Flying high: thanks to Boeing's job modification initiative, the company now enjoys a tenfold return on its injury reduction investments. It's also enjoying big boosts in productivity and employee-employer relations

Risk & Insurance, May, 2004 by Dan McCue

INDUSTRY RISK REPORT AEROSPACE AND DEFENSE

So the saying goes, it's best not to put all of one's eggs in one basket. However, that's what most aerospace and defense companies are forced to do, since the bulk of their customers are governments and government agencies. It's just the nature of the business. Sound risk management strategies are what help these companies keep their exposures from getting off the ground.

THE BOEING CO. Chicago, Ill.

Each day, more than three million passengers board 42,300 flights on Boeing jetliners, more than 345 satellites put into orbit by Boeing launch vehicles pass overhead and 6,000 Boeing military aircraft stand guard with air forces of 23 countries and every branch of the U.S. armed forces. Boeing is the leading aerospace company in the world and a top U.S. exporter. New developments in the works for Being: A new global air traffic management system, and a global-mobile communications system that will allow passengers on any moving platform to be connected to high-bandwidth data.

Chief risk executive: Terry Leitch, Director of Risk Management

CEO: Harry C. Stonecipher

CFO: James A. Bell

Board audit chair: John M. Shalikashvili

Total revenue: $50,485.0 million

Net income: $698.0 million

Number of employees: 166,000

Primary broker: Marsh

Captive: Astro II Inc. (Vermont)

Risk exposures: Adverse developments in the value of collateral securing customer and other financings; the occurrence of any significant collective bargaining labor dispute; an adverse development in rating agency credit ratings or assessments; the actual outcomes of certain pending sales campaigns and U.S. and foreign government procurement activities, including the timing of procurement of tankers by the U.S. Department of Defense; factors that could result in significant and prolonged disruption to air travel worldwide (including future terrorist attacks); any additional impacts from the attacks of September 11, 2001; worldwide political stability; domestic and international economic conditions; changing priorities or reductions in the U.S. Government or foreign government defense and space budgets

Risk strategies: Boeing has made a serious investment in its enterprise risk system, which contains historical loss data for the entire organization, and enables them with the ability to analyze Boeing's risk portfolio as a whole and model the impact of different insurance structures on the company's cost of risk

UNITED TECHNOLOGIES CORP. Hartford, Conn.

United Technologies provides high technology products to the aerospace and building systems industries throughout the world. Its various subsidiaries serve a broad spectrum of needs in the marketplace: Carrier is the world's largest maker of heating and air conditioning units: Hamilton Sundstrand produces engine controls, environmental systems, propellers and other flight systems: Pratt & Whitney makes engines for both commercial and military aircraft; and UTC Power, via UTC Fuel Cells, makes fuel cells for commercial, transportation, residential and space applications.