Boeing and Japanese suppliers finalise 777X workshare agreement

ShinMaywa Industries

24/07/2015 07:42

By Siva Govindasamy 
    SINGAPORE, July 24 (Reuters) - Boeing  BA.N  and a 
consortium of five Japanese firms have confirmed a workshare 
agreement for the upcoming 777X aircraft, according to 
statements from both sides. 
    Mitsubishi Heavy Industries  7011.T , Kawasaki Heavy 
Industries  7012.T , Fuji Heavy Industries  7270.T , ShinMaywa 
Industries  7224.T  and NIPPI Corporation will build 21 percent 
of the 777X, finalising a June 2014 initial agreement. 
    The agreement will result in Boeing purchasing around $36 
billion worth of goods and services from Japan between 2014 and 
the end of the decade, said the company. 
    The 777X, the upgraded and re-engined version of Boeing's 
777-300ER passenger jet, competes with the Airbus  AIR.PA  A350. 
    The Japanese firms, long-time suppliers for the U.S. 
aerospace giant, have invested in "new cutting edge facilities" 
for the 777X since the initial deal, said George Maffeo, 
president of Boeing Japan. 
    Boeing estimates that 22,000 engineers in Japan, or 40 
percent of nation's aerospace workforce, work on its jets. 
    The relationship began with panels for the 747 jumbo after 
World War Two, led to greater workshare on other Boeing models 
such as the 737, 757, 767, and 777, and culminated in the 35 
percent of the 787 that was built in Japan. 
    The Japanese firms get a smaller share of the 777X after 
Mitsubishi, which built the 787's wings in Nagoya, 
unsuccessfully pitched to do the same for the larger jet. 
    Boeing will manufacture the wings in the United States after 
taking a more conservative approach to the production of the 
777X. 
    Difficulties in managing the 787's global supply chain led 
to major delays to the deliveries of the aircraft, and led to 
the company paying compensation to many of its customers. 
    Boeing has 306 firm 777X orders from six customers. They are 
Japan's All Nippon Airways  9202.T , Hong Kong's Cathay Pacific 
 0293.HK , Germany's Lufthansa  LHAG.DE , and Gulf carriers 
Emirates  EMIRA.UL , Etihad Airways, Qatar Airways. 
    Production of the 777X is set to begin in 2017, with first 
delivery targeted for 2020. 
 
 (Reporting By Siva Govindasamy; Editing by Michael Perry) 
 ((siva.govindasamy@thomsonreuters.com; Reuters Messaging: 
siva.govindasamy.thomsonreuters.com@reuters.net)) 
 
Keywords: AEROSPACE/BOEING CONTRACT