Boeing

CHICAGO - Boeing Co., the world's biggest aircraft maker, increased bonuses in its latest contract proposal to the Machinists union and left an earlier pension offer unchanged, falling short of union demands. The current agreement, covering 18,300 workers, expires at midnight Thursday. The union, Boeing's largest, wants increases in pensions and retiree benefits for its members, whose average age is almost 50. The Machinists are threatening to walk out when demand for commercial airplanes is the strongest in almost five years.

John Wraga doesn't own a single plane, but from his office at Hanscom Field in Bedford, Mass., he is crafting a grand vision for the future of air travel: an all-first-class airline with a manicurist, exercise equipment and "everything you can think of onboard." Wraga is among a number of entrepreneurs who want to become airline magnates: Fourteen applicants - Wraga not included - are seeking certification from the U.S. Department of Transportation to start airlines. It couldn't be a worse time to get into the business, though.

U.S. manufacturers saw a hefty 2.9 percent increase in orders in May, but the jump, rather than signaling a broad improvement for the industrial sector, primarily reflected a surge in Boeing Co.'s often volatile commercial jet sales. The Commerce Department reported yesterday that factory orders rose to $394.13 billion in May from $383 billion in April, the strongest month-over-month increase in 14 months. Despite the May increase, however, "signals are still mixed for manufacturing," said Marisa DiNatale, an economist with the consulting firm Economy.

ST. LOUIS - Boeing Co. named W. James McNerney Jr. as the new leader of the aerospace and defense giant yesterday, picking the 3M Co. chief over two senior Boeing executives. But in McNerney, Boeing will be getting one of the bluest of blue-chip executives. Trained by General Electric Co. as a manager and educated at Harvard and Yale, McNerney vowed yesterday to continue Boeing's recent momentum to restore a tarnished image with the Pentagon and to overtake European nemesis Airbus SAS as the world leader in commercial jet deliveries.

So there is hope after all for the battered U.S. dollar. That's good news for Americans traveling to Europe or buying foreign goods because their money should go a bit further. Economic and political disarray has dropped the once-mighty euro to nine-month lows against the greenback. Much-ballyhooed European unity isn't all it was cracked up to be. You can thank the postponement by the United Kingdom of its vote on the proposed European Union constitution. Thank the "no" votes in France and the Netherlands, too. Now on hold, that measure must be ratified by all 25 member nations to go into effect.

WASHINGTON - Contrite senior defense officials offered apologies and suggested procurement reforms to a Senate committee yesterday after a new report said the Pentagon violated federal procedures in pursuing a $23.5 billion contract to lease aerial refueling tankers from Boeing Co. The report by the Pentagon's inspector general could lead to "the complete restructuring in the way the department accomplishes acquisition for all of its goods and services," Deputy...

BRUSSELS, Belgium - The United States and European Union sued each other at the World Trade Organization over subsidies to airplane makers Airbus SAS and Boeing Co., setting the stage for the biggest clash in the WTO's 10-year history. The EU asked the WTO yesterday to outlaw U.S. aid to Boeing, a day after the Bush administration revived its case against European government loans to Airbus. Boeing lost its lead as the world's top seller of commercial jets to Airbus two years ago. Boeing, which EU Trade Commissioner Peter Mandelson said was instrumental in pressuring the United States to lodge the complaint, is attacking Airbus "not because it fears subsidies, but because it fears competition," he told a Brussels news conference.

CHICAGO - John Leahy, the indefatigable chief commercial officer of Airbus SAS, wasn't about to let a burst appendix prevent him from closing a crucial airplane deal. His malady - "No doubt brought on by Boeing," he quipped recently - required emergency surgery to lift out and disinfect several of his internal organs. Yet even from his sick bed, Leahy managed to help negotiate the recent deal to pump a $250 million loan into the pending US Airways-America West merger in return for a promise from the executives involved to help launch Airbus' newest plane - the A350.

In an airplane hangar north of Fort Worth, Texas, technicians are preparing to mount a fire-hydrant-shaped device onto the belly of an American Airlines Boeing 767. It is an effort that could soon turn into a more than $10 billion project to install a high-tech missile defense system on the nation's commercial planes. The Boeing 767 - the same type of plane that hijackers flew into the World Trade Center - is one of three planes that, by the end of this year, will be used to test the infrared laser-based systems designed to find and disable shoulder-fired missiles.

WASHINGTON - Just three weeks after Army Secretary Francis J. Harvey said there would be no "significant costs" in restructuring the Army's contract for its Future Combat System, the linchpin of the service's 21st-century force, Pentagon officials now say the changes will cost tens of millions of dollars. The officials, who requested anonymity, estimated the cost of changing the contract at $25 million to $75 million, which could raise new concerns among members of Congress already sharply critical of cost overruns and lax oversight in the Army's largest acquisition program.