Boeing denies 767 deal

  • Bryan Corliss / Herald Writer
  • Wednesday, December 26, 2001 9:00pm
  • Business

By Bryan Corliss

Herald Writer

The Boeing Co. has asked its Japanese parts suppliers to study the possibility of building complete body assemblies for 767s there.

But there is no truth to reports that the company is negotiating a deal to make that happen, a Boeing spokesman said Wednesday.

"We’re not at this point in any way in negotiations for any changes in how we do business," said Craig Martin, spokesman for Boeing Commercial Airplanes.

On Wednesday, Japan’s Nihon Keizai financial daily reported that Mitsubishi Heavy Industries and Kawasaki Heavy Industries were in negotiations for a 767 deal with Boeing. That story quoted an unnamed Kawasaki spokesman.

A deal could be reached early next year, according to Bloomberg News, which said it also was quoting Nihon Keizai.

The report drew criticism from U.S. Rep. Rick Larsen, part of the state’s congressional delegation that had worked on a bill to lease 100 767s for the U.S. Air Force to use as aerial refueling tankers. The $20 billion lease deal was approved by Congress last week, but has not been signed by President Bush.

"This is not the Christmas bonus Boeing workers have worked hard to earn," Larsen said. "Congress fought to bring these jobs to the Northwest. Now Boeing needs to do its part to make sure they stay here."

The tanker deal was touted as creating 2,400 jobs at Boeing, plus another 5,500 at Boeing suppliers, while providing the Air Force with replacements for its aging KC-135 tankers.

Boeing assembles 767s in Everett. However, pieces of the plane’s fuselage are manufactured in Japan by Mitsubishi and Kawasaki, which ship the panels through the Port of Everett. Both companies have been expecting a drop of orders from Boeing after Sept. 11. But the new contract would be a major revenue boost, Nihon Keizai reported.

The paper reported that the deal would raise annual aircraft-related revenue for the two companies to about $534 million to $611 million. Now, those revenues stand between $458 million and $534 million.

"For Boeing, assembly in Japan would be cheaper, and for us it would mean more work," Mitsubishi spokeswoman Hiroyuki Okada told Bloomberg News.

Kawasaki spokeswoman Yuko Ogino told Bloomberg her company was "talking about beginning assembly work, although an agreement hasn’t been reached yet."

It’s just talk, according to Boeing’s Martin. "The discussions are really at the ‘what if’ stage," he said.

Boeing is talking with all its parts suppliers about a range of ideas, with the aim at streamlining the company’s operations, he said.

Among the ideas that have been "kicked around" is having the "Japanese heavies" — Mitsubishi, Kawasaki and Fuji Heavy Industries — build complete 767 bodies, which would be delivered whole to Everett much as the complete 737 bodies are built in Wichita, Kan., and delivered whole to Boeing’s Renton factory, Martin said.

That is being studied, but "it’s a long way from study to any changes in the way we do business," he said.

Even if it’s just a rumor, the report is "very disappointing," Machinists union spokeswoman Connie Kelliher said, especially in light of last week’s tanker deal.

"The intent was to keep American workers working, especially with American tax dollars," she said.

Given that it’s coming days after Boeing laid off 7,000 Puget Sound workers, the news is certain to depress morale even further, she added.

Under Boeing’s contract with the Machinists, Boeing would have to give 180 days notice before moving the work to Japan, Kelliher said. The union would have that time to show the work could be done more effectively in-house.

"We’d certainly do everything to make sure that happens," she said. "We’ll do everything we can to keep the jobs here."

The Associated Press contributed to this report.

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