Boeing may expand international 'partnerships'
Seattle — Every time a sleek new Boeing-767 airliner takes to the skies, two foreign ''partners'' have a stake in its performance and its profits. The partners are Aeritalia of Italy and a consortium of aircraft manufacturers in Japan. The partners' stake is 10 percent each, and Boeing counts them as ''participants'' rather than full-fledged partners because, while they make key parts of the airframe, they did not share in the full development costs.
Nevertheless, for Boeing, partnership even of this kind is a first. The Seattle-based company has many subcontractors. But ''participation'' is different, points out Richard R. Albrecht, vice-president in charge of the 747 and 767 divisions. A subcontractor, Mr. Albrecht said in a recent interview, must compete to get the contract. Boeing may order 200 sets of parts from him, and then another 100, and so forth.
But the Japanese and the Italians were preselected and guaranteed work and assured of price and profit. They are committed to 500 sets at an agreed price, so if the plane doesn't sell, they will take a loss. Beyond the first 500 sets, they can make good profits.
Boeing is very satisfied with the performance of the two foreign partners, Mr. Albrecht went on, and the company is now talking with both about a greater degree of participation in the next project, a 150-seat passenger plane. (The 767 seats 220.) Whereas neither the Japanese nor the Italians were involved in the preliminary design, development, flight testing, sales, and marketing of the 767, they could move toward full partnership by taking a share in some of these activities with the as-yet-unnamed next plane.
Boeing is a giant company, employing over 90,000 people. It is the largest US exporter. Two-thirds of its $5.1 billion commercial aircraft sales in 1982 were overseas, and in 1981 the proportion was even higher.
The world recession has had a decided effect on Boeing as on other manufacturers in the aircraft field. Still, the world commercial aircraft market is something like $120 billion a year, of which the United States has half. As the world economy climbs out of its prolonged slump, Boeing executives are bullish about the long-term prospects for aircraft sales. At the same time, costs of developing a new aircraft have risen so astronomically that no country outside the US can afford to bring out a major new commercial aircraft on its own.
Boeing's major foreign competitor these days is Airbus, a partnership of French, German, British, and Italian companies enjoying heavy state backing.
Even Boeing feels the need for foreign partners to spread some of the risks of development. That is how it got involved with the Japanese and Italians with regard to the 767.
Dean Thornton, who heads Boeing's international division, recalled that it took years of tough negotiations to get the Japanese and Italians aboard - especially the Japanese. Japan, with a limited market of its own, is considerably behind the US and major European countries in aircraft manufacturing.
The powerful Ministry of International Trade and Industry organized a consortium made up of Mitsubishi, Kawasaki, and Fuji to work with Boeing. The talks were frustrating and time-consuming, Mr. Thornton said. ''But once we shook hands and said this is it, the Japanese performance has been outstanding.''
Boeing makes the front part of the 767's air frame. The Japanese make the middle portion, plus the landing-gear doors. The Italians make the vertical fins , the flaps, and portions of the wing. The finished parts are shipped by sea to Boeing and assembled along with parts made by American subcontractors such as Grumman and LTV.
Boeing engineers, accustomed to making the entire airframe in the US, were nervous at first. ''Our engineers wondered how they could provide a backup if the quality failed to measure up, or if, say, the Italians went on strike. But everything has come in on time, and the quality has come right up to our requirements,'' Mr. Albrecht said.
The 767 first went into commercial service in September 1982. Twenty planes were sold that year. This year, 51 planes have been sold to customers as diverse as Ansett of Australia, All Nippon of Japan, and Thai Airways of Thailand.
International competition can have a confrontational aspect when it is seen in terms of Europeans against Americans, or Americans against Japanese. By seeking out partners in both Europe and Japan, Boeing hopes to neutralize the nationalistic aspect of international competition and put the focus on the product itself, Mr. Thornton said.