Boeing expects increasing competition from China, others

Boeing Commercial Airplanes President and CEO Jim Albaugh believes China will become a significant competitor in civil aircraft manufacturing, but he does not expect COMAC's C919 to achieve a major sales presence outside the country.

"It will probably be a good airplane. Will that be the airplane that they market outside China? Probably not," Albaugh told media this week at Boeing offices in Arlington, Va., adding, "But the airplane after that and the one after that. . .We have to look at China as a real competitor for years to come."

He added, "The Chinese are where Airbus was 25-30 years ago. The Chinese government has said they are going to make a significant investment in commercial aerospace. . .They are going to put the best and brightest on the program." Albaugh, who joined BCA from the company's space and defense business units, pointed out that "only three countries have put a human into low Earth orbit and one of them is China. If they can do that, they can do just about anything they want to do."

At the same time, he made it clear that Boeing intends to fight hard for a share of the airliner market in China. "It's a big market--about 200 airplanes a year for a lot of years. Clearly the C919 will command part of that. We want to make sure that we continue to be a major player there," he said.

China is not the only rising aerospace power, he noted. "We're not in a duopoly anymore. You project out 10-15 years and we are competing against the Brazilians, the Russians, the Canadians, the Chinese and the Japanese and we're not just competing against five companies, we're competing against five countries. We have to make moves now to ensure we are competitive 5, 10, 15 years from now."

That reality dovetails with Boeing's decision to open a 787 assembly line outside Washington state, where it sustained a damaging two-month strike in 2008 (ATWOnline, Nov. 23, 2009). "We have customers that expect us to deliver product when we say we are going to deliver that product and we can't afford to have a labor stoppage every time we have a labor negotiation. We need to have alternatives in the event we can't deliver product out of Puget Sound." He also thinks Boeing needs to be "more competitive in Puget Sound. . .We need to be more productive, we need to be more efficient."