I also read the book Mr. Sciolistes mentions, "How Boeing Defied the Airbus Challenge" by Mohan R. Pandey, a retired Boeing executive. The book says rather than re-engining the 767 to compete against the A330, Boeing came with a brand new 777 in the 1990s. The 777 killed the A340, and badly hurt the A330. According to the book, the 777 saved Boeing.
In 2011, Boeing is facing a similar situation with the new Russian UAC's MS21, Chinese C919, Bombardier's C-series and the recent Airbus decision to re-engine the A320 family.
Boeing has the option to re-engine its 737 to get similar fuel efficiency or change the game by coming with a new airplane to replace the 737. And make Airbus sweat.
The How Boeing Defied book says the only option Airbus has is to re-engine the A320, as its engineering resources are occupied with A350, A400M and A380 problems. On the other hand, Boeing will have the 787, 747-8 engineering resources freed soon to work on a new airplane. If Boeing comes with a new airplane to replace 737, Airbus will have nothing to match Boeing for nearly five or six years. That would be a great advantage for Boeing. No amount of subsidy may help the Airbus situation with the engineering resources.
Reading the media coverage, I did not come to the same conclusion as Mr. Kiwi Grey ("Apparently, the WTO say that Boeing are at least as bad as EADS on the subsidy front. So that argument pretty much washes both ways."). They both may be tainted but according to the media the Boeing subsidy is a fraction of the subsidies given to Airbus. Mr. Grey, please correct me if I read the story wrong.
As to financial situation, I generally agree with Mr. Grey's assessment of Boeing, but I am not sure if Boeing is in a worse shape than Airbus. I think they both are in the dumps. According to this book, Airbus is still bleeding on the A380; further, Airbus was never able to command a good price for the A380. All the compensations for the delays have not helped. A350 was late in the scene and to grab some of the market from the 787, Airbus had to sell the airplane at fire sale prices.