Unions Wary

It's a big step for Boeing -- farming out the bulk of wing construction on its 7E7 Dreamliner to a firm in Japan. But then, the aircraft itself is seen by the company as a truly international effort.

The Seattle Post-Intelligencer reports Boeing has never allowed a contractor to take the lead in building wings for its commercial aircraft. But it could be a big marketing ploy in a world where America isn't viewed with the same benevolence that it was in decades past.

But it's more likely a concession to the vital Japanese market for commercial airplanes. "To put it simply, Japan is one of the last jewels left in Boeing's crown," said Richard Aboulafia of the Teal Group, an industry consulting firm in Fairfax (VA). "There is nothing like Japan in terms of market size and market loyalty and industrial loyalty," he said.

"The Japanese have done a very good job over the years and have just strengthened the relationship with Boeing," said Peter Jacobs, an industry analyst with Ragen MacKenzie.

"Playing the Japanese card is not just an offensive move for Boeing, it is a sound defensive move as well," Aboulafia said. "Look at the A380 business case and the importance of Asia. If Boeing can keep Japan out of that, they are really doing some damage to the A380 business case."

Japan's two biggest airlines, All Nippon Airways and JAL, are expected to be 7E7 launch partners. Other international airlines are sniffing around, but none has so far made a commitment to the project.

Still, unions in the Puget Sound area, where the aircraft will undergo final assembly, are wary of the deal. They see the Japanese partnership in terms of 1,000 jobs lost here in the US.

The Post-Intelligencer quotes Boeing plant worker Bill Barrett, who says, "The company doesn't even view it (the 7E7) as an American-made product."

Japan won't get contracts for the entire wing assembly. The paper reports some of it will be done by Boeing at its facility in Tulsa (OK). Boeing's Wichita (KS) division, which includes the Tulsa operations, will make the 7E7 nose section and cockpit. The company's Winnipeg division in Canada will manufacture the wing-to-body fairing. The aft fuselage and the horizontal stabilizer assembly, except for the vertical stabilizer, will be constructed by both Alenia Aeronautica in Italy and Vought Aircraft Industries in Texas, sources told the Seattle paper. Some fuselage work has not yet been assigned.

"One of the many reasons that Boeing absolutely needs to launch something new is to keep the Japanese in their camp," Aboulafia said. "If the Japanese can get good technical and industrial transfer terms from anyone else, they will do so and leave Boeing."

FMI: www.boeing.com