
the Effectiveness
claiming the...
Andrew Martin
Librarian (Law)
1099 14th Street NW
Suite 800
(202) 273-3724
(202) 273-2906 fax
Tracking:
NLRB-FOIA-00006289
3
Recipient Read
Sophir, Jayme
Sutton, Dexter E. Read: 4/11/2011 12:25 PM
NLRB-FOIA-00006290
1
Microsoft Outlook
To:
Miriam Szapiro
Supervisory attorney
NLRB Division of Advice
202-273-0998
Miriam.Szapiro@nlrb.gov
POLITICAL PRESSURE
POLITICAL PRESSURE
E 6 privacy
NLRB-FOIA-00006291
2
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3
###
_____________________________________________________________
prohibited.
____________________________________________________________
NLRB-FOIA-00006293
NLRB-FOIA-00006294
1
Microsoft Outlook
From:
To: Szapiro, Miriam; Willen, Debra L
Subject: FW: Battling over Boeing: If Obama caves in, labor is history | Viewpoints, Outlook |
Chron.com - Houston Chronicle
From:
To:
Subject: Re: Battling over Boeing: If Obama caves in, labor is history | Viewpoints, Outlook | Chron.com - Houston
Chronicle
Yes, I agree that this is a key labor issue, but I ahve little faith in the administration; however , keep the ball rolling and
hold your head high.
pop
From:
To:
Sent: Wed, May 25, 2011 6:56 pm
Subject: FW: FW: Battling over Boeing: If Obama caves in, labor is history | Viewpoints, Outlook | Chron.com - Houston
Chronicle
________________________________________
From: Miriam - Szapiro
To: Willen, Debra L;
Subject: Fwd: FW: Battling over Boeing: If Obama caves in, labor is history |
Viewpoints, Outlook | Chron.com - Houston Chronicle
and some more...
From:
Sent: Sunday, May 22, 2011 11:15 AM
To:
Subject: Battling over Boeing: If Obama caves in, labor is history | Viewpoints,
Outlook | Chron.com - Houston Chronicle
http://www.chron.com/disp/story.mpl/editorial/outlook/7575326.html
NLRB Attorney in Advice
NLRB-FOIA-00006295
1
Microsoft Outlook
To: Willen, Debra L
Subject: RE: Battling over Boeing: If Obama caves in, labor is history | Viewpoints, Outlook |
Chron.com - Houston Chronicle
Tell Pop we love him!
Miriam Szapiro
From:
To: Szapiro, Miriam; Willen, Debra L
Subject: FW: Battling over Boeing: If Obama caves in, labor is history | Viewpoints, Outlook | Chron.com - Houston
Chronicle
From:
To:
Subject: Re: Battling over Boeing: If Obama caves in, labor is history | Viewpoints, Outlook | Chron.com - Houston
Chronicle
Yes, I agree that this is a key labor issue, but I ahve little faith in the administration; however , keep the ball rolling and
hold your head high.
pop
From:
To:
Sent: Wed, May 25, 2011 6:56 pm
Subject: FW: FW: Battling over Boeing: If Obama caves in, labor is history | Viewpoints, Outlook | Chron.com - Houston
Chronicle
________________________________________
From: Miriam - Szapiro
To: Willen, Debra L;
Subject: Fwd: FW: Battling over Boeing: If Obama caves in, labor is history |
Viewpoints, Outlook | Chron.com - Houston Chronicle
and some more...
From:
Sent: Sunday, May 22, 2011 11:15 AM
To:
Subject: Battling over Boeing: If Obama caves in, labor is history | Viewpoints,
Outlook | Chron.com - Houston Chronicle
http://www.chron.com/disp/story.mpl/editorial/outlook/7575326.html
Ex. 6 personal privacy Ex. 6 personal privacy
NLRB-FOIA-00006296
2
Tracking:
NLRB-FOIA-00006297
3
Recipient Read
Read: 5/26/2011 9:41 AM
Willen, Debra L
NLRB-FOIA-00006298
1
Microsoft Outlook
From: Todd, Dianne
Drew Lunt called me back and informed me that Boeing is going to respond to this latest charge in its
submission to Advice which is due on December 6, 2010. Drew will forward a copy to us at that time.
Thanks!
From: Todd, Dianne
Dianne
NLRB-FOIA-00006299
1
Microsoft Outlook
To: Cleeland, Nancy; Solomon, Lafe E.; Ahearn, Richard L.; Mattina, Celeste J.
Subject: RE: now bloomberg is calling
Seattle PI:
http://www.seattlepi.com/business/article/Boeing-illegally-put-second-787-line-in-S-C-1345345.php
I think its time
Nancy Cleeland
(202) 273-0222
NLRB-FOIA-00006300
1
Microsoft Outlook
Garza, Jose
Tony Wagner
NLRB-FOIA-00006301
1
Microsoft Outlook
Sent: Wed May 04 17:17:31 2011
Tony Wagner
Not responsive
NLRB-FOIA-00006302
1
Microsoft Outlook
POLITICAL PRESSURE
Non-Responsive
NLRB-FOIA-00006303
2
NLRB-FOIA-00006304
3
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NLRB-FOIA-00006305
NLRB-FOIA-00006306
1
Microsoft Outlook
POLITICAL PRESSURE
Non-Responsive
NLRB-FOIA-00006307
2
NLRB-FOIA-00006308
3
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prohibited.
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NLRB-FOIA-00006309
NLRB-FOIA-00006310
1
Microsoft Outlook
Garza, Jose
businesses
Tony Wagner
NLRB-FOIA-00006311
1
Microsoft Outlook
businesses
Tony Wagner
Not responsive
NLRB-FOIA-00006312
1
Microsoft Outlook
Thanks! Will get it posted now.
Tony
Here it is.
To: Cleeland, Nancy
Nancy Cleeland
(202) 273-0222
To: Cleeland, Nancy
Hi Jennifer,
NLRB-FOIA-00006313
2
Nancy Cleeland
(202) 273-0222
NLRB-FOIA-00006314
1
Microsoft Outlook
To: Cleeland, Nancy; Solomon, Lafe E.; Garza, Jose
Subject: RE: bryson
Its all over Twitter at the moment too links to this AP story:
http://seattletimes.nwsource.com/html/nationworld/2015386247_apuscommercenomineesenate.html?syndication=rss
Subject: bryson
Nancy Cleeland
(202) 273-0222
NLRB-FOIA-00006315
1
Microsoft Outlook
From: Jude Bryan [bryan@workerlaw.com]
To: Willen, Debra L
Cc: David Campbell
Ms. Willen,
next week.
Sincerely,
Seattle, WA 98119
206-285-2828
NLRB-FOIA-00006316
1
Microsoft Outlook
POLITICAL PRESSURE
NLRB-FOIA-00006317
2
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NLRB-FOIA-00006318
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prohibited.
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NLRB-FOIA-00006319
NLRB-FOIA-00006320

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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

NORTH CHARLESTON, SOUTH CAROLINA

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

NORTH CHARLESTON, SOUTH CAROLINA

This document is fully redacted. ID: 0.7.42.523837.1

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315,558 351 ,926 327,137 250,21 1 205,21 5

State or other jurisdiction of

(I.R.S. Employer Identification No.)

(Address of principal executive offices)

Title of each class

Common Stock, $5 par value

New York Stock Exchange

The Boeing 737 is the best-selling family of com-

The B-1B Lancer is a long-range bomber in service

From: Willen, Debra L

From: Willen, Debra L

From: Willen, Debra L

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