Boeing to build its first foreign assembly plant
The plant, to be built in Toowoomba, Australia, will assemble military drones, not commercial jets, which is Boeing’s primary business. But it is an interesting step away from the United States for the company.Boeing’s defense, space and security division has been its most solid revenue stream during the difficult past few years for Boeing. The unit has reported $26 billion in revenue every year since 2018, while the company’s commercial aircraft revenue plunged $41 billion, or 72%, in the face of the Part of the reason that automakers and other manufacturers build their products elsewhere, beyond lower labor costs, is to reduce delivery time and expense when selling to foreign markets. That is not as significant an issue for Boeing, which can fly most of the products it makes to its customers.Boeing already had its largest non-US operation in Australia, with about 4,000 employees, some of them doing pre-assembly work on parts that are shipped to the company’s US factories. It also has a facility in China which was set up to complete the interiors and final painting on the 737 Max commercial jets it is selling there. Part of the reason for locating the plant there was to placate the Chinese government, which must sign off on all jet sales into the country. But that facility, which opened in late 2018, completed only a single 737 Max before two fatal crashes caused a global grounding of the plane. Although most countries are again allowing the plane to carry passengers, the 737 Max remains grounded in China. Meanwhile amid the rising trade tensions between China and the United States, Boeing’s sales into China have slowed to a trickle.
