Jason Gursky: Good morning, everybody. Brian, just a quick clarification question and then one over on the services business. And a clarification, you mentioned that margins at BDS tick up in ’23, but don’t get back to the long-term margin rates that you expect are on a normalized basis. Just curious what the milestones are going to be for us to be watching out for on getting back to those normalized rates? And then on the services business. Maybe just a little bit more color on expectations for ’23 with regard to your expectations on growth rate and margins? Thanks.
Brian West: Yes, sure. On the BDS. So as you mentioned, long term, high single digits, is what we’ve talked about. But in the near term, the same kind of supply chain constraints and labor availability that we’ve talked about in the BCA world, impact the BDS role as well. So when the current environment is less constrained and stabilizes, that will be a benefit. We expect it to happen partly in 2023, but the key thing to watch is just the stability of the supply chain is going to be a big, big deal that we’re keeping our eye on. And that’s going to be important as margins will tend to accelerate. The time and the pace remains to be seen, but it will get better in 2023. On the services side, so we had a big year for the services business.
It’s going to have to — and part of that was based on the commercial recovery, and we enjoyed the benefit of that in 2022. But BGS, in terms of their revenue, they finished the quarter at a pretty good spot pretty clean basis. And if you just kind of think about that as how you would extrapolate into 2023 by quarter gives you a pretty good view of where we see that growth coming for. So it will grow, margin will be just fine right within that mid-teen levels that we’ve enjoyed. So we feel pretty good about the prospects of the service business, very stable, continue to grow, no surprises.
Jason Gursky: Great. Thank you.
Operator: Next, we’ll go to Ron Epstein with Bank of America. Please go ahead.
RonEpstein: Good morning, everyone. Just circling back on thinking about product development and so on and so forth. Like you mentioned at the Investor Day that Boeing wouldn’t be going forward with a middle of the market product probably until sometime in the 2030s. How should we think about that in light of the recent win with NASA on the — that you trust based — the trust brace transonic win program and what that means? Could that be some early technology on a new platform? Or what are you looking for to happen in the technology world to feel confident about doing something new?
Dave Calhoun: Yes. So Ron, I’m going to highlight three things that I think are going to contribute to a truly differentiated new product. One of them is the trust wing, so I’ll refer to that now. As you know, that is technology that’s been worked on for the better part of a decade alongside of NASA. And the program that we’ve embarked on here is how do you commercialize it? How do we put it through the right set of tests, et cetera, so that, in fact, can be incorporated into new airplanes? So there’s real intent there to be able to do it. I’m not sure it is going to be as good and/or applicable for middle of the market and/or a wide-body, but it will definitely have a role to play someday in the narrow-body world. So that’s number one.
Number two, you’ve heard us talk about the digital thread being able to create the digital model, not just for the airplane, but for the factory and for the servicing. But we are really cutting our teeth on a couple of defense programs that, frankly, we’re learning a lot every day, all day, so that whatever we do on that next commercial airplane will incorporate the digital threat. And it will be way more mature than what it’s been so far in our discrete defense programs. So anyway, I feel very good about that. And then the last major element has been the one that usually carried the day, but in this case, I think will simply contribute to a better day and that’s propulsion technologies, bigger bypass ratios, and you probably know a trusting setup, trusting setup will create that opportunity to a far greater extent than today’s wing simply because of the distance from the ground.
So there are lots of reasons why I think these technologies can and will be proven and ultimately adapted. And when you’re considering a 50-year kind of program for any new airplane, you have to think about this. And in our view, the objective has to be somewhere between 25% and 30% better than it is today. And that’s what we’re focused on. And I think we have the time to do it and the technologies to play out.
Ron Epstein: Got it. And if I can, just a quick detailed follow-on. What are you thinking about headcount productions as we go — headcount projections as we go into ’23? I mean how has it been in the labor market kind of across the supply chain, which you hear is everybody needs more people. And how has it been for Boeing? And what are you doing to try to cross that bridge?
Dave Calhoun: Yes. Ron, I want to be clear. We have had no trouble hiring people, none. We’re sort of at or a little above where we were in the days you guys all remember because we’ve got so many of these rework apparatus going on, and there are a lot of people required to do it. So our job is to actually just take what we have, incorporate all the learning from the folks who are doing the rework that will displace whatever retirements and or demographic issues that we have over the next couple of years. We have a pretty good setup on labor and a pretty good mechanism ironically with these return to service aircraft and the joint verification, a pretty good mechanism to train mechanics, train our people to do the job. And on the engineering front, man, we’ve had a real good run hiring is over 10,000.
Our job is to make sure that we just train them right, get them involved early and get on the life. So we are not facing a big demand. Our supply chain probably still is working the hiring a bit, but it’s nowhere near as important as their — the training of the people that they’re bringing in. I’ve seen this thing really ease up in the last year, like really ease up. Tier 1s, I doubt any of them are really fighting for talent anymore. And underneath that, I think the supply chains are filling out. It’s all about now that training and development.
Ron Epstein: Got it. Thank you.
Operator: And next, we’ll go to Rich Safran with Seaport Research Partners. Please go ahead.
