Los Angeles – On Friday, Aviation Week reported that Boeing was expected to announce plans to settle a completion and delivery center for the 737 in China. The deal is expected to be circulated for public’s’ scope on September 23 when China President Xi Jinping visits the United States .

The airplanes manufacturers have refused to comment about the deal, but it’s thought it has been under discussion with China for a long period now. Apparently this unknown decision took by surprise elected officials, unions and industry leaders in Washington state. The governor’s office, labor leaders and industry associations said they were not aware of Boeing’s schedule, according to a report from Reuters.

Credits: RedStatements

Although Boeing hasn’t shared any details, concerns by the International Association of Machinists District 751 have been shown due to the fact that they fear about the potential option of job losses. The only statement Boeing has provided said “One way we do this is by working with partners around the world, including China, our largest international market. However, we don’t comment on options we may be exploring.”

What’s expected from this deal?

Boeing will probably occupied unfinished aircrafts straight off the Renton, Washington assembly line which has currently over 12,000 employees, about half of which are in production. The Aviation Week Network said it is believed that the company completed:

“Painting, flight testing, delivery certification and customer acceptance. Interior installation, including sidewalls, galleys, seats and cabin features, are currently completed for all current 737 Next Generation aircraft on the moving line at Renton, and it is not known if this will continue for all MAX models or be split in some cases with the new site.”

This deal between China and Boeing would represent a smart move for the company and it would increase their global sourcing of aerospace parts and supplies because of the improvements. Making this kind of deals with other countries could be a favorable option for Boeing’s if they are willing to win sales competitions with European rival such as Airbus Group NV. Nonetheless, Boeing preferred to keep final assembly within the United States, rather than adopt the Airbus model of opening production lines in key overseas markets

In fact, the Airbus which is a U.S $600 million factory, and its first United States final assembly line, will be inaugurated this weekend in Mobile, Alabama. The Airbus facility allows them to contract american citizens, just like foreign automakers did after setting up their assembly plants in the United States.

Moreover, Boeing has also trust in the past in foreign suppliers to help cement sales relationships. The agreement included three Japanese industrial giants who take charge of producing a significant part of both 777 and 787 aircraft from Boeing. Japan has replied by being only Boeing customers, which gives the company the exclusivity.  

Business Perspective

Aviation Week believes that the beginning of this new facility will build on Boeing’s already close and extensive existing relationship with China, which currently makes the horizontal stabilizers, vertical fins, aft tail sections, among others components of the 737 model, as reported. The foreign sellers will also supply parts for the 747-8. Furthermore, Xiamen, China is the first conversion location for the 747-400 Boeing Converted Freighter program.

Source: Aviation Week