A Investing in innovation The financial blueprint for building an even bigger, better Boeing s Boeing marks its first century in business, the company is moving forward on several new programs—including the CST-100 Starliner and 777X—that may well define its next 100 years. What will follow those projects? Will Boeing build a new “middle of the market” airplane that bridges the 737 and 787 families? What about possibilities in the defense and space business? Frontiers recently sat down with Greg Smith, Boeing’s chief financial officer and executive vice president of Corporate Development & Strategy, to discuss the company’s approach to investing in the future. L E ADERSHIP M ESSAGE Greg Smith Chief financial officer, Boeing Executive vice president, Corporate Development & Strategy PHOTO: BOB FERGUSON | BOEING 06 | BOEING FRONTIERS a more capable product or service offering. Innovation can also come in the form of a more efficient and flexible production system that allows us to get the product to our customer sooner and at lower costs. With the increasing focus on affordability, might Boeing pull back on launching new products and services? Investing in innovation and our people has been and continues to be a top priority for us. Since 2005, we have invested more than $38 billion in research and development. On top of that, we have spent another $18 billion on facility and equipment upgrades so that our teams have the infrastructure to innovate. That adds up to $56 billion over a 10-year period and we’re seeing the results in the form of the 787 family, the Starliner and other programs. What about the plan for future investments? This year, we plan to invest more than $6 billion in R&D and capital expenditures. And I see us maintaining a similar level for the next few years. These are significant investments to build an even bigger, better Boeing, one that meets our customer needs and positions the company to win in the future. I would point out, though, that dollars alone do not translate to innovative products. We operate in a very competitive marketplace. Our customers want more capability, and they want it faster and at a lower price. New and traditional aerospace manufacturers are adapting to this reality. We have to be smarter and quicker in the way we innovate by focusing on solving our customers’ problems, managing development risk, and improving first-time quality and safety as we deliver on our commitments. What role do you see innovation playing in Boeing’s second century? It will play as central a role as it did in our first 100 years. A few months ago, I was fortunate to be able to attend the first flight of the 737 MAX. Standing on the flight line, you could feel the pride and passion of our teammates as the airplane lifted into the air. The commitment of our people to always build something better is what has made our company great. And this innovative spirit will be critical to our second century of aerospace leadership. Though, I would add that innovation is not just about designing
Frontiers May 2016 Issue
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