Boeing, UAE company make deal for 777, 787 composites
The agreement, announced Tuesday, is a 10-year deal. Financial terms were not disclosed.
Abu Dhabi-based Mubadala Aerospace will have its manufacturing unit, Strata Manufacturing, build empennage ribs for the 777 and vertical fin ribs for the 787 Dreamliner. Boeing (BA) has already begun to provide tooling, training and other support for that work. Strata will deliver the first pieces for the 777 and 787 in 2013.
Additionally, Strata could become a future supplier of the 787 vertical fin assembly, depending on the company's performance on the initial composite work and competitiveness, the two companies said.
Two Boeing locations -- Frederickson and Salt Lake City -- already perform 787 vertical fin work.
Strata began operations in 2010. It already is producing parts for Boeing rival Airbus, for A330 and A340 planes.
The agreements build on the relationship between Boeing and Mubadala, a unit of Mubadala Development Co. The development company is an investment vehicle of the Abu Dhabi government.
The oil-rich sheikdom is diversifying its economy by pushing into high-tech fields such as aerospace and renewable energy.
"The UAE is one of Boeing's most important commercial and defense customers, and its leaders have transformed its economy with aerospace investment and development," Jim Albaugh, CEO of Boeing Commercial Airplanes, said in a statement.
Dubai-based Emirates is the world's largest operator of the Boeing 777. Emirates rival Ethiad also uses the widebody jets and has orders for 41 carbon-fiber 787s -- the most 787 orders of any airline.
Boeing estimates that carriers in the Middle East, which is the company's third-largest market after the United States and China, will order more than 2,500 new airplanes, valued at $450 billion, over the next two decades.
"Emerging markets such as the Middle East are driving growth in our industry today, and we need to tap into new global sources of productivity, innovation and investment -- such as Strata -- to stay competitive," Nicole Piasecki, who oversees international strategy for Boeing Commercial Airplanes, said in a Boeing story about the deal.
Boeing said it has been in talks since 2007 with Mubadala about adding capacity at Strata to support Boeing's composite manufacturing needs.
The local district of the International Association of Machinists and Aerospace Workers was briefed on Boeing's plan, said Connie Kelliher, spokeswoman for the union. The deal with Mubadala will affect only a minimal amount of workers in the region. The Machinists do not anticipate there will be any layoffs, given the rate at which Boeing has been hiring workers in the Puget Sound area over the past few years.
Boeing has been increasing aircraft production, including on the 777 and 787, as it tries to meet airline demand. The company's stock closed Tuesday at $74.09, up $1.41 for the day.
The Associated Press contributed to this report.
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