Boeing and Japanese suppliers finalise 777X workshare agreement

[SINGAPORE] Boeing 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, Kawasaki Heavy Industries, Fuji Heavy Industries, ShinMaywa Industries and NIPPI Corporation will build 21 per cent of the 777X, finalising a June 2014 initial agreement.

The agreement will result in Boeing purchasing around US$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 A350.

The Japanese firms, long-time suppliers for the US 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 per cent 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 per cent 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, Hong Kong's Cathay Pacific , Germany's Lufthansa, and Gulf carriers Emirates, Etihad Airways, Qatar Airways.

Production of the 777X is set to begin in 2017, with first delivery targeted for 2020.

REUTERS