This would give the Japanese companies a share of the work on the
new plane that is on par with the 21 percent of the 777 aircraft
they have been making for two decades.
But because Boeing plans eventually to build more planes per month,
there should be a greater volume of work for the Japanese suppliers,
one of the sources said. Boeing's current production rate for the
777 is 8.3 a month.
A Boeing spokesman in Tokyo declined to confirm the information.
"Supply chain partnerships and production system decisions will be
addressed at the appropriate time," the spokesman said.
Boeing, and to a lesser extent Airbus <AIR.PA>, its European rival,
assemble jetliners from parts made across the world. The arrival of
new models or major variants of earlier ones — like the 350-406-seat
777X — gives suppliers a chance to compete.
For Mitsubishi Heavy, Kawasaki Heavy, Fuji Heavy Industries <7270.T>
and other Japanese suppliers, the high watermark for Boeing work so
far is the 787 Dreamliner, with 35 percent of the carbon composite
jet, including wings, built in Japanese plants.
Delays in the 787 development and delivery, due in part to
difficulties of managing a global supply chain, prompted Boeing to
keep more of the 777X, including the wings, at home.
The prospect of higher output of the 777X, which competes mainly
with Airbus's A350 and is a key source of cash and profits for the
U.S. planemaker, first emerged when Boeing was wrestling with major
production decisions last year. The company has not addressed in
public how fast it would produce the jets.
Mitsubishi Heavy, according to sources who spoke to Reuters last
year, made a bid to win the wing business when workers in the United
States at first rejected a labor deal that would have secured the
build in Washington State.
That proposal called for producing wings at a rate starting at 7 a
month and rising to 10 a month, in what was seen as an indication of
Boeing's own thinking on potential output since Mitsubishi was
bidding as a core member of its production team.
[to top of second column]
Japan's government sees the Boeing partnership as critical to
rebuilding an aerospace industry that the U.S. dismantled after
World War II.
Beginning with panels for the 747 jumbo, Japanese firms secured
their ties to Boeing in the 1980s with a 16 percent share of the
767. That deepened further with their involvement in the 777 a
Boeing reckons that the business it gives Japan employs 22,000
engineers, accounting for around 40 percent of the country's
For Boeing, building in Japan helped to secure sales in what was
once Asia's biggest aviation market, where it still dominates with
an 80 percent share.
But a decision by Japan Airlines Co Ltd <9201.T> last year to order
31 A350 aircraft from Europe's Airbus <AIR.PA> instead of the 777X
prompted angst in Tokyo that Boeing would look for suppliers
elsewhere, particularly in China which is now the biggest market in
the region for passenger aircraft.
JAL's rival ANA Holdings Inc <9202.T> helped to alleviate those
worries last month when, as part of a 70 plane order, it bought a
score of 777X jets as well as six 777s and 14 of the 787s.
(Editing by Edmund Klamann, Jane Merriman, Tim Hepher)
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