Boeing 2008 Annual Report Download - page 17

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military, advance space and other company-sponsored product development. These expenditures are
expensed as incurred including amounts allocable as reimbursable overhead costs on U.S.
government contracts.
Our total research and development expense amounted to $3.8 billion, $3.9 billion and $3.3 billion in
2008, 2007 and 2006, respectively. This is net of research and development cost sharing payments
from suppliers of $50 million, $130 million and $160 million in 2008, 2007, and 2006, respectively.
These cost sharing payments are related to our 787 program.
Research and development costs also include bid and proposal efforts related to government products
and services, as well as costs incurred in excess of amounts estimated to be recoverable under cost-
sharing research and development agreements. Bid and proposal costs were $330 million, $306 million
and $227 million in 2008, 2007 and 2006, respectively.
Research and development highlights for each of the major business segments are discussed in more
detail in Segment Results of Operations and Financial Condition on pages 20 – 41.
Employees
Total workforce level at December 31, 2008 was 162,200.
As of December 31, 2008, our principal collective bargaining agreements were with the following
unions:
Union
Percent of our
Employees
Represented Status of the Agreements with the Union
The International Association of
Machinists and Aerospace
Workers (IAM)
19% We have two major agreements; one expiring in
June of 2010 and one in September of 2012.
The Society of Professional
Engineering Employees in
Aerospace (SPEEA)
13% We have two major agreements expiring in October
of 2012.
The United Automobile,
Aerospace and Agricultural
Implement Workers of America
(UAW)
2% We have one major agreement expiring in October
of 2009.
Competition
The commercial jet aircraft market and the airline industry remain extremely competitive. We face
aggressive international competitors, including Airbus, who are intent on increasing their market share.
We are focused on improving our processes and continuing cost reduction efforts. We continue to
leverage our extensive customer support services network which includes aviation support, spares,
training, maintenance documents and technical advice for airlines throughout the world to provide a
higher level of customer satisfaction and productivity.
IDS faces strong competition in all market segments, primarily from Lockheed Martin Corporation,
Northrop Grumman Corporation, Raytheon Company and General Dynamics Corporation. Non-U.S.
companies such as BAE Systems and European Aeronautic Defence and Space Company (EADS)
continue to pursue a strategic presence in the U.S. market by strengthening their North American
operations and partnering with U.S. defense companies. IDS expects the trend of strong competition to
continue into 2009 with many international firms pursuing announced intentions of increasing their U.S.
presence.
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