Boeing pitches China facility as Trump-friendly

A faster way to make an airplane
A faster way to make an airplane

Boeing's chief executive has reiterated the company's plan to open a facility in China to install the interiors on single-aisle 737 jetliners.

Boeing CEO Dennis Muilenburg said the plan, first announced in 2015, is an important tool to fill the fleets of China's fast growing airlines with Boeing-made jets.

"Every airplane that goes to that finishing center is being built here in the U.S.," Muilenburg said Wednesday. He called it a "targeted investment in China."

"We're able to add volume and increase sales in China, because as we increase sales to China we increase building airplanes here in the U.S., and that's U.S. manufacturing jobs," he said.

Critics of the plan say it shifts work done today by U.S.-based workers and gives the Chinese industry valuable insight into the minute details of preparing a jetliner.

But Muilenburg framed the Chinese production facility as being in line with President Trump's policy aims of increasing manufacturing jobs for Americans.

Related: Trump & Boeing: It's not about Air Force One, it's about China

Boeing anticipates delivering between 760 and 765 airliners in 2017, roughly matching its 2015 record of 762 planes. That year around one-quarter of Boeing's nearly 500 737s went to Chinese airlines, a pace that is expected to continue as China rapidly builds its airline industry.

Boeing leaders are concerned a significant shift in trade policy toward China could have catastrophic effects on the company's plans to sustain and increase production of its lucrative 737 planes.

Boeing builds 42 single-aisle 737s jets each month at its factory in Renton, Washington, and has plans to increase to 57 monthly by 2019.

Currently, each 737 has its seats and other cabin equipment installed by Boeing workers before delivery.

Under Muilenburg's plan, the airplanes that would eventually go to Chinese airlines would be flown to China and outfitted and delivered at the new finishing center.

Related: Boeing: 150,000 American aviation jobs depend on China

Boeing hasn't announced a date for the facility's opening, but last year said it would be located near Shanghai. Airbus has a facility in Tianjin where it assembles A320 airliners. It also plans a finishing center for bigger long-range twin-aisle A330s.

U.S. trade policy towards China has been upended with the arrival of the Trump administration, and Boeing jetliner deliveries are widely viewed as vulnerable if China retaliates.

Boeing, in particular, has been buffeted by Trump and his use of Twitter. Trump has warned the company against cost overruns on the replacement 747s for Air Force One.

Related: Boeing eyes China focus with new sales chief

The aerospace and defense giant has also been pulled into a ongoing public negotiation over the price the latest batch of Lockheed Martin F-35 Joint Strike Fighters. Trump has tweeted he may do a deal with Boeing for older-generation F/A-18 Super Hornets if the F-35 price tag doesn't fall.

Muilenburg and Lockheed Martin CEO Marillyn Hewson have met with Trump several times to discuss the aircraft purchases, among other issues.

"I'm encouraged by his engagement," Muilenburg said. He said Trump's efforts to grow U.S. manufacturing jobs "are all very positive. We've got a voice at the table" on key policy issues ranging from trade posture to defense spending.

Personal Finance

CNNMoney Sponsors