Wednesday, September 23, 2015

The China 300 Is What's For Dinner

Three hundred aircraft have been agreed upon in Seattle. It's not the 300 sounding the deal but the location that underscores the deal. China came to Seattle with its Nation's President marking the importance for China rather than Boeing going to China asking for some preferred customer status. This is possibly more important than the order coming from China.

Comac, a Chinese production attempt, is not ready for China's emergence into the aviation market. It needs Boeing as much as Boeing needs China. But China came to Boeing signing away what it wants and needs from Boeing. That is the most important action taken this year for both partners. The three hundred undefined orders would suggest the bulk as a single aisle MAX or NG's. However it also paves the way for follow-on 787 orders not yet announced. The devil is always in the details.

The "General Deal": #300 is Recommended: <<Click left for best results

Perhaps in giving what China wants, Boeing has already moved past what China wants. A clean way to build Single Aisle NG Aircraft, where Boeing can amp up Max production in Renton Washington. It can now can sell more Max down the road in five years. China can now pass a road block when using Boeing's lifetime achievement expertise for building single aisle, which Comac lacks. It's a win-win for both giants. There should be some 787 orders in there for Chinese sweetening. The undefined nature of the Chinese order suggest much more in the paper work than just 300 airplanes ordered and Boeing manufacturing in China using Chinese staffing requirements.

Boeing has “Maxed” its plant facility in Washington, and Boeing pivots toward the orient slicing off the Airbus hoards wanting more and more from the orient. Make no mistake in thinking Boeing will master the Orient with this move. It has bought significant time, and a placeholder in the largest market coming into the world. China will not stop Comac nor its aspirations as an aircraft player. Boeing knows this all too well. It has its own plans founded in the near future and is depending on having a technological edge in the aviation for many years to come. China is expecting to bridge its technological aviation gap it has surveyed with Boeing over the next ten years. This deal has limits for each and its in the paper-work. 

However, it serves both well during its relevant positions found in the current market place. Both will win on this deal otherwise China wouldn't have come to Seattle.