Boeing Chairman: China no Threat to Airplane Manufacturers
September 24 2015 - 5:53PM
Dow Jones News
By Robbie Whelan
Chinese manufacturers are decades away from competing globally
in the airplane manufacturing industry, Boeing Co. Chairman Jim
McNerney said Thursday.
China will remain a large buyer of American-made airplanes and a
supplier of parts, Mr. McNerney said at an aviation industry event
in New York. Boeing announced on Wednesday that Chinese airlines
had agreed to buy 300 new jets from the company, and that it would
open a facility to perform finishing work on 737 jets built in the
U.S. and flown to China.
"We are going to invest more in innovation going forward," he
said. "We lose if don't maintain that innovation edge."
Mr. McNerney, who stepped down as Boeing's chief executive in
June, also said he expects Congress to reauthorize the U.S.
Export-Import Bank. The bank's mandate expired on June 30, and it's
unclear whether supporters have enough votes to revive the
institution, which provides loans and guarantees to help overseas
customers of U.S. companies finance their purchases. Industrial and
aviation companies, including Boeing, General Electric Co. and
Caterpillar Inc., have been among the bank's biggest
beneficiaries.
Companies argue that shutting the bank strengthens overseas
competitors that continue to have access to government-backed
financing in their own countries. Last month, Boeing said that the
closure had cost it an $85 million satellite contract with a
Bermuda-based telecommunications firm, which said it would look
elsewhere for financing. GE said Thursday that it would move 1,000
new energy jobs to the U.K. after winning export financing from the
Ex-Im Bank's UK counterpart.
"Customers require guarantees. Europe has them, and we don't,"
Mr. McNerney said. He added that without the bank, Boeing is at a
disadvantage on roughly 10% of the business for which it competes.
"You have to evaluate some parts of your supply chain being able to
access financing (if it) isn't available in your country."
Mr. McNerney said he was "frustrated" that members of Congress
were pressuring House Speaker John Boehner to prevent the
reauthorization from coming to a vote.
"It's a triumph of the inside game over what's good for the
country," Mr. McNerney said. "It really is a sign of the
dysfunction that exists in Washington."
Mr. McNerney said that Boeing is pursuing innovation in the
types of materials used to build airplanes and jet engines, as well
as in keeping manufacturing costs down.
"You look inside a jet engine today, and you'd be shocked at the
amount of non-metallic material," he said.
Longer-term, the next wave of innovation in the aviation
industry will occur when manufacturers start building vehicles that
"blend atmospheric and space travel together," Mr. McNerney said, a
milestone that is technologically within reach today.
"When that day comes, and you'll be blending supersonic and
space travel, then you'll see some very different designs," he
said. He also praised entrepreneur Elon Musk, whose Space
Exploration Technologies Corp. has added competition to the space
travel and satellite industry, though Mr. McNerney added that Mr.
Musk has not achieved enough scale to become a serious competitor
to Boeing.
Write to Robbie Whelan at robbie.whelan@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 24, 2015 17:38 ET (21:38 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
Boeing (NYSE:BA)
Historical Stock Chart
From Mar 2024 to Apr 2024
Boeing (NYSE:BA)
Historical Stock Chart
From Apr 2023 to Apr 2024