The announcements coincided with a visit to the U.S. by China’s President Xi Jinping, who toured Boeing’s Washington state factory on Wednesday. The total package is worth $38 billion, Boeing said.
Advertisement
Boeing CEO Dennis Muilenburg confirmed that the company is already making preparations to set up a facility in China and will transfer jobs there, according to Reuters.
State-owned Commercial Aircraft Corporation of China (COMAC) also signed an agreement with Boeing Tuesday to set up a “completion centre” in China for its 737 airliners, Xinhua said.
Bloomberg News reported earlier this month that Boeing was exploring whether to open a factory in China to perform tasks such as painting its top-selling 737 jetliners, which would be its first such facility outside the US.
The 300 orders are mostly for 737s.
Today in a letter to employees, Ray Conner, head of Boeing Commercial Airplanes, said China is not only the company’s largest worldwide customer, but…”will become the largest commercial aviation market in the world – and a key to production, growth and jobs in the Puget Sound region”. Since 2009 Airbus has operated a final assembly line near Beijing for its A320 planes and recently agreed to build a completion center for its A330. More than a dozen years ago, the company moved its corporate headquarters to Chicago; in 2011, it opened an assembly plant near Charleston, South Carolina, where it now builds the 787 Dreamliner jet. Boeing is now a Zacks Rank #2 (Buy), but an increase in the business it receives from China could mean that the stock could be thought even more highly of in the future.
Boeing has sold 155 airplanes a year ago in China.
Analyst Mohshin Aziz. “The emerging middle class in China is helping to boost demand”. Labor unions have voiced opposition to the plan with the Machinists union demonstrating outside Boeing’s Everett plant in Washington on Wednesday.
The affected American workers believe that they will lose their jobs as the plane company will transfer its factory in China and their work will be taken over by the Chinese nationals.
Advertisement
Boeing Co (NYSE:BA) predicts that China airlines will have to add up to 6,330 new planes by 2034 to cater for the fast-growing travel industry. The same is true of production of Boeing’s current version of the 777, and that leads to speculation that some of those planes are also included in the new Chinese order.
