This is a partial transcript from Your World with Neil Cavuto, April 23, 2003, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.

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TERRY KEENAN, GUEST HOST: They’re not dropping any money in the airline industry. And that hurt Boeing’s commercial plane business in the first quarter. The company also trimming its overall outlook for the rest of the year. There was a bright spot. Some of Boeing’s military equipment performed very well in Iraq. And according to CEO Phil Condit, it’s the defense side that’s really driving the business.

(BEGIN VIDEOTAPE)

PHIL CONDIT, BOEING CHMN. & CEO (BA): We set out seven years ago to say we wanted balance. We didn’t want to be all commercial airplanes or all defense. Obviously that was a good strategic decision. Commercial is down right now, defense is growing. Commercial is going to come back. The combination of those two is what gives us a real strength.

KEENAN: Yet the stock is trading about where it was seven years ago, in fact, near 8-year lows. What do you see in this strategy that Wall Street obviously doesn’t right now?

CONDIT: I think that the Street hates uncertainty, and the question of, you know, what is going to happen in the commercial airplane marketplace, can we really do what we said we were going to do in defense, are sort of the two big issues. I think what we are doing is proving we can be profitable even in a downturn in commercial. And we are substantially growing our defense business. And I think the Street is going to see that.

KEENAN: Give us an insight into your customers, first on the commercial aviation side. You’ve said that that area is in a depression.  Do you expect that one or more of the major U.S. carriers will go out of business, not just bankrupt and restructure but actually go out of business?

CONDIT: It could easily happen.

KEENAN: Are you factoring that into your equation?

CONDIT: Oh yes. No, we absolutely are. And because what you really look at is overall aggregate demand. How many people want to fly? And will that be on 12 airlines or will it be on 11, that demand is still the important factor.

KEENAN: Your other major customer, of course, is the U.S. Defense Department. Many of your weapons having great success during the war in Iraq, including the JDAM. But it was a short war, fortunately, how does that play out for your company though?

CONDIT: Well, I think the real case for our situation is what we learned. We are on the very front edge of what the Defense Department calls "network centric operations," the ability to really hook airplanes and ground vehicles and satellites together to increase visibility, situation awareness. And we are a leading player in that area. And so that is where our future really resides.

KEENAN: So what kind of growth in defense spending for your products are you factoring in going forward?

CONDIT: Well, our biggest one is probably a future combat system, which is a real transformational program for the Army. We have got ongoing production of C-17s and FA-18 Hornets. So we have got a really broad spectrum, some existing programs, some new programs that are coming on, and some that have tremendous long-term potential.

KEENAN: The president last week toured one of your factories, part of his program to help spur economic growth. Yet you have been a big jobs cutter over the last couple of years, is the job cutting over at Boeing?

CONDIT: It is probably not over. It is certainly on a very different slope. And the real key there is when does the market begin to come back in commercial airplanes? That’s where the big cuts have been.

KEENAN: When do you think will happen?

CONDIT: We think production is going to be about flat this year and next, and probably slightly up in 2005.

(END VIDEOTAPE)

KEENAN: Phil Condit of Boeing.

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