Boeing's First Wing for 787 Arrives From Japan in May

(Corrects eighth paragraph of story published yesterday to say Charleston plant is run by Boeing subcontractors.)

Boeing Co. (BA), the world's second-biggest maker of commercial airplanes, said the first wings for its new 787 model will arrive in the U.S. from Japan by mid-May, with a test flight set for August or September.

Mitsubishi Heavy Industries Ltd. will send the carbon-fiber wings from its factory in Nagoya, 265 kilometers (164 miles) west of Tokyo, to Boeing's main assembly plant near Seattle ``in the next couple weeks,'' Christer Hellstrand, Boeing's director of production for the 787 in Japan, said at a plant visit yesterday.

The U.S. company's 544 orders in three years for the 200- to 300-seat jet make it Boeing's fastest-selling new design ever. The 787 marks the first time that Chicago-based Boeing has hired an outside company to design and produce wings, and its engineers aim to reduce weight and fuel consumption by using more carbon-fiber composites than any other passenger aircraft so far.

``A composite wing of this size has never been done before,'' Bob Noble, Boeing's coordinator of the global building project, said during the Nagoya visit.

The three models of 787 range in price from $138 million to $188 million apiece, according to Boeing's Web site. A successful program may help the company reclaim the industry's top spot from France's Airbus SAS, which delivers more planes than Boeing.

About 35 percent of the new aircraft is being made by three Japanese manufacturers around Nagoya under the largest subcontracting project in Boeing's history.

First Deliveries

Working alongside Mitsubishi Heavy are Kawasaki Heavy Industries Ltd. (7012) and Fuji Heavy Industries Ltd. (7270), which are building part of the front fuselage section and center wing boxes that connect the wings to the body of the plane. Tokyo-based Toray Industries Inc. (3402) is supplying the carbon-fiber tape out of which the parts are being made.

First deliveries from Kawasaki Heavy and Fuji Heavy reached a plant run by other subcontractors in Charleston, South Carolina, in January, before being sent to Boeing's main assembly site in Everett, Washington, outside Seattle.

The Japanese companies have to supply parts in time for Boeing to unveil the plane on July 8, 2007, or 7/8/07, and for the first flight soon after.

``It was originally planned for late August, but if it goes into September, that's not a problem,'' Lori Gunter, a spokeswoman for Boeing, said during the factory tour.

Airbus's parent, European Aeronautic, Defence & Space Co. (EAD), lost 26 percent of its market value on June 14, 2006, after the company said that it faced delays on a new jumbo, the A380.

`Hurdles to Overcome'

``The Japanese partners face hurdles to overcome with their higher rate of participation and incorporating new technology,'' said Yasuhiro Matsumoto, a Tokyo-based analyst at Shinsei Securities Co. ``It's unlikely Boeing and suppliers will fall into a similar situation as Airbus, but concern over possible delays will always linger until the new aircraft is launched successfully.'' He made the comment earlier this month.

More than 50 percent of the 787 by weight will be made of solid pieces of carbon-fiber-reinforced plastic instead of heavier aluminum plates. The plane is designed to be about 20 percent more fuel efficient than the 767 it will replace.

``We're in the final stages of completing the first wings,'' Takashi Fujimoto, head of the 787 program for Mitsubishi Heavy (7011), said during the Nagoya factory visit.

The company specially built the world's longest autoclave, a 40 meter (131 foot) long, high-pressure oven that bakes the layers of carbon-fiber-reinforced plastic into solid sheets in the shape of a wing.

Japanese Suppliers

A record level of work for Japanese suppliers coincides with Japanese airlines being among the 787's top clients. All Nippon Airways Co. (9202) placed the first order for the new model in April 2004, with a contract for 50 aircraft, and will be the first to get the plane, in May 2008. Japan Airlines Corp. has 35 firm orders plus 20 on option, and will get its 787s in August 2008.

That's extending Boeing's dominance in Japan, where the company has an 80 percent share of the market. Tokyo-based All Nippon Airways and Japan Airlines are behind 16 percent of the 544 firm orders for the 787.

The three Japanese contractors joined Boeing's development programs in 1978 to supply 15 percent of parts to build 767s. They extended the collaboration in the early 1990s to make 20 percent of the bigger, wide-body 777s.

Boeing is counting on the 787 to win back dominance of the $60-billion-a-year jetliner market from Airbus. The U.S. company has trailed its European competitor in deliveries since 2003. The U.S. jetliner maker last year beat Airbus in orders for the first time in six years.

Shares of Boeing gained 35 cents to $93.64 in New York Stock Exchange composite trading yesterday, valuing the company at $73.9 billion. Mitsubishi Heavy fell 6 yen, or 0.8 percent, to 770 yen in Tokyo today, for a value of 2.6 trillion yen ($21.6 billion).

To contact the reporters on this story: Masumi Suga in Nagoya, Japan, at msuga@bloomberg.net; Nicolas Johnson in Nagoya, Japan, at nicojohnson@bloomberg.net.

To contact the editor responsible for this story: Patrick Chu at pachu@bloomberg.net.

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.