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Copyright © 2013 Boeing. All rights reserved

International Titanium Association

John Byrne

Vice President of Aircraft, Materials & Structures

October 8, 2013

BCA Supplier Management

BOEING PROPRIETARY

Copyright © 2013 Boeing. All rights reserved.

2

Agenda

Business Environment

Partnering for Success

Boeing Titanium Strategy

Opportunities and Risks

Going Forward


Emerging and

Developing

Economies

Business Model Shifts Replacement

Pent up demand

Retirement wave

China, Emerging Asia,

Middle East, Africa

Geographic expansion of

Low Cost Model

Gulf 3 – one stop anywhere

Alliances

Market drivers


Airlines will need more than 35,000 new airplanes valued at $4.8 trillion

Airplane deliveries: 35,280 2013 - 2032

Market value: $4.8T 2013 - 2032

0

5,000

10,000

15,000

20,000

25,000

Regional jets 6%

Single- aisle 70%

Small wide-body

13%

Large wide-body

2%

Medium wide-body

9%

0

500

1,000

1,500

2,000

2,500

Regional jets 2%

Single- aisle 47%

Small wide-body

23%

Large wide-body

6%

Medium wide-body

22%

2,020

24,670

4,530

760

3,300

$80B

$2,290B

$1,100B

$280B

$1,090B


A large and valuable market … still in play

Regional jets

Single- aisle

Small wide-body

Large wide-body

Medium wide-body

Regional jets

Single- aisle

Small wide-body

Large wide-body

Medium wide-body

$53B

$1.5T

$700B

$202B

$934B

Total units: 24,300 Total value: $2.85T

1,340

16,699

2,877 2,830

547

*Projected demand for new airplanes through 2032


2011-2016 growth: 15 rate increases, 58% expanded capacity

2011 2012 2013 2014

6

Aggregate for all

airplane programs

43.5

per month

63

per month

Current Rates:

737 – 38/mo

747 – 1.75/mo

767 – 1/mo

777 – 8.3/mo

787 – 7/mo

40% rate increase from 2011 to 2014


7





Going Forward

Agenda


Customers expecting more for less

1975 1995 Today 2020

Fuel burn per seat improvement

Price per seat

8

More efficient products

and services

Integrated services for

mixed fleets

Availability and

reliability

Standardization and

simplification

Lower ownership and

operating costs

The right product…for the right price… at the right time


Partnering for Success Affordability focus areas

BCA SM

Cost Down

Leadership

Achieve

First Time

Quality

Design

Cost Out

of Our

Products

Supply

Chain

Architecture

Competition,

Commercial

Rebalancing,

& Volume

1st Time Quality

Quality parts

Rate readiness

Design Cost Out / Lean+

Value Engineering

Accelerated Opportunity

Capture

Supply Chain Architecture

Value creation / innovation

Strategic sourcing

Competition / Commercial

Rebalancing / Volume

Risk / Reward

Statement of work adjustment

9



Specific targets flowed to the supply base

Plans required from each supplier

− High visibility on progress

− Define required supplier and Boeing actions

New work tied to achieving targets

Boeing committed to driving PFS targets

− Top-down commitment

− Willing and able to change the supply chain

10

Making our business affordable for the future

COPYRIGHT © 2011 THE BOEING COMPANY

SCM&O | Supplier Management

Copyright © 2012 The Boeing Company. All rights reserved.

Boeing Proprietary

Boeing Proprietary

AsiaFuji

Mitsubishi

Kawasaki

KAL-ASD

CanadaBoeing

Messier-Dowty

AustraliaBoeing

U.S.Boeing

Spirit

GE

Goodrich

EuropeMessier-Dowty

Rolls-Royce

Latécoère

Alenia

Saab

Wing tipsSeoul, Korea

Moveable trailing edgeMelbourne, Australia

Fixed trailing edgeNagoya, Japan

WingNagoya, Japan

NacellesChula Vista, CA

Tail finFrederickson, WA

Horizontal stabilizerFoggia, Italy

Aft fuselageCharleston, SC

Passenger entry doorsToulouse, France

Center fuselageGrottaglie, Italy

Mid forward fuselageNagoya, Japan Forward fuselage

Wichita, KS

Cargo access doorsLinköping, Sweden

Wing/body fairing

Landing gear doorsWinnipeg, Canada

Engines

GE – Evandale, Ohio

Rolls Royce – Derby, UK

Fixed and moveable

leading edgeTulsa, OK

Landing gearGloucester, UK

Center wing boxNagoya, Japan

Main landing gear

wheel wellNagoya, Japan

48

47

46

44

43

41

1145

Bringing the 787 Together

PURDUE CONFERENCE/PortlandDoghouse.wmv


11





Going Forward

Agenda


Boeing titanium strategy

Long-term sourcing agreements in place

Driving a closed loop scrap solution

Supporting 787 focus areas

− Optimizing buy-to-fly (mid 8s to mid 6s)

− Industrializing composites

Incorporating new products (737 MAX, 787-10, 777X) and

associated technologies

12

Superior performance means more affordable airplanes


13

Boeing titanium scrap view

Scrap collection and revert critical for

success

Current scrap supply situation is

temporary

Boeing actively protecting input

supply

All scrap segregated and treated like gold


14





Going Forward

Agenda


Reduction of titanium usage

– Reduction of buy-to-fly

Parts moving to other materials

– Titanium to Aluminum

New usage of titanium

737 MAX – titanium inner wall

787-10 – volume/size

777X – composite wing

Production stability

15

Opportunities and risks Entering Boeing supply chain

Business environment and rate increases demand focus and execution


16





Going Forward

Agenda


17

Going forward

Achieve system balance

– Demand, ordering inventory, and

revert

Focus on cost and rate execution

Support the new airplane

development

Capture the future…

Relentless focus on quality, affordability and flawless execution

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