Phil Condit, chairman & CEO of Boeing

This is a partial transcript from Your World with Neil Cavuto, September 5, 2001.

NEIL CAVUTO, HOST: The winged wonder is back. The Concorde getting the green light from British and French regulators to fly again next week, This plane has been in a class by itself for some 31 years, but things are about to change. Boeing hopes to break into the lucrative market with a fast-speed jet of its own that it's developing, and it's called the Sonic Cruiser.

This but one of many projects that Boeing will be working on, and at the company's new headquarters in downtown Chicago, the city really rolled out the red carpet for them today.

Joining me now is Phil Condit, the chairman and CEO of Boeing Corporation.

Phil, good to see you.

PHIL CONDIT, CHAIRMAN & CEO, BOEING: Good to see you, Neil.

CAVUTO: All right, everyone — you know, talk about timing. You go for this big, splashy office today. You get the mayor, the governor of Illinois there. And then you have your lethal competitor, a competitor is saying: The Concorde is back. We're going to try to one-up these Boeing guys. What do you think?

CONDIT: Well, I mean, Concorde is not it. It's a very limited airplane, very small market. We're going after the big market and we think we can really capture it with something like Sonic Cruiser.

CAVUTO: All right, now, this Sonic Cruiser, just to catch me up on this, this is going to — 200 people can sit in this thing. It can fly at almost the speed of sound, right?

CONDIT: Right.

CAVUTO: But this is a 2006 story, right?

CONDIT: Yeah, but you know, what we're really looking at is a point-to-point strategy, trying to give every traveler the opportunity not to go through congested hubs to go where they want to go. So build an airplane that is both faster and has great range so it can take you where you want to go.

CAVUTO: So, Phil, let me ask you — I'm curious — how long would it take me to go from New York to Paris in this plane?

CONDIT: That's about a six-hour trip now. It would take an hour off that trip.

CAVUTO: So it would be five hours versus...

CONDIT: So five hours.

CAVUTO: ... the Concorde's three hours.

CONDIT: Right.

CAVUTO: Do you look at the Concorde as your competition or are they so pricey — $8,600 a ticket or whatever it is — that you don't consider them competition?

CONDIT: No, in my view, that's a niche market play. We're looking at the broad market. We're trying to come in with an airplane that has operating economics as good as or better than any current airplane, and brings the value of speed and range so that it is a real market winner.

CAVUTO: All right. You know, a couple of other things were occurring today that I thought I'd raise with you, Phil, and besides just your office opening. And that is, you know, the E.U., that it might now go after Hewlett-Packard and Compaq. You dealt with this with the McDonnell Douglas merger, the concessions that had to be made. Jack Welch had some choice adjectives off-air about all of this when he was last here.

But are they getting really anti-American now or just does it appear that way?

CONDIT: Well, one, I think there's always that risk, and our view is that the world is way better off with an open trading environment than it is with a closed environment. Europe is better off with American markets, America is better off with European markets. So what we've got to do is make sure that that happens, and it isn't going to happen by throwing rocks at each other. It's by sitting down and solving these issues.

CAVUTO: Yeah, but you had to make a lot of concessions to make your thing go through, especially even getting (UNINTELLIGIBLE) the satellite business (UNINTELLIGIBLE) some time back, that sometimes it isn't worth it. I mean, isn't that the read of some American CEOs?

CONDIT: It can be that way. We actually didn't have to make any major concessions. We got through it. It took negotiation, but we made it.

I think the real deal is, one, you've got to start the process and recognize it's there. Don't ignore it. The second is, as a country, I think the U.S. needs to make it very clear that an open trading environment is what we're after, not a restrictive one, and that we both have a lot to gain. And that's an important element.

CAVUTO: All right, now, you are considered now, I guess, increasingly a defense stock besides just an aerospace player, and it's a group that's been sort of picked on lately, because of disappointment from the Bush administration that maybe the Boeings, the Lockheed Martins, the Raytheons — I think we have a chart of this — that they're not going to get as much help from Washington, certainly as much financing, for new, big new projects as was earlier thought to be the case. Are you worried?

CONDIT: Well, the great thing about Boeing is it's not a one-trick pony.

CAVUTO: Right...

CONDIT: We're not just a defense stock or just a commercial airline stock or just a space stock. We bring the strengths of all of those, and so what we see ahead is we're going to be able to bring continued growth in earnings, which is something we couldn't say before because we've got a much broader company.

CAVUTO: Let me ask you, with all of the big officials there, you know, been to Seattle many, many times, Phil, and I've seen all the big hangars and everything. But you were so associated with Seattle and the environment there. I just can't picture this Chicago thing. What is in Chicago? Is this a bunch of desks or what? What's that?

CONDIT: It is the headquarters unit. It's going to be 400 to 500 people. It will be those of us who are focused on where's this company going, what's the long-range strategy, where do the assets go, which projects do we fund, where do the key people go — separate from any one of the operating groups.

You know, to use a model, that's GE's model. And what we're trying to do is make sure that we're running a broad-based company, not just one piece of it.

CAVUTO: When you look at the future for the economy here — I mean, they're saying recession; I guess all semantics right now — how would you define your industry right now?

CONDIT: Ours actually is overall pretty good. In fact, in some areas very good. This has been a very interesting economic period. I believe we had a high-tech bubble, and we had to eat through tremendous valuations, a lot of wealth in that sector and work our way through. But then some of the basic industries, some of the things we're doing, were chugging along in great shape.

CAVUTO: OK, Phil Condit, always a pleasure. Thank you very much.

CONDIT: You bet. Thanks, Neil.

CAVUTO: The man who runs Boeing, Phil Condit.

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