Jim McNerney:
We have about 110 orders for both the freighter and the passenger. I wish we had more intercontinental orders which is what you were talking about. We are in discussions with about 8 to 10 major carriers. It is impossible for me to predict how many of those will order but typically when we are at this stage, a large number of them would. We are still basing our spending on what we perceive to be the market and by the way we are up to a good start with a 110 orders worth over a year to go before we have to set accounting quantities and the like. I also wish we had another couple major intercontinental orders right now and the guys are working hard at it and I think there is a good chance we will have some soon.

Joseph Nadol: Your 2009 guidance shows flat production on non-787. You have said that you are studying the 37 a few months ago. Did you come to any conclusion there?

James Bell: We are pausing after a series of increases across our model line and we are taking a hard look at the 37. It is fair to say if the economic situation does not deteriorate into something that we do not currently anticipate, if that does not happen that the bias would be to the upside there, longer term after 2008. We have time to make that call. And so we will take that time to make that call as we are moving forward but on the 67, the death of that program has been predicted for many years and the demand over the last couple of years has been strong even without the tanker situation. We are also like 11 or 12 on that program right now and so that is another decision we now have to face into and believe it or not we are having honest regard discussions with people right now about that airplane.

Joseph Nadol: Are there any non-Japanese customers that will be interested?

James Bell: There are a couple people in discussions.

Joseph Nadol: Is there is a timeframe on the 37?

James Bell: Over the next 12 months we would make a decision on that rate, it could be a longer than that, but we will be asking the question seriously over that timeframe.

Howard Rubel: Your major competitor talked about price increases the other day. Have you seen that realized in the market in any fashion?

Jim McNerney: No.

Ron Epstein: If the tanker stays with EADS and Airbus ends up setting up a wide-body production in North America how those will change the strategic outlook for the industry?

Jim McNerney: It would not change the nature of their business and it would not introduce another competitor. It ultimately gets down to a dollar based production site. If they end up wining this thing e that site will be pre-occupied with modifying freighters made in France for a long time. I am not sure they would immediately convert hat into something else. It is more of a geographic deployment. They have announced similar things in China, US. They have got lots of dispersed production in Europe. It will not be an in complicated supply chain for them to manage by the way as you look at from managing manufacturing operations.

Ron Epstein: When you look at your suppliers everything from raw material down to your Tier-I's, Tier-II's, on the legacy programs, how is the supply chain doing?

James Bell: It is doing fine. Not that it does not labor from time to time. We have go through periods where certain raw materials are scarce, other periods where quality funds are found. I would categorize them as being well managed and less difficult than you probably imagine. Most of our supply chain issues have been centered over and found the 787 development and those are well chronicled. I am trying to paint a picture, when I managing at everyday we are but we have had no major disruptions in our production and with our fingers crossed we think we can keep that record going.

Robert Spingarn: What kind of backlog erosion could Boeing tolerate before 2009 and 2010 production plans would be impacted?

Jim McNerney: When you looked what happened in 2000 when 6% or 7% of our orders ended up being cancelled and that was a difficult situation. There where a number of reschedules, a push outs, and number that the majority did not change. We managed to work through with our customers we are facing difficult headwinds to say the least of that time. A lot of those orders were US based carriers then. That is in contrast where we are today, we are the vast majority of orders 80% plus are with international carriers backed by Ex-Im financing. We are in a stronger backlog position, today all you can use is data here, because you can not predict future. If you had exactly the same situation happened to you as happened to you in 2001 same kind of pressures although differently constructed you can end up with something like that. I think that given that we have constraints on most of our product lines right now, we can get people airplanes. We are biased to be cautious on the rate increases even though we are increasing, but you add that all up, the strong ability to managing the past when we got lacked. We are in conservative position to go again and return we have more order than we have production.

Robert Spingarn: Do you think given the diversification of the backlog and strength of it, 6 plus years of production, that if there were cancellations or deferrals other customers would be more welling to slip forward?

Jim McNerney: In the couple of incidences that we have had during this year that is exactly what happening.

Hal Weitzman: You said if EADS were to end up wining the tanker contract would face a complicated supply chain. Given your own experiences with the 787, what have you learned in terms of supply-chain issues?

Jim McNerney: We have learned a lot and have the scars to prove it. Having real time visibility of your partner's inventory as well as their rep as they are assembling things is a global understanding of how things are coming together all the way down to Tier 3 and 4. IT visibility, like we had on the engineering side and so there is some learning there for us. We are already doing it differently. Whether Airbus chooses to learn from that or not is something that, then at last they will be confronted with similar challenges and they know it will not be easy.

Dominic Gates: There is a change to the 747-8 program. the change to the wing was effectively a new wing and put a total price tag of 747-8 development of somewhere between 3 and $4 billion. Is the characterization of more or less the whole new wing accurate and what about that price tag?