Strike Will Delay Delivery Of First 777 To China

A strike by workers at Boeing Co. in the United States will delay delivery of the first 777 series airliner to a crucial Chinese customer, a company executive said Wednesday.

The admission by Michael Zimmerman, president of Boeing China Inc., came as the company tries to woo Chinese airlines at an aviation exposition here. In particular, Boeing hopes to fend off European and American competitors and produce 100-seat airplanes with Chinese and Korean companies.

Winning the deal would likely give Boeing an edge in an industry niche expected to grow rapidly. Zimmerman estimated that airlines would buy about 2,000 100-seaters over the next 20 years, with China accounting for at least a tenth of the orders.

China is the world’s fastest-rowing aviation market and Boeing’s No. 3 customer. One out of every seven planes made by Boeing, the world’s largest maker of commercial jets, in the past two years has gone to China, according to company executives.

The first 777 of a $1 billion six-plane order was supposed to be delivered next month to domestic carrier China Southern Airlines.

Zimmerman told reporters at a news conference that the strike would affect delivery, but China Southern would get its plane before the end of the year.

“We are subject to strikes and that does have an impact on delivery,” Zimmerman said. He added, “We planned for this strike. We are producing airplanes.”

The Machinists union, representing 32,000 production-line workers, started the walkout last Thursday after rejecting the company’s latest contract offer. Health care, job security and wages are at the center of the dispute.

Boeing hopes to keep producing planes using supervisors and workers who cross picket lines.

The Seattle Post-Intelligencer, meanwhile, reported that a number of Boeing’s airline customers are expecting strike-related delays of new aircraft ranging from a few days to several weeks.

Delivery today of a new 747-400 jumbo to Singapore Airlines has been postponed to Friday.

“They don’t have enough people working on the aircraft,” said Chris Tay, Singapore’s manager of projects. “We don’t doubt Boeing’s quality, but we are concerned about any delays.”

Boeing said it still expects to meet a Monday delivery of a 767 freighter to United Parcel Service. Southwest Airlines said it took delivery of a 737 Tuesday and is to receive six more in the next few weeks.

Boeing spokesman Russ Young said work goes on at Boeing’s assembly plants at Everett and Renton, Wash., but it’s too soon to say what effect the strike will have on upcoming deliveries.

“Work is continuing, but you can’t have this many people off the job without an impact,” Young said.

United Airlines is to receive four more 777s this year.

“We suspect the delays would be three weeks to a month,” said Gordon McKinzie, United’s 777 program manager. “We’d like to get at least two in service by mid-December.”

British Airways was to have received its first 777 last month, but it was postponed because of problems with the General Electric engines.

Barry Gosnold, BA’s vice president of engineering and contracts, said the strike undoubtedly will cause further delays, but the airline isn’t overly concerned.

“We’d all like our new car tomorrow, but delays happen,” Gosnold said.

The 777, which began commercial service this summer, is the world’s highest capacity two-engine plane and can carry 300 to 450 passengers. Asia is its prime market, said Boeing’s Zimmerman.

Likewise, the region is expected to snap up 100-seat jetliners, hence the Chinese and Korean interest in co-producing the planes.

In making Boeing’s pitch for a part in the deal, Zimmerman said the company plans to transfer cockpit, wing and other technologies. He also touted the company’s engineering, marketing and customer support expertise.

“We are committed to transferring technology in the 100-seater, and we have significant technology,” Zimmerman said.

China’s state-run Aviation Industry General Corp. and South Korea’s Samsung Aerospace Industries Ltd. are expected to make an announcement on a partnership later this year.

Vying with Boeing are American plane maker McDonnell Douglas Corp., and some or all the members of the European Airbus Industrie consortium. They include British Aerospace PLC, Aerospatiale SA of France, the aerospace unit of Daimler Benz AG of Germany and Construcciones Aeronautics of Spain.

Despite its keen interest, Boeing will not form a consortium with its competitors.

“We prefer to work alone with the Chinese aerospace industry,” Zimmerman said.