Boeing To Set Up Plant In China Amid Layoff Fears In America


Boeing To Set Up Plant In China Amid Layoff Fears In America

Boeing is building its first completion center on foreign territory: China. The new plant in China will increase the plane manufacturers’ global presence and production in a region where European rival Airbus already has a head start.

Dennis Muilenburg, Boeing Chief Executive said on Tuesday that they would be adding a plant in China for its 737. The company said the new plant was aimed at increasing production for its single lined jet liner.

The announcement comes just days after Boeing announced the completion of the sale of 300 Boeing aircraft to the Asian country. China state-owned Commercial Aircraft Corporation of China (COMAC) confirmed the purchase of the 300 aircraft and the setting up of the “completion center” in China.

Boeing chairman Jim McNerney said, “China's rapidly growing aviation market plays a crucial role in our current and future success."

China is expected to grow its fleet by 6,330 aircraft valued at $950 billion by 2034, an annual China Market Outlook from Boeing read last month.

A statement from COMAC said, “This shows cooperation between Boeing and a Chinese enterprise has been lifted to a major-manufacturer level.”

The new plant in China, however, has elicited worry in the U.S., especially for the Seattle-based firm’s workers. The workers’ largest union, representing over 35,000 employees, said they were concerned over possible layoffs following the announcement. The union expressly said, “Any shift of aerospace jobs from our bargaining unit or Washington State causes grave concern."

Boeing’s management sought to allay fears of layoffs through an internal memo circulated by Boeing Commercial Airlines Chief Executive Ray Conner. The memo read in part, "I hope (the discussions) will be a win for Boeing, a win for the Puget Sound, and a win for our stakeholders. I want to assure you that agreements we may reach with our Chinese partners will not result in layoffs or reduce employment for the 737 programme in Washington state."

Airbus already has a plant in the port city of Tianjin, China, where it assembles its medium range Airbus 320. It has expressed plans to complete another plant for completion and delivery of long-haul A330s.

Boeing is capitalizing on China’s growing economy and appetite for aircraft by setting up shop right in the country’s mainland. The company hopes that the new plant will result in increased revenues and a better competitiveness against competition.

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