Ratings on Chicago, Ill.-based Boeing Co. are supported by its very strong position in defense and military space sectors that have moderately attractive growth prospects; its position as one of two global producers of large commercial aircraft with generally favorable long-term fundamentals; efficient operations; and expected good overall financial performance, especially solid cash flow generation and liquidity. Concerns include currently weak demand for commercial airplanes, sizable unfunded postretirement liabilities, and ethical lapses in the defense and space segment that have endangered some key programs. Of particular concern are ongoing investigations pertaining to Boeing's important contract for 100 aerial refueling tankers, now on hold, following the discovery of improper conduct involving two members of its management. Moreover, the Air Force has
