China’s leader tours Boeing after big jetliner deal

EVERETT — Chinese President Xi Jinping toured the Boeing Co. factory at Paine Field on Wednesday, shortly after the company confirmed that it will sell 300 jetliners to Chinese airlines and leasing companies.

Xi arrived on the factory floor just before noon and was greeted by Boeing Commercial Airplanes President and CEO Ray Conner for a tour of a new 787 Dreamliner in Xiamen Air livery.

“China is quickly becoming the largest aviation market in the world, and our partnership together is creating jobs both in China and the U.S.,” Boeing President and CEO Dennis Muilenburg said following Xi’s tour. “Clearly our company’s future is linked to China’s future, and in fact one in every four airplanes we deliver this year will go to China.”

In remarks after the tour, Xi noted the history between Chicago-based Boeing and China. “The Boeing Co. has long been a supporter, participant and promoter of business collaboration between China and the United States,” Xi said.

“The ties between China and Boeing go back a long way. We purchased the first batch of Boeing planes in 1972. By the end of 2014, China had purchased over 1,500 planes.”

Xi noted that he was involved in establishing 787 customer Xiamen Air in 1985, when he was the mayor of Xiamen.

Back then, Xiamen Air had a fleet of just over a dozen planes. Xi said that now it is the fastest-growing airline in China.

“The dream of flying has made Boeing a successful company and it will inspire Boeing to ever greater heights,” Xi said. “I’m sure our cooperation will be just like a Boeing plane — it will spread its wings and soar into the sky.”

The tour came a few hours after the Boeing confirmation of plans by China to buy 300 jetliners. Airlines there will buy 190 737s, which are built in Renton, and 50 twin-aisle planes built in Everett. Another 60 737s are to go to Chinese leasing companies.

Boeing revealed the deal to reporters just before Xi’s tour. It declined to say which twin-aisle jets are part of the deal, but the presence of the Xiamen Air 787 was a clue. The airplanes are worth $38 billion at list prices. The actual value of the deal is likely much less.

“China is a critical international market for commercial airplanes,” Conner said in a written statement. “We thank our Chinese customers for selecting fuel-efficient Boeing airplanes to meet their fleet growth and expansion.”

“Boeing airplanes have played an important role in supporting the development of China’s aviation transportation for the past 40 years,” Li Hai, president of China Aviation Supplies Holding Co., said in Boeing’s written statement. “These additional airplanes will further help connect the people in China and around the world.”

The announcement confirmed an earlier report by the official Xinhua news agency of China, but the company has not elaborated on another aspect of that report — that Boeing will establish a 737 finishing facility there.

On Tuesday, in an email to employees, Conner said the company was close to a deal that would involve opening a finishing plant for 737s in China.

Xi was in the midst of a three-day visit to Washington. After the Everett stop, he was to visit Microsoft’s headquarters in Redmond and Lincoln High School in Tacoma, which Xi first visited years ago as a provincial official.

The Chinese president was to spend a second night in Seattle before leaving Thursday morning from Paine Field to Washington, D.C. in a Chinese-government-owned 747 for a state visit with President Barack Obama.

Boeing delivered 155 completed planes to China last year. A plant there would likely involve already-assembled planes that need to be outfitted with interiors and other add-ons.

Boeing rival Airbus opened an A320 final assembly plant in Tianjin in 2008 and recently announced plans to build a second plant by 2017 in that port city to complete cabin work on A330s.

Boeing estimates that China will need to buy 6,330 new planes worth $950 billion over the next 30 years, and China is expected to surpass the U.S. as the world’s largest commercial airplane buyer by 2030.

State Rep. Strom Peterson, a Mukilteo Democrat, said last week that building a finishing plant in China raises the spectre of more jobs going overseas — while the company extracts more tax breaks from lawmakers.

“For the Washington employee who just lost her job painting planes, this is just a loss. In fact, it’s only a win-win for Boeing and China,” Peterson said on his website.

Conner sent the memo to employees Tuesday to reassure them that local jobs would not be affected.

“These discussions are at a sensitive stage, and I appreciate your support as we finalize what I hope will be a win for Boeing, a win for the Puget Sound, and a win for our stakeholders,” Conner wrote.

“I want to assure you that agreements we may reach with our Chinese partners will not result in layoffs or reduce employment for the 737 program in Washington state,” he said.

Conner’s message, however, was rejected by the rank and file. The International Association of Machinists and Aerospace Workers (IAM) held protests Wednesday at the District Lodge 751 hall near the Boeing plant and near Boeing’s Renton factory.

The intended message, union officials said, was that the reported deal to build a factory in China would take away union jobs and send them overseas.

“We are concerned about any work package leaving Washington, or leaving our bargaining unit,” said John Holden, president of District 751.

“The more capacity created outside Washington, the harder it makes it for aerospace workers in Washington to compete,” Holden said.

He said workers have already made sacrifices in contract negotiations, and the state has granted Boeing $8.7 billion in tax breaks. In return, there should be some guaranteed amount of work here, Holden said.

“Part of what we’ve done here is to make these lines the most efficient aircraft production lines in the world. As we give that process and technologies to other countries around the word, we’re creating our own competitors,” Holden said.

As it did on Tuesday after the Chinese president’s arrival at Paine Field, the Washington State Patrol cleared I-5 Wednesday morning as Xi’s motorcade returned to Everett after an event in Seattle, where he is staying. Further freeway closures were expected later Wednesday for Xi’s drive to Redmond, Tacoma and back to Seattle.

During Xi’s Boeing visit, a handful of protesters from the Falun Gong spiritual sect were standing near the plant, carrying signs in English and Mandarin that demanded the end of alleged organ harvesting in China and prosecution of former President Jiang Zemin for crimes against them.

People from the area’s Tibetan community also held a small demonstration, protesting for their nation’s independence to be restored and for an end to Chinese human rights abuses.

Chris Winters: 425-374-4165; cwinters@heraldnet.com. Twitter: @Chris_At_Herald.

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