Why Donald Trump was wrong about the Boeing-China claim at the debate.
Last night during a spat between Donald Trump and Jeb Bush, Trump said the following:
TRUMP: We don't need that. That's essentially what we have now, and we don't need that. And that's why we're in the trouble that we're in now. And by the way, Jeb you mentioned Boeing, take a look. They order planes, they make Boeing build their plant in China. They don't want them made here. They want those planes made in China.
This is flat out wrong. For those not in the aerospace industry, Boeing has a process called Final Assembly (FA) process which joins all critical components to make an airplane. This is done at three commericial locations which are: North Charleston SC, Everett WA, and Renton WA. The 747, 767, and the 777 are assembled in Everett. The 787 is assembled in both Everett and North Charleston. Lastly the 737 is assembled in Renton, WA.
Last fall, Boeing pitched a 737 COMPLETION CENTER to be built in the future, not a FA plant by any means. This is all post-FA work to be done in China to work on non-critical jobs. In this process, Boeing will fly a FA-complete airplane from Renton after flight tests are done to China. Boeing still has to pay the Washington B&O tax since the FA activity occurred in WA so this is not a tax avoidance scheme. Once in China, China can fit the new 737's with their own seats, interiors, and livery painting. This part of the post-FA process is extremely time consuming and costly for Boeing. So they're making China take the financial charges themselves. The benefit for Boeing is that they deliver more airplanes from Renton WA at a faster rate and it frees up paint buildings in the US for other planes for faster delivery worldwide. Plus they're not on the hook for any post-FA screwup done by the Chinese. The Spirit Aerosystems Wichita location (formerly owned by Boeing) also gets to produce more 737 fuselages which are shipped via rail from Wichita to Renton. It would be extremely difficult to get fuselages shipped from Wichita to China for a FA there. Airbus by comparison ships A320 fuselages from Europe to China by sea to the Tianjin A320 Final Assembly. They also will be flying A320 fuselages from Europe to the US Mobile AL location (currently shipped by sea for now). The closest example of an American company assembling planes in China was McDonnell Douglas with the MD-80 family which did not last very long prior to the Boeing buyout of MD in the early 90's.
So the Boeing claim of doing FA in China is a huge whopper from Trump.
Bush responded that Boeing is a mile from the debate stage. Yes, technically that is true but the North Charleston does 787 Final Assembly in Charleston, not the 737. In Ladson SC which is about 5 miles north of the debate stage, Boeing makes the 737 MAX nacelles via automation and is shipped to Renton, WA. The only connection Charleston has to China is that all of Air China's (BEJ) 787 orders are going to be done in Charleston. Also a number of China Southern 787's were assembled in Charleston as well in the past.
China is in the process of creating their own single-aisle airliner called the COMAC C919 which will be competing against both the Airbus A320 and the Boeing 737 in the Chinese Market. That's why it would be too costly for Boeing to set up an FA in the future when China is just right around the corner with their own plane.