As the House and Senate move closer to passing tax reform, Boeing Chairman, President and CEO Dennis Muilenburg told CNBC that he sees the effort as critical to economic growth.
“I think tax reform is the single most important thing we can do in this country to unleash economic energy. It’s going to unleash growth,” Muilenburg told “Mad Money” host Jim Cramer in an exclusive interview on Thursday.
Corporate tax cuts would be particularly good for Boeing, which had a 23 percent effective tax rate in 2016, according to the non-profit Institute on Taxation and Economic Policy.
GOP lawmakers are aiming for a 20 percent corporate tax rate as they work to settle their differences on Capitol Hill.
Muilenburg said that the global aircraft manufacturer would put the additional cash to work mainly by boosting its $6-billion-a-year research and development budget.
“First thing we’re going to do with the benefits of tax reform is we’re going to invest in innovation,” the CEO said. “We’re going to invest in capital, new product lines, it’s going to create more manufacturing jobs and our shareholders are going to benefit, too. We’re going to improve dividends, share repurchase. But No. 1 use of cash here is invest in innovation for the future.”
Things between Boeing and the federal government weren’t always so rosy. One year ago, President Donald Trump criticized the aerospace giant for the cost of its Air Force One program.
Shares of Boeing and other defense contractors declined on the news. But after its initial weakness, Boeing’s stock caught fire, rallying over 80 percent in the last 12 months.
And by Muilenburg’s account, not only the stock has been strong.
“The thing I love about President Trump is he’s really focused on helping business succeed. We’ve got open communication lines,” Muilenburg told Cramer.
“I think the work on tax reform, the work that’s being done on regulatory reform is very important,” he continued. “And just having a seat at the table, I think, is so important for business today as we think about what’s going to benefit the economy of this country, how we’re going to create great manufacturing jobs. That’s right in our sweet spot. That’s what we do as a company.”
This year, Boeing expects to build about 750 airplanes. By the end of the next decade, Muilenburg expects that to grow to 900 planes.
“That’s manufacturing jobs, that’s economic growth, that’s economic energy,” he said.