tv Maria Bartiromos Wall Street FOX Business November 18, 2018 8:00pm-8:31pm EST
we hope you join us. good night from new york. [♪] maria: happy weekend. welcome to the program. we analyze the week it was an opposition you for the weekend. i'm maria bartiromo. coming up in a moment, chairman and ceo and president of boeing is here. my special guest is the special guest for a wide-ranging interview but cover questions about the new boeing 737, china trade, impact of a strong dollar and higher interest rates as well as a booming aerospace and travel market. we'll get to that will materially but the headlines everything from wall street to main street. >> markets cannot continue their
winning ways this week after two weeks in the green with all three major markets are well into the red. dow losing well over 2% and the tech sector played a major role in the market cycle. earlier in the week they found themselves approaching bear market territory and chipmaker in the video and lowest point from august of last year. oil was not a fighter and chris falling more than 4% this week that is the sixth straight week of losses for oil. drivers are enjoying the effect watching gas prices lower 437 straight days now. we have uncertainty for also played a role in market after uk prime minister teresa mae announced wednesday that our cabinet had proved a rough draft of a brexit agreement. while the draft is a major step in the process the deal with skepticism from both the left and right and saw for cabinet officials resign and led to calls for teresa may to september uk has until march to finalize its exit from the
european union. lastly, amazon announcing its choices for each two to this week. the elect split between long island city new york and arlington virginia. each location is expected to appoint roughly 25,000 employees in the online giant says it will invest five billion dollars into the conduction project. amazon begin the search last year and received outpatient from 238 cities across north america. maria, back to you. maria: us and china for 16 chain tariffs nearly five moscow and so far the airline industry has avoided getting hit and that does not make my next guest feel that much better and impact his company would prefer to see these issues resolved as soon as possible. this is an important export and we're talking right now with the boss at boeing, ceo and chairman to meet right now. good to see you. i know you been involved in these china talks and is it one in four of the planes let's work
to china this year or next year? it's an important piece of business and the us largest expert. >> us china relationship is exporting to us and a quarter of a commercial aircraft delivery go to china today and very important market for us. look at the growing global aerospace market and the world needs 43,000 new airplanes over the next 20 years and 7,000 of those are in china. here in the us aerospace is the biggest trade surplus generator and $80 billion of surplus per year and boeing business and supply chain is the biggest piece that. maria: i know it's the second largest market and the industry really but this is where the growth is. talk to us about why there's a good happening in china. billions have not even been on a plane before and you think that's going to grow your business even more? >> it's a long-term sustained
growth business. it's the incredible strength of the aerospace market place. look at passenger traffic around the world is growing at 67% a year driven principally by middle-class people that are committed to the traveling public for the very first time in her life. think every year now we are seeing about a hundred 50 million new passengers and people that fight for the first time. but most estimates less than 20% of the world preparation has yet to take a single flight. when you think long-term growth opportunity here it is tremendous. as a result, were wrapping up commercial plane production and will produce more than 800 airplanes this year will be a new record by the end of the decade more than 900 a year. maria: what does the us do that china steals our intellectual property and forces the transcript technology. for example, china can be that far behind boeing. when we see a chinese jet maker try to compete with you and did you have to transfer your technology in terms of jet making to the chinese in order to operate their? >> it's part to know aerospace
is a globally competitive marketplace because of the attractiveness of the market is attracting more competitors. airbus is a big competitor of ours and racine in emerging competitor in china,. [applause] working on the c919 aircraft is in our supply chain. as we know the model in china is we compete and cooperate in the sport for us as a company to always stay a step ahead. maria: how you invest in out innovate when you also have to work with these guys and they want to know how you do it? do you transfer your technology? >> no, we have technology agreements in place and we do cooperate in china. for example we open up a new 737 finishing center in china which will take delivery of airplanes from the us and install interiors for final delivery to chinese customers. that's the cooperation that creates a win-win scenario. maria: important market. how do you want to see this president deal with the chinese then? i know you want the streets back to end as soon as possible but
there are real issues whether it be the theft of intellectual property or opening up their markets to us businesses what should the us do right now? >> it's for to address the mental trade issues. for issues on besides but i also think there's a constructive dialogue that can bring those to closure. i'm encouraged by the productive nature of the conversations going on. i thank you have heard recently president trump and president xi are talking and we anticipate around the g20 summit there will be additional dialogue and hopeful that we can come to a constructive solution. maria: troubling story and a fatality with hundreds of 89 people dead after the lion aircraft in indonesia. there is an article in the wall street journal this week basically saying that boeing held back on the risks and the pilot did not understand the risks with the 737. what is your response to these accusations that boeing is at fault here? >> first of all, it's a board we express our some of these for those affected by this air flight in our thoughts go with
