Boeing, China anounce big deal as Machinists protest Asian expansion
Sep 23, 2015, 9:02 AM | Updated: 4:39 pm
Chinese President Xi Jinping, left, and his wife Peng Liyuan wave on their arrival Tuesday at Boeing Field in Everett. (AP)
(AP)
Boeing and China strengthened their longstanding and ever-growing relationship Wednesday with a huge new order and announcement of an expanded presence in China. But some Machinist union members walked of the job this afternoon in Renton over what they say is a direct threat to their jobs and the U.S. aerospace industry in general.
Related: Xi says without reform no progress for business in China
President Xi Jinping and Boeing executives confirmed the order for 300 jets with a $36 billion list price after Xi toured Boeing’s Everett plant Wednesday.
They also confirmed reports the company would open a new completion center in China to paint, finish interiors and deliver new 737’s for Chinese customers.
“Boeing will continue to work closely with our customers, suppliers and other stakeholders in China to support the long-term growth of China’s aviation industry and jobs here in the United States,” said Boeing Commercial Airplanes President and CEO Ray Conner.
That isn’t making Machinists Local 751 President Jon Holden feel any better.
“Anytime the company moves capability and capacity for aerospace manufacturing outside of Washington state, it makes it harder for workers here to compete for the next generation of programs,” Holden said. “We are taking the long view.”
Union membership suspects Boeing is opening this new plant as “quid pro quo,” for the 300 Boeing jets China is ordering.
“Every time the company wants to secure something from somewhere else, it’s our jobs that are used as bargaining chips to secure whatever the company wants,” He said.
But others say the move is a natural, given the close ties. After all, President Xi Jinping arrived to much fanfare Tuesday in a Boeing 747 — near where the jumbo jet was built.
“Through all the downturns that we’ve had, through the SARS epidemic, through the recessions, China has always been a reliable customer to order Boeing airplanes. So yes, further cementing that relationship is very important,” said veteran aviation analyst Scott Hamilton.
He says it means Boeing has to go out of its way to keep China happy.
“I think at this point, it’s more symbolic than it is substantive,” Hamilton said of the center.
That’s little comfort to state representative June Robinson (D-Mukilteo). She says although she recognizes and welcomes the growth of Boeing’s relationship with China, news of the center is a huge disappointment, especially since the state gave Boeing huge tax breaks in exchange for keeping production of the upcoming 777x in Washington.
“This recent example of production being sent to China is yet another instance in which jobs that should be done in Washington state are being sent elsewhere,” Robinson said. “This time not even to another state but another country.”
Earlier this year, Robinson introduced a failed measure that would reduce the amount of tax reduction Boeing received if it sent jobs out of state.
But Boeing commercial air president and CEO Ray Conner underscored the importance of growing its presence in China in a message sent to all employees Tuesday.
This high-profile visit will draw attention, and possibly questions, so it’s important that you understand China’s pivotal role in Boeing’s future success.
China is our largest international market, accounting for about 1 in 4 of our deliveries so far this year. Going forward, China will be the largest commercial aviation market in the world — and a key to production, growth and jobs here in the Puget Sound region. More than half the commercial airplanes operating in China today are Boeing airplanes, but Airbus is working hard to take the lead. Whoever wins the market in China will be the global market leader.
And just as we are committed to growing the entire global base for Boeing airplanes, we are committed to our employees. As you may have read or heard, we are in important discussions with Chinese partners about our strategic partnership in China and also possible sales agreements. These discussions are at a sensitive stage, and I appreciate your support as we finalize what I hope 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 program in Washington state.
President Xi’s visit is an opportunity to strengthen our ties with this key market and build on our historic partnerships, which today range from environmental research to air traffic management to our supply chain. China supplies parts for all our major models – in fact, Boeing is the largest international customer of China’s aviation manufacturing industry.
I hope this message helps you better understand the context of President Xi’s visit and its significance for our future success.
Ray
While Connor assured workers any new agreements with Chinese partners would not result in layoffs or cuts for the 737 program in Washington state, Hamilton said at the very least, he wouldn’t be surprised to see Boeing continue to expand its presence and workforce in China.
Related: Dori says Chinese presidents visit highlights Seattle hypocrisy
“Whether it would be a fourth assembly line for the 737 or whether it would be a new assembly line for an entirely new airplane, only time will tell,” Hamilton said. “But sure, I think someday you could see Boeing assembling airplanes in China.”
And that raises long-term concerns with many already casting a wary eye on China’s nascent aerospace industry – and its propensity for stealing technology and intellectual property from foreign companies.
Hamilton points out China’s first two domestically produced jetliners seem to bear a striking resemblance to older aircraft developed by McDonnell Douglas and Airbus — both of which had plants and shared technology with China in the past.
“I don’t think that’s coincidence that those two airplanes look very much like the DC-9 and the A320,” Hamilton said.
Many suppliers based in Washington state also worry about their parts being ripped off, which they say has gone on for years.
But given the importance of Boeing’s relationship, the company’s relationship with China is certain to keep growing.
