After 19 months of detailed negotiations, Boeing yesterday officially hired Japan's largest aerospace suppliers to build more than one-third...

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TOKYO — After 19 months of detailed negotiations, Boeing yesterday officially hired Japan’s largest aerospace suppliers to build more than one-third of the 787 Dreamliner.


The deals represent a dramatic increase in the quantity and quality of Boeing work outsourced to Japan. Japanese manufacturers will build 35 percent of each 787 airframe, up from 21 percent of each 777 and 16 percent of each 767.


And for the first time, an external supplier — Mitsubishi Heavy Industries — will design and manufacture the wings of an all-new Boeing jet.


“In the development of new aircraft, it is impossible to overstate the importance of our great partners here in Japan,” said Mike Bair, Boeing vice president and general manager of the 787 program, at a news conference at Tokyo’s Park Hyatt Hotel.


But financial terms of the arrangements among Boeing, the Japanese companies and Japan’s government remained as murky as ever.


Boeing announced in June 2003 that it planned to enlist Japan’s Mitsubishi, Kawasaki Heavy Industries and Fuji Heavy Industries, as well as Alenia Aeronautica of Italy and Vought Aircraft of Texas, as airframe partners for the all-new 787, which will carry 200 to 250 passengers.


A memorandum of understanding allocating 35 percent of the project to the Japanese companies was inked in November 2003, and the companies have been hammering out the details ever since.


Officials at the news conference yesterday continued to sidestep the three biggest questions hovering over the deals:


• How much financial support will the Japanese government provide to Japanese suppliers?


“That is something for the Japanese government to consider,” said Kyoji Takenaka, chairman of Japan Aircraft Development Corp., an umbrella organization that coordinates the activities of the Japanese suppliers.


The European Union has alleged Japan will provide $1.6 billion of loans and subsidies for the 787.


• How much of their own money are the Japanese suppliers investing in the project?


“It’s still under consideration,” said Shinichi Suzuki, executive officer of Kawasaki Heavy Industries.


• How much revenue do the Japanese suppliers stand to gain from the deal?


“The final number is still being worked,” Takenaka said.


Mitsubishi, Kawasaki and Fuji will do the bulk of the work at aerospace plants in and around Nagoya, Japan’s manufacturing hub. All three are constructing new facilities to accommodate the 787 work.


A fourth Japanese company, Shinmaywa Industries, will be a subcontractor to Mitsubishi.


In addition to Mitsubishi’s work on the wings, Fuji will provide the center wing box and will integrate the wings with the plane’s main landing gear. Kawasaki will build a section of the fuselage behind the cockpit as well as the trailing edges of the wings.


Mitsubishi, Kawasaki and Fuji collectively have 260 engineers in Everett collaborating with Boeing engineers to finalize the 787’s design.


Nobuo Toda, managing director of Mitsubishi Heavy Industries, said that in addition to the 100 Mitsubishi engineers in the Puget Sound area, another 100 or so are supporting them in Japan.


How many workers each company will add when the 787 is at peak production remains uncertain, Toda said, since it will depend, in part, on the plane’s ultimate manufacturing rate.


Bair said yesterday Boeing plans to build about 95 planes in the first two years of production.


All Nippon Airways, the Japanese carrier that launched the 787 program with a 50-plane order in April 2004, will take delivery of the first 787 in mid-2008.


Boeing has received 261 orders and commitments for the 787 from 21 airlines to date, Bair said.


Seattle Times aerospace reporter David Bowermaster is on a six-month Fulbright Foundation fellowship in Japan. dbowermaster@seattletimes.com



Lion Air orders 60 Boeing jets



As expected, Boeing won an order for 60 aircraft valued at $3.9 billion from Indonesia’s Lion Mentari Airlines, extending its lead over rival Airbus for new business this year.


Lion Air, Indonesia’s biggest budget carrier, will buy the 737-800 and 737-900 models, with deliveries starting in May 2007, airline President Rusdi Kirana said yesterday in an interview.


It’s the biggest aircraft purchase by an Indonesian airline since the country’s 1997 financial crisis, he said.


Lion Air will have about 85 planes after the purchase, allowing it to start regional routes to Bangkok and cities in India and Australia. Airbus offered its A320 as an alternative, Joseph Nadol, an analyst at J.P. Morgan Securities, wrote in a report on Monday.