all the families of the been affected i those on board. we are fully cooperating in the investigator process and engaged in providing all the information and being transparent on that topic. support for us to fully support that investigation and i think the real bottom line in key is 737 is safe and were confident in that safety is a core value for our industry and company. always has been and always will be. >> was their change in terms of the model, the 737 that was articulate it to the pilot of the airlines that they did not know how to respond in the event of a change and that's what the charges are. >> 737 max has capabilities that are embedded in it and that's included in the training process we go through. airplane has gone through thousands and thousands of hours of testing insulation working with our pilot and ensuring they have all the information they
need to safely operate the airplane and in some cases new systems are designed to take advantage of the capabilities of the airplane and we've issued a couple of follow-up bulletins coming up out of the investigation with the pilot to existing flight procedures to handle the scenarios we are talking about in this incident. we continue to do that. it's important that we provide all the information needed to safely operate these airplanes. maria: flight went down minutes after takeoff from jakarta. good weather what did the journal get wrong? >> you saw the indonesian authorities identify some medication there was an error in the angle of attack signal. this representative is the attitude of the airplane in the air and in that scenario airplane has capability to deal with that data error and there's an existing islet procedure. we have provided all that information so this is information that we are being transparent with reinforcing and indicated into bulletins we put
out point back to existing flight procedures. maria: we make any changes to the 737 given the lion air air crash and will you be making changes in terms of the way information is communicative to the pilots? >> we will continue to stay engaged. it's important to note on a daily basis we work with our operators and pilots around the world making sure they have information they need to safely buy these airplanes. we will continue to be very much engaged and cooperative in the medication is information becomes available. we will make agreements as needed and bottom line is were committed to safety and we know with great confidence the 737 max is a separately. >> boeing has been soaring over the air the last year but the company ceo and chairman tells maria when wall street returns.
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>> we see traffic growth around the world is tremendously strong going six or 7% a year, cargo strength is also return your today going at 4% a year so those growth trends are outstripping global gdp much is driven by the rising the class around the world and fueling growth in this industry. ramping up production on the 7 737, ramped up to 52 a month and ramping to 57 months next year. while we are doing it were bringing new innovation and capability. 737 max but also working on the next generation of wi-fi. it's been very successful in retaking that up to 14 month production rate actor.
maria: wi-fi is important for the middle east and other areas of the world. >> globally. triple 7x working on will go to flight testing after in first delivery in 2020 right on schedule. that's important for customers of the asia-pacific region as well as middle east and here in the us. maria: at the same time are worried about the global boom slowing down. higher interest rates and the dollar has been a factor in when companies and countries by these planes they are borrowing in many cases the interest rates does a slow down your business? >> we not seen it put on our business and traditionally we have not seen interest rates be a big driver on our customer decisions but it's much longer term timeline and a backlog today of about 5800 commercial airplanes that's the equivalent of about seven years of backlog so our customers tend to make long-term decisions that are as much influence by local interest rate fluctuations or oil prices.
today we are selling airplane 737 maxes in our production skyline out in 2023 and beyond. that's the long-term head of this business and the fact that we have that healthy backlog really allows us to think about long-term investment in the business to sustain growth. maria: one of your goals has been to make sure this business is not to the google. >> for the first time ever get backlog measured in seven years instead of two. making long-term investments, discipline in production rates savanna mentally structure of the business has changed. maria: do you see clouds on the horizon? >> no, it's the long-term sustained growth business. it's been fueled by passenger growth around the world and we see that as a decade-long trend. were also growing in our service business which is we talked about is a significant additional capability for us. our biggest single growth opportunity and services to its nature as a non-technical
business. part of the sustained growth model that we built and we launched our new services businesses at a year and a half go in your today it's been growing at 12% a year compared to market growing it to present here. competing and winning services and see our defense business is strong. one of the unique things of boeing we span commercial services and events and that's providing unique, competitive advantage on the world. >> which is why you've been such an increasingly dividend payer and background stacked because cash is king and you're able to elaborate any threats to the dividend or coming down? >> this is a strong cash generation business. this is year over year cash growth going forward in our cash diplomat strategy is - we want to invest in innovation and the next range of products and our second most important part of that strategy is increasing
dividends and repurchasing shares of stock. the healthy for company and investors goes right back to our people. thirdly, we use cast to selectively make acquisitions of the lot strategy so that cash department strategy has been consistent in tabletop and bottom growth. maria: we've seen averted acquisitions in the supply side of your business and does that take up? >> we targeted areas that we call vertical. this past week we announced joint venture and auxiliary power units and this is example that can grow in our service business when you think about what's valuable to our customers look through this lifecycle lens. that only how do we design but postelection is for them to provide value to our customers. that's what we're seeing strong growth. >> stay tuned for more of the interview with ceo and chairman of boeing when wall street returns.
