BOEING CEO MEETS WITH POLISH MINISTER OF TREASURY

UNCLAS WARSAW 000985

SIPDIS


SENSITIVE

STATE FOR EUR/NCE TARA ERATH AND MICHAEL SESSUMS
USDOC FOR 4232/ITA/MAC/EUR/JBURGESS AND MWILSON
USDOC FOR 3133/USFCS/OIO/EUR/TMOORE
USDOC FOR 3150/USFCS/OIO/CEE/MCOSTA
TREASURY FOR OASIA MATTHEW GAERTNER AND ERIC MEYER
FRANKFURT FOR TREASURY FOR JIM WALLAR
STATE PASS TO EXIM BANK FOR DAVID FIORE

E.O. 12958: N/A
TAGS: EAIR ETRD EFIN PREL PL
SUBJECT: BOEING CEO MEETS WITH POLISH MINISTER OF TREASURY

REF: A. WARSAW 0971


B. WARSAW 0921

C. WARSAW 0913

D. WARSAW 0749

This cable is sensitive, but unclassified: not for Internet
distribution.

Summary
--------------


1. (SBU) Boeing CEO, Harry Stonecipher, met with the Polish
Minister of State Treasury, Jacek Socha, on February 18, to
discuss Boeing's activities in Poland. The meeting centered
on LOT's tender for long-haul aircraft and also touched on
Boeing's plans to cooperate with Polish companies for tooling
contracts for the 787. Socha said that politics will not
influence the decision on which aircraft LOT purchases.
Stonecipher told Socha that there was no firm deadline for
when Boeing would pull the delivery slots for LOT's 787s.
Stonecipher and Boeing sales executives were pleased with the
meeting, declaring that it couldn't have gone better. End
summary.


Long-Term Commercial Impact the Key
--------------


2. (SBU) Henry Stonecipher came to Poland on February 18 to
meet with GOP officials, including Minister of State
Treasury, Jacek Socha, who is likely to have an important
role in LOT's decision making process. During the meeting,
Minister Socha acknowledged to Stonecipher that to stay
competitive LOT needs new aircraft. He said that the 767s
that LOT currently uses are good but "getting old."
Stonecipher explained to Socha that Boeing was ready to
address any problems or questions that LOT had regarding the
financing of the aircraft, even if that required Boeing to
finance part of the purchase itself. Socha quickly responded
by saying that the financing aspect of the deal was a
non-issue. Instead, Socha said the largest factor on which
LOT's supervisory board would make its choice was which
aircraft offer made the most long-term commercial and
financial sense for the airline. LOT Airlines has not made
money for the past two years and, as the competition from
low-cost and other flag carriers increases, the airline needs
to purchase aircraft that will give long term profitability.


A Commercial Decision
--------------


3. (SBU) Stonecipher said he hoped that LOT will be able to
make its decision based on the commercial merits without
political interference. Socha bluntly stated that politics
will not play a role in LOT's decision.


Timing
--------------


4. (SBU) Socha asked Stonecipher how long Boeing would hold
the delivery slots of the 787s for Boeing. Stonecipher
responded rather obliquely by saying that he would give
Poland until sometime in March if a deadline was needed to
force a decision, but he emphasized that Boeing is very
interested in working with LOT. He said that LOT advised
Boeing on designing and planning the 787 Dreamliner, and that
Boeing will try to work with LOT without putting down hard
dates.


Production Cooperation
--------------


5. (SBU) Stonecipher and Socha discussed Boeing's plans to
place several tooling contracts with Polish companies.
Stonecipher said that future cooperation with Polish
companies to provide machining work might also be possible.
Socha asked if these contracts would be conditional on the
sale of the 787 to LOT. Stonecipher said that both Boeing
and LOT preferred that these contracts not be tied to the

sale.


Increasing Boeing's Presence on the Ground
--------------


6. (SBU) Stonecipher also told Socha that Boeing plans on
opening an office in Warsaw within the year and will have a
permanent representative on the ground. Socha was pleased to
hear this and said that Boeing should have already done so.
(In a conversation earlier in the week with Econoff, Socha
acknowledged that Airbus representatives have been very
active in Warsaw over the past 5 months (reftel B).)


Comment
--------------


7. (SBU) Considering the Polish government owns 68% of LOT
aircraft, we expect the Ministry of State Treasury will play
a key role in determining LOT's final decision on which
aircraft it will purchase. We're pleased Stonecipher came
and met Socha as this helps demonstrate Boeing is committed
to winning the deal. We are also pleased that Socha was so
clear in stating this deal will be decided on the commercial
merits. As recent press articles make clear, however, Airbus
is pushing hard. Boeing will have to keep up its efforts to
lobby LOT and the GOP on the commercial issues. End comment.

MUNTER


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2005WARSAW00985 - Classification: UNCLASSIFIED