Summary
Stealing technology from Boeing 737 is nearly impossible.
Chinese delivery center makes ordering Boeing aircraft more attractive for Chinese airlines.
Move to China frees up space and time that can be used to increase Boeing 737 production rates.
In late 2016, Boeing (NYSE:BA) and future competitor COMAC signed an agreement to open a Boeing 737 completion center in Zhoushan. The center will focus on installing cabins and painting the aircraft. While this does not seem to fit Boeing’s long term view of keeping jobs in the US, it probably was something that was to be expected. In this article, I will have a look at why the net effect will be positive to Boeing and why concerns over theft of technology are overdone.
Technology
One thing I often hear is that opening a completion center or assembly line in China will easily allow the Chinese to take advantage and inspect the aircraft with the ultimate goal to copy the Boeing 737 technology. In my opinion that concern is overdone; the aircraft will be built in the US, after which the final touches such as painting the aircraft and installing the cabin will be done in China.
These activities are no more complicated – I think it is safe to say that they are even less complicated – than maintenance activities carried out by airlines all over the world. There is no way that Chinese could steal technology from completing the aircraft or that they could disassemble an aircraft in order to obtain knowledge about aircraft design. Additionally, one has to take into account that the Boeing 737 is quite an old concept. Even if there is the slightest chance of being able to learn from the Boeing 737, it can only be done on the wing design.
About the Author
Mark Schlarbaum, Irvine, California