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cut spending? defense or entitlement like social security et cetera? are you worried you will see defense spending cut and does that impact your business? >> we see the us defense budget is being a stronger position than it's been in for many years. if you recall we were dealing with sequestration and tough taccone and cuts to the defense budget missing rebuilding straight there and there's an acknowledgment that are us defense forces need the new capabilities in the modernization and readiness. we'll play close attention to the budget discussions going on and make sure our customers are getting value for the money they're spending but we see defense is a strong going business for the future and not only here in the us but outside the us. a third of our bad luck today is outside the us. maria: interesting. many programs tell us about the big important programs you are working on. >> several but we are building a new taker for the u.s. air force and headed toward first delivery of that later this year.
we talked a bit about p8 maritime surveillance built on a 37 platform but anti- summary mission for an 80 customer and we delivered the hundred airplane and we work on a whole range of new products including the new tx trainer for the air force and new and cute 25 drone for the u.s. navy. fantastic innovation happening all around us. maria: and has agreed not to mention, air force one. present wanted a new updated air force one did you give him a deal on that? >> we got to a good deal. tough negotiation but we are honored to provide air force one. it's a big different part of what we do and it's a privilege we have as a company to take it seriously. beyond that were working on new innovations in this whole field of autonomous airplanes and how we can bring that to the future is a tremendous opportunity. we are working on solutions for urban congested areas and think about buying taxes for the future and bringing together
artificial intelligence and autonomy. even earlier this week we launched a new solar powered autonomous aircraft, odysseus, 300-foot wingspan so think about football field size wingspan that can fly up in high altitudes and solar powered green airplane. maria: i don't know if i'll get on that plane but solar powered and also autonomous. no one is flying the plane at any given moment. >> yes, autonomous airplane. that wave is coming. this technology is advancing quickly. maria: don't you worry it could get hacked or what are the risks in that? >> that's why we bring the network in technology so is not about just designing the vehicle but wraparound system to ensure it safe and secure and reliable. that includes cyber security but air traffic management system and the complexity of having unmanned and piloted vehicles in the air over congested cities and those are the new technologies we are working on
to bring artificial intelligence technology to play to bring new markets into being. maria: fascinating suffered all this financial power is given you the ability to get back in a big way and this year boeing will get back a quarter of the billion dollars. maria: it's a big proponent of tax form. as a bone company we take a lot of pride in getting back to our communities. on the heels of tax form we announced $309 gift that we were going to make charitable efforts investing in workforce investing in workplace and this week we announced an additional $55 of charitable gifts to more than 440 organizations benefiting as a result. these are principally in the areas of supporting veterans and their families and areas of stem education so these are great areas for us to invest in a talent in future and take care
of our men and women in uniform as it is her. maria: dennis, great have you. >> thank you, maria. maria: dennis, chairman and ceo of the boeing. don't go anywhere, more wall street after this. we saved hundreds on our car insurance when we switched to geico. this is how it made me feel. it was like that feeling when you're mowing the lawn on a sunny day... ...and without even trying, you end up with one last strip that's exactly the width of your mower. when you're done, it looks so good you post a picture on social media. and it gets 127 likes. geico. fifteen minutes could save you fifteen percent or more on car insurance.
maria: welcome back. coming next week, federal reserve bank of dallas, robert kaplan is my special guest. last time i spoke with robert he told me we will see a real slowdown in growth. we need to get an update from mr. kaplan on where we are in terms of economic growth that he will join us right here next weekend. plus, i will see you this sunday morning on fox news channel for sunday morning features. join at 10:00 a.m. eastern we have a special lineup this weekend. start smart weekdays on foxbusiness, 6:00 a.m. until 9:00 a.m. mornings with maria
and i hope you will join us every weekday. that'll do it for us this weekend. thank you for being with me. have a great weekend. see you next time. >> welcome to women and money. 40% of american women are the breadwinners for the families and have more power and response ability than ever before. there's a lot to navigate from dealing with practical money and investing issues to how to handle tricky career situations. i'm deirdre bolton and i have invited amazing, successful guests who are at the top of their field. they will share what they learn and put on their mentor has an insert tough business and related personal questions. the show is for all ages, stages and for people in all industries. my guest is carla harriic