Boeing Backs Faster Trade Pacts Condit Supports “Fast-Track” Trade Authority For President
New Boeing or not, one thing hasn’t changed: The company continues to champion free trade. Chairman Phil Condit on Thursday urged Congress to adopt new trading rules that would make it easier to ratify international trade agreements.
“Since 70 percent of our commercial airplanes are exported, all the people that work for our commercial airplane group in fact have their paychecks heavily dependent upon exports,” Condit told a luncheon audience at the National Press Club. “So everything that they buy, whether it is banks or cars or clothes or homes, are heavily dependent on exports.”
Congress will soon consider whether to grant the Clinton administration so-called “fast-track authority” for the next four years, which would permit Congress to vote only up or down on trade deals with no real chance to modify or amend them. Like the North American Free Trade Agreement and the GATT deals before it, fast-track authority is controversial and has scrambled the usual political alliances.
Boeing’s merger with McDonnell Douglas and Rockwell Aerospace hasn’t changed its views about free trade. But the opposition hasn’t changed, either, and that includes some of Boeing’s labor unions, who fear that fast-track authority would result in too little emphasis on labor conditions and environmental improvements abroad.
Condit didn’t directly discuss those concerns in Thursday’s speech, but he did suggest that the United States needs to seize the moment to remain competitive, or “there’s a risk that we’ll end up standing on the sidelines.”
“If we can access these new global market economies, we will prosper,” he said. “I believe that global market economies offer us the chance of a lifetime. This is not a time for our nation to be shy; it is a time to lead.”
On other topics, Condit predicted that the airline business will segregate into market niches. Looking at the hotel industry, Condit said 10 percent of the hotel market is geared toward luxury, with the remaining 90 percent evenly split between chains offering “convenient and reliable” rooms and those appealing to bargain-hunters.
“I think we will see a similar kind of thing in the airline business, and that means there will be a lot of room” for selling airplanes, he said. “So I don’t think it will be dominated by a few (airlines), but I wouldn’t be surprised to see some consolidation.”
Condit also said Boeing was trying to catch up on the late airplane deliveries it announced earlier this month.
“Everything we see now says we will catch up with that over the next month and a half,” he said, adding that the production slippage was “under control” despite a “dramatic increase” in airplane production in the past year.
As for the future of the McDonnell Douglas passenger airplanes, Condit said that by Nov. 1 Boeing would complete its analysis of which models have a future and which models should be retired. Without giving specifics, Condit hinted that not every model will survive. Analysts say the most likely targets are the MD-80 and the MD-90.
“It’s an issue that each of us has faced before,” Condit said. “We arrived at a point in time where we had to look at the 727.
“We had gotten down to very low production rates. We looked at what our future prospects were and said it doesn’t make sense to keep building this airplane at very low rates, and we finished the 727 production.”