Work begins on Boeing’s first overseas production plant
Tuesday, May 16, 2017
A strategic plan by Boeing to streamline output of its most popular airplane has taken a step closer to reality this week as work commenced on a new completion and delivery plant in China. The facility is located at Zhoushan Airport in eastern China, some 175 miles by road from Shanghai on an island in the East China Sea.
First announced in October 2016, the new facility is a joint venture between Boeing and Chinese aircraft manufacturer Commercial Aircraft Corp. of China (COMAC). It will oversee the final preparation of Boeing 737 aircraft and delivery to Chinese airline customers.
The facility will be wholly owned by Boeing. It will cover nearly 100 acres of land at the regional airport, including final assembly buildings, paint shops, delivery center for customer handovers, storage facilities and fire station.
Boeing hopes the new plant at Zhoushan will achieve an output of 8-10 airframes per month. At the time of writing, the Boeing 737 Next Generation has an order backlog of around 750 aircraft, and the new 737 MAX over 3,600. The manufacturer reported in 2014 that it hoped to increase total output to 52 aircraft per month by 2018, which this new facility will help accomplish.
Additionally, Boeing thinks the potential for sales to the Chinese market is significant. By basing a production line of its most popular narrow-body airliner on the doorstep of China's fast-growing aviation industry, it brings confidence and reduces cost barriers for customers in this market.
Airbus, Boeing's main rival, has operated its own Chinese production line at Tianjin since 2008, building its A320 family aircraft (comparable in many ways to the 737). It will begin producing the latest A320neo models this summer, and the European manufacturer is looking to add a production line for its widebody A330 family in 2019.
For Zhoushan Airport — a single runway regional facility that opened in the mid-1990s and handles less than a million passengers per year — taking Boeing as a tenant will help diversify its operation and make use of its available space. It is undergoing a $109 million upgrade to transform into an international airport to support the arrival of Boeing. A local supply chain of aviation-related suppliers will also be encouraged, and the local population will benefit from the hundreds of jobs being created.
"In the near future, Zhoushan will take an important position on the map of China's aviation industry, and even in the global aviation industry pattern," Guo Qi, deputy director of the integrated planning institute, part of China Aviation Planning and Design Institute (Group) Co Ltd., told The China Post.
Initially, the new Boeing 737 airframes will be completed in Wichita, Kansas, and Renton, Washington, and flown to Zhoushan for final modifications, painting and cabin installation ahead of deliveries. It is the first such facility for Boeing.
COMAC, Boeing's joint venture partner in China, this week flew their new C919 airliner for the first time after delays of a number of years. The new narrow-body aircraft will eventually compete for customers with the Airbus A320 and Boeing 737.
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