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Strategic Business Plan

Strategic Business Plan. Boeing - Hydrogen Fuel Cell Technology. Paul Claybrook, Andrea Arnett MBA 540 June 21, 2009 City University Peter Malacek, MBA. Boeing – Global Strengths. Founded 1916 - Puget Sound region of Washington state Headquartered in Chicago, IL

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Strategic Business Plan

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  1. Strategic Business Plan Boeing - Hydrogen Fuel Cell Technology Paul Claybrook, Andrea Arnett MBA 540 June 21, 2009 City University Peter Malacek, MBA

  2. Boeing – Global Strengths • Founded 1916 - Puget Sound region of Washington state • Headquartered in Chicago, IL • 2008 Revenue= $60.9 Billion • 160,000 associates • Global player – 70 countries • Two business units supported by Boeing Capital • Financial Services • Shared Service Group • Two business units • Commercial Airline – WA • Integrated Defense Systems - MO

  3. Reasons for Alternative Fuel Source • Cost of fuel • Approximately 30% of airlines’ costs • Sporadic/unpredictable price of fossil fuel • Reduced environmental footprint • Enormous saving • Great opportunity for Boeing

  4. : Cost of Fuel • The Boeing 747 uses approximately one gallon of fuel every second or about 36,000 gallons on a ten hour flight (Answers.com, 2009) • Prices are expected to increase, but assuming current values, it would cost airlines approximately $3.50 per second, or $126,000 to make a 10 hour flight • This represents an enormous cost for them http://www.speedlimit.org.uk/petrolprices.html

  5. Future of Fuel • Hydrogen as an energy source may be the fuel of the future, but currently 95% of the hydrogen that is produced comes from natural gas • This drives the price of hydrogen high enough to negate it as a practical alternative fuel (Ward, 2006) • Scientists recognize extracting hydrogen from water would be the simplest and cleanest way of producing hydrogen, but until recently, this was a very expensive process • One new technology, the electrolyzer, replaces tooled metal with a moldable, high tech plastic called noryl. This makes the practical costs of producing hydrogen approximately half of an equivalent amount of fuel (Ward, 2006) • Technologies will improve over time and the cost of hydrogen will decrease even further. • Oil prices will likely continue to climb along with instability in many oil producing nations.

  6. Hydrogen Fuel Gaining Popularity Environmentally harmless. Reduces reliance on hostile energy producing nations. Increasing innovation will make hydrogen the fuel of the future; powering cars, buses, and airplanes at a lower cost than skyrocketing fuel prices. Use of hydrogen is increasing across the globe such as in California, one of the first states in the U.S. to take a proactive approach to inviting the inevitable fuel source of the future into daily life. One gallon equivalent of hydrogen delivers more energy than one gallon of jet fuel, but comparing the energy output equivalent, the cost of using hydrogen would be only 38% of the cost of jet fuel. Previously, the relative fuel cost for a 747 flight was approximated at $3.50 per second or $126,000 for a 10 hour flight. Using hydrogen, that same airplane would cost $1.38 per second to fly and only $48,461 per ten hour flight.

  7. Projected Cost of Hydrogen Fuel • Projected price of hydrogen (Vanderveen et al, 2006). Notice the trend is almost flat over the 44 year period. • This does not include future innovations for producing hydrogen even more cheaply

  8. Conclusion Alternative fuels provide many advantages over fossil fuel such as availability, environmental friendliness, and reduced dependence on hostile countries. The most tempting aspect of alternative fuel for companies is cost savings. Hydrogen is the fuel of the future for ground and air travel. It will benefit any airplane manufacturer to begin production of these aircraft now. Struggling airlines will clamor for the opportunity to purchase aircraft that will cost a fraction of what they are now paying to fuel them.

  9. Questions

  10. References Boeing.com (2009). Retrieved June 2, 2009. Website: Boeing.com. Vanderveen, K. et al (2006). Projected Hydrogen Cost from Methane Reforming for North America 2015-2050. Retrieved June 2, 2009. Website: http://www.cder.dz/A2H2/Medias/Download/Proc%20PDF/PARALLEL%20SESSIONS/%5BS24%5D%20Benchmark/13-06-06/418.pdf  Ward, Logan (2006). Cheap Hydrogen: GE’s Low Cost Electrolyzer. Retrieved May 30, 2009. Website: http://www.popularmechanics.com/science/research/4212844.html

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