"Right now, there are nearly three million men and women on active and reserve duty in the United States Armed Forces around the world," says the commentator in Boeing's latest television commercial. In it, sailors swab decks, a submarine raises its periscope, and a fighter jet blasts off. The screen then fades to black and the Boeing logo fades in.
In addition to the commercial, Boeing recently updated its website with patriotic images, and is running full-page color ads--featuring battleships and satellites--in national newspapers, to coincide with the surge in nationalism. But Boeing's advertising isn't just trendy, it's also symbolic of Boeing's makeover from commercial airplane manufacturer to full-blown defense contractor.
In recent years, the previously Seattle-based company has been actively expanding into the space and defense business, in large part to blunt the dramatic profit swings of the airline business. To be sure, making commercial airplanes is still big business for Boeing. Two-thirds of Boeing's $57 billion company is devoted to airplane manufacturing. But things are changing. In 1996, despite antitrust and Department of Defense (DOD) concerns, Boeing merged with the second biggest defense contractor at the time, McDonnell Douglas. Since then, Boeing has made significant headway in the defense biz. But Boeing has a problem. Everyone still thinks of them as just a good ol' airplane company.
The company's future will suffer if the new advertising campaign, by Foote Cone & Belding, doesn't sell Boeing's viability as a legit defense and space company to the public, and more importantly, to Wall Street and the Department of Defense. If Wall Street thinks of Boeing as just an airline company, Boeing's stock price will reflect every fluctuation in the airline industry. Furthermore, if the DOD doesn't see Boeing as a legit player, then the number of big-budget contracts awarded will reflect that perception. Case in point: Last month's loss to Lockheed Martin for the $200-400 billion U.S. Joint Strike Fighter contract has all but killed Boeing's immediate future in the jet fighter business.
