7E7 supplier deal for Tacoma could be first of many

  • By Bryan Corliss / Herald Columnist
  • Tuesday, June 1, 2004 9:00pm
  • Business

A Japanese company says it will double the size of its Tacoma-area factory and expand its workforce by nearly 50 percent because it has won a 7E7 supplier contract from the Boeing Co.

It’s among the first announced subcontractor jobs to be spun off for the 7E7 program, a state official said. More could be on the way.

“I hope so,” said Bill King, the aerospace business development manager in the state’s trade office. “Logically speaking, there is more to come.”

The company is Toray, whose Frederickson-based Toray Composites (America) Inc. will supply Boeing and its worldwide subcontractors with most of the epoxy-drenched carbon fiber material that will be used to build the body of each 7E7. The companies announced the 18-year, $2.9 billion contract last week.

Toray told The News Tribune of Tacoma that it will break ground this fall on a $30 million project to expand its plant by 45,000 square feet. Once that work is done, it will add 80 people to its 180-person work force.

There’s been a lot of talk, King said, about how Boeing’s supply chain is going international. “But there is a remaining need for some locality,” he said.

A number of Boeing’s international suppliers are looking at sites near the Everett assembly plant or for local partners they could work with, development officials say.

Others already are here, and it’s “a question of when do they expand here,” King said.

King said he believes there will be more announcements like Toray’s after Boeing completes its initial design work on the 7E7 and the contractors begin more-detailed development.

More rumors have emerged about potential 7E7 buyers.

Dow Jones Newswires reported last week that China Eastern plans to take as many as 20 7E7s by 2020, and Air Canada’s chief executive told a Paris newspaper that the airline found the plane to be “very interesting.”

There is an incentive to place orders early. Boeing will be able to build only 96 planes in the first two years of 7E7 production, as it ramps up and works out the kinks in the new production system.

Meanwhile, Pakistan International Airlines’ purchase of eight long-range 777s is drawing fire in that nation’s Parliament, where opposition leaders want to know why the state-run airline bought more-expensive Boeing jets instead of cheaper Airbus ones.

The deal was a big one for Boeing, because it provided the company with a launch customer for its ultra-long-range 777-200LR.

News service reports from Pakistan said Tuesday that it cost the Pakistani government more than $100 million more to buy the Boeing planes rather than the competing Airbus A340s.

According to The Daily Times of Lahore, Pakistan, “the average cost of each plane was around $139 million and the total cost, including spares, facilities and other miscellaneous charges, was $1,458 million.” (Or $1.458 billion, as we’d say in this hemisphere.)

At that rate, PIA got a discount of between 25 percent and 33 percent off Boeing’s published list prices for the plane, which was still not enough to match Airbus’ bid of $1.347 billion.

Government officials defended the deal by saying the 777 was stating it was “a much better aircraft compared to the others on offer,” news agencies reported.

Boeing so far has delivered three of the eight jets to Pakistan.

Assembly work on the first 777-200LR is expected to start in October in Everett. When it enters service in 2006, it will be the world’s longest-range passenger plane, capable of carrying up to 301 passengers farther than 10,600 miles – far enough to fly nonstop between Singapore and New York. Pakistan will take three of them.

Boeing also made headlines in India.

Air India said Tuesday it will lease 14 737-800s for a new low-fare subsidiary.

It’s not clear whether that will mean new orders for Boeing’s Renton plant, company spokesman Bob Saling said. It depends on whether the airline strikes a deal with a leasing company that already has 14 737s in its fleet, or one that needs more.

But either way, it’s good news, Saling said, because the low-fare carrier will likely need more planes in the future.

Reporter Bryan Corliss: 425-339-3454 or corliss@heraldnet.com.

Corliss

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