Photographer: David Ryder/Bloomberg
Boeing CEO Is Intent on ‘Targeted’ DealsBy
Muilenburg says main focus is on investing in factories, jets
Planemaker will continue to pour cash into buybacks, dividends
Boeing Co.’s boss threw cold water on speculation that the aerospace giant is contemplating a major acquisition, reaffirming the company’s focus on “targeted” deals and returning cash to shareholders.
Chief Executive Officer Dennis Muilenburg said Boeing’s top priorities are investing in its factories and jetliners while expanding shareholder returns. The planemaker has the “horsepower” to pursue deals while pouring cash into share buybacks and dividends, Muilenburg said.
“They’re going to be targeted acquisitions and things that align with our strategy,” he said at a Citigroup Inc. conference Wednesday.
As the Chicago-based manufacturer publicly courts Brazilian planemaker Embraer SA, speculation has mounted that Boeing might also look at the aviation divisions of General Electric Co. or Honeywell International Inc. Adding GE’s jet-engine unit, already a close industrial partner, would reshape the aerospace landscape at a cost to Boeing of about $100 billion, Melius Research analyst Carter Copeland said Tuesday in a note to clients.
For its growth strategy, Muilenburg pointed to examples like a new seat-making joint venture Boeing is forming with Adient Plc, which should expand the array of high-profit-margin parts the planemaker sells over an aircraft’s 30-year lifespan.
Forging a new company with Embraer’s commercial operations would expand Boeing’s aircraft line-up, along with its sales of spare parts and services. Boeing could also tap the Brazilian company’s engineering corps to help with its new jet, the so-called 797, keeping the workforce busy after Embraer’s new E2 family of jets comes to market.
While Muilenburg wasn’t asked directly whether GE Aviation is on Boeing’s wish list, he was skeptical of the benefit provided by another market-shaping merger: United Technologies Corp.’s $23-billion takeover of Rockwell Collins Inc.
“Until proven otherwise, we haven’t seen the value that combination provides in cost reduction,” he said.