Boeing Quiet on Chinese Joint Venture for 737 Completions

 - March 14, 2017, 4:19 PM

Boeing has declined to confirm a report from official Chinese news agency Xinhua that its previously announced joint venture with state-owned Comac will start building a 737 completions center in Zhoushan by the end of this month. According to Xinhua, the joint venture will install the first set of seats and cabin entertainment systems and Boeing will deliver the first 737 from its own facility located at the same site next year.

“We continue to discuss plans for the facility with our JV partner and government officials and will announce more information, at a later date,” said Boeing in a written statement.

The initial agreement to collaborate on 737 completions came along with an order for 300 Boeing jets involving China Aviation Supplies Holding Company, ICBC Financial Leasing and China Development Bank Leasing. The so-called general terms agreement covered 190 B737s and 50 widebodies for Chinese airlines and another 60 B737s for ICBC and CDB Leasing.  

Boeing this week revealed CDB Aviation Lease Finance as the previously unidentified customer for thirty 737 Max 8s, a deal that the airframer described as “an opportunity to broaden communication and strengthen cooperation in various fields, bringing the partnership to a new level.”

Based in Dublin, CDB Aviation operates as a wholly owned Irish subsidiary of China Development Bank Financial Leasing Company.   

As expected, the revelation of Boeing’s plans for the completion and delivery centers in September 2015 drew protest from the International Association of Machinists, the union representing Boeing mechanics in the Puget Sound region of Washington state, including the 737 plant in Renton. 

“Our union must reiterate that any movement of aerospace work from our members and other aerospace workers in Washington state gives rise for great concern,” IAM District 751 said in a statement. “We understand the importance of selling airplanes to customers around the world; however, the work we perform here seems to be what is offered as a bargaining chip to fill aerospace manufacturing across the country and the world. Where is the commitment to our communities?”

This past January Boeing declared itself encouraged by what it sees as pro-business signals sent by the new U.S. administration of President Donald Trump, apparently ignoring repeated rhetoric from the new leader about his plans to counter what he has characterized as unfair Chinese trade policies.

Asked during the company’s fourth-quarter earnings call to respond to Trump's critical comments about Boeing’s plans for the 737 completions center in Zhoushan, Boeing CEO Dennis Muilenburg Boeing CEO characterized any policies that ensure U.S. companies get fair access to markets and China and elsewhere as positive.

“Actions being taken to ensure U.S. competitiveness are positive actions, and we support those,” he said. “Regarding our China finishing center, that’s an important part of the partnership equation here. That finishing center is in a location where we’ll be able to add value in China, and every airplane that goes to that center is being built here in the U.S.”