America’s biggest exporter now has its first overseas plant.
Aviation and aerospace giant Boeing will officially inaugurate a completion and delivery center for its 737 planes in the eastern Chinese port city of Zhoushan on Saturday (Dec. 15). The plant, about 90 miles from Shanghai, is a joint-venture between Boeing and China’s state-run Commercial Aircraft Corp. of China (COMAC). Planes destined to be delivered to Chinese carriers will arrive at the plant to have their interior and exterior painting and other finishing work done. China is a major Boeing 737 client—it has ordered more than 160 737 Max’s across 12 carriers since 2013.
This may not seem ideal timing to open a plant in China, given the current US president’s hatred of offshoring, and the retaliatory rounds of tariffs between the two countries (they’re now trying to work out a compromise). During the campaign, Donald Trump criticized Boeing’s plan for a China plant, saying it would take lots of jobs away from US.
Boeing disputes that, since manufacturing of planes will continue to take place in Renton, Washington, before they are shipped to China for detailing. Additionally, the company said, only planes sold to China will be finished here. The company posted some 30 jobs for the plant between April and June. A Boeing representative said more details about the plant and its operations would be available at the inauguration Saturday.
Construction of the plant, in which Boeing has invested $33 million, began in May 2017. The facility, which is supposed to be capable of delivering 100 planes a year, was first announced by Boeing in 2015 during a visit by Chinese leader Xi Jinping (paywall) to its Seattle factory.
Boeing’s stock has taken some swings when gloom deepens about US-China relations, yet its business appears to have been insulated from tariff shocks so far. Analysts said earlier this year that Boeing could see its first year with over $100 billion in revenues. China made up about 13% of 2017 Boeing revenues.
It’s unclear yet how its numbers will be affected by the first deadly crash of the 737 Max, when a Lion Air flight went down a few minutes after taking off from Jakarta on Oct. 29, killing all 189 people on board. Lion Air has said it is considering canceling billions of dollars in orders of the 737 Max.