US planemaker Boeing has not ruled out moving manufacturing of all or part of its new 777X aircraft to the Middle East after American labour unions rejected the terms of a new contract to build the aircraft at its base in Seattle, a senior executive said.
Boeing had been in talks with the International Association of Machinists and Aerospace Workers since March to negotiate an eight-year contract extension to build the 777X aircraft at its base in Seattle, in the north western US state of Washington.
The offer was rejected in a vote by a 2-1 margin on Wednesday, putting up to 31,000 jobs in the Seattle area at risk and forcing the planemaker to seek an alternative production location.
“Unfortunately the union voted down the agreement and we are going to continue to march forward... As you know we will continue to look at other alternatives in terms of where we might produce major components and/or final assembly of the aircraft as it relates to this part the world and other parts of the US,” Marty Bentrott, Boeing senior vice president for international sales, said at a press conference ahead of the Dubai Airshow when asked if the Middle East might be chosen an alternative to Seattle for production of components for the new 777 aircraft.
Bentrott also dismissed claims the 777x production had been accelerated in order to compete with rival Airbus: “There is no change is schedule relative to the programme and we are still on the schedule we were talking about with entry into service of mid 2020. All this hype that was related to accelerated production is not factually based.”
Boeing already has a relationship with UAE aerospace company Strata, a unit of Abu Dhabi government investment vehicle Mubadala. Last year, Boeing and Mubadala announced a 10-year direct contract to produce commercial composite aerostructures for the 777 and 787 Dreamliner at Strata’s facility in Al Ain, as well as signing a strategic agreement for Strata to be a future supplier of the vertical fin for the 787 Dreamliner.
“We are very committed to our relationship with Strata,” said Jeffrey Johnson, president of Boeing Middle East. “What is exciting about our Strata partnership is we will be building the 787 vertical fin out there in a few years so think about the pride of this nation and its capacities to deliver a major composite air structure like that.”
Production of parts of the 777X in the Middle East would make a strong business case as the region has shown high interest in the aircraft and it is widely rumoured Dubai’s Emirates will confirm a large order for around 175 twin engine Boeing 77X aircraft at this week’s Dubai Airshow, with Abu Dhabi’s Etihad and Qatar Airways also believed to be interested in buying additional 777 aircraft.
Emirates is already actively involved in the designing of the 777X, Bentrott confirmed in September. “Boeing is partnering with key 777 customers such as Emirates in the design of the 777X,” a spokesperson said.
Bentrott told reporters at a briefing in Seattle this summer Boeing was “actively engaged with Emirates on the next generation 777 and as the largest 777 customer in the world, they deserve our focus and our attention.”
The Dubai carrier currently has 194 aircraft in services and is due to start retiring its existing 777 fleet in 2017. “From our stand point, this family of airplane needs to be effective for Emirates’ business plan because their vision is they have a 777 replacement cycle starting towards the end of this decade,” Bentrott added.
The 777X will have a range capability of around 9,300 miles and will be able to carry up to 360 passengers, but will be 20 percent more fuel efficient than the existing versions.