Boeing in Talks With Japanese Companies for Jet Body Production

SEATTLE – A week after Congress agreed to spend billions for military versions of Boeing's 767 jetliner — in part to sustain jobs at Boeing's Seattle-area factories — two of Japan's largest manufacturers say they are talking with Boeing about taking over more jetliner assembly work.

A spokesman for Japan's Mitsubishi Heavy Industries Ltd., Wataru Ichikawa, said Thursday that Mitsubishi Heavy and Kawasaki Heavy Industries Ltd. are in talks with Boeing on a deal to assemble passenger jet bodies in Japan.

"We are in talks with Boeing, asking it to let us do more work for Boeing-ordered aircraft," Ichikawa said. "But nothing has yet to be decided."

Kawasaki and Mitsubishi, two of Japan's largest aircraft makers, have long supplied Boeing with aircraft components, including fuselage panels for Boeing 767 and 777 jetliners that are assembled at Boeing's massive Everett plant north of here.

Boeing spokesman Craig Martin in Seattle said Boeing regularly talks to suppliers, including the Japanese companies, about further options, including supplying more parts or doing more assembly work.

But he denied that a specific contract change was in the works.

"As far as I'm aware there are not imminent negotiations or changes planned in the near-term," Martin said.

As part of the $318 billion defense spending bill passed last week, Congress approved a plan to let the Air Force lease up to 100 airborne refueling tankers built from Boeing 767s, at a cost expected to be well over $20 billion.

Critics complained the deal would cost more than buying the planes outright, and some said it amounted to a bailout for Boeing.

Washington state's congressional delegation fought hard for the plan, saying it would help the military while providing much-needed work — and saving jobs — at Boeing's jetliner plants. Boeing, hard-hit by the devastation to the airline industry after the Sept. 11 terrorist attacks, already has cut thousands of jobs, mostly in its commercial airplanes division, and has said it could eliminate up to 30,000 positions in all.

Rep. Norm Dicks, D-Wash., who helped lead the fight for the 767 tankers, said Wednesday that Japan is an important ally, both for Boeing and the United States. Maintaining that relationship is crucial, he said, although he hoped it would not be at the expense of U.S. jobs.

"I'm certain that the Japanese would like to do more work with Boeing, and we have to evaluate that, but I personally would like to see us maintain the existing relationship and keep as much work here as possible," he said.

Rep. Rick Larsen, D-Wash., whose district includes many Boeing workers, was more critical.

"I am disappointed by this news. This is not the Christmas bonus Boeing workers have worked hard to earn," Larsen said.

Japan is a critical market for Boeing. Though Boeing has captured about 85 percent of orders from Japanese airlines, archrival Airbus is aggressively trying to expand its business there.

Mitsubishi and Kawasaki are among 85 subcontractors Boeing has in Japan. The Kawasaki spokesman said the discussions involved allowing the two companies to assemble main cabin sections, work now done in Everett.

The deal could potentially provide tens of millions of dollars in revenue for the two companies, the spokesman said.

But it would also certainly anger Boeing workers here. Representatives from Boeing's unions said Boeing had not told them any negotiations were in the works.