Tuesday, August 23, 2016

Trump effort to stoke fear over Boeing laughed off by experts

Workers assemble Boeing 787 Dreamliners in the company's massive assembly plant in North Charleston, S.C., on Dec. 19, 2013.
(Bruce Smith -  Associated Press)

Read more here: http://www.charlotteobserver.com/news/politics-government/article97237802.html#storylink=cpy

For over a year, Donald Trump has had a message for voters whose livelihood depends on the aircraft industry, specifically aviation giant Boeing – elect me, or your jobs are moving to China.

Aircraft industry analysts say that claim is unfounded – “side-splittingly hilarious,” in the words of Richard Aboulafia, vice president of analysis at Teal Group, which studies a wide range of aviation-related industries.

“They’re an embarrassing misunderstanding of the aircraft industry,” he said of Trump’s claims.

Yet Trump continues to raise the idea of Boeing leaving the United States. “Oh, don’t worry; if I’m president it won’t happen,” the Republican presidential nominee said last month at a rally in Colorado Springs, Colorado. “If I’m president, Boeing will be very happy – believe me.”

Trump’s favorite example of what might be lost has been Boeing’s “big, big […] beautiful” facility in North Charleston, S.C. The company’s new plant employs more than 7,500 South Carolinians.

“All of a sudden you’re gonna be reading a big front-page story, all over the place, that Boeing is going to leave South Carolina, they’re going to make all their planes in China. Because that’s what they do,” he said in South Carolina ahead of its Republican primary in February, warning that China would bully the U.S. by devaluing its currency.

Aboulafia, however, says there’s one big flaw in Trump’s argument: South Carolina is the very place where Boeing is outsourcing jobs – from its facilities in Washington state.

“He’s standing at the very center of where the jobs are shifting and he’s saying they’re going somewhere else completely,” Aboulafia said. “If there was someone in that crowd who wasn’t confused, tell them to call me and tell me what the hell they’re thinking.”

The South Carolina site has expanded from manufacturing the 787 to designing and producing parts for the 737 MAX and the upcoming 777X. The North Charleston site houses the 787 Dreamliner final assembly and delivery facility, and delivered its 100th Dreamliner in February. It has a rapidly expanding research center with over 400 engineers.

“The South Carolina facility is new, brand new. It’s a huge tectonic shift (from previous production in Seattle) – so the idea of saying, ‘Nope this isn’t the future; China is the future,’ is ridiculous,” Aboulafia said.

Adam Pilarski, vice president of aviation consulting group Avitas Inc., said when he heard Trump’s claims about Boeing, his reaction was, “Are you kidding me?”

“These statements about moving jobs don’t make sense. Obviously he doesn’t know much about this industry,” he said, adding that Trump’s one-size-fits-all approach to manufacturing doesn’t work in the aerospace sector.

“Aviation is different,” he said. “In order to produce stuff, you need a huge amount of supervision, not to mention the processes the FAA has for being approved – it’s very, very labor-intensive in terms of regulatory authority.”

Pilarski, who has observed the aviation industry in China for 30 years, said that while it’s possible to bring all that supervision overseas, it would be hugely expensive compared to staying in the U.S.

Boeing’s new plant in China, which has been one of Trump’s favorite talking points, is unlikely to make a large difference to U.S. jobs.

“That’s a completion facility, which is basically installing carpets and some light paint work. This is not aircraft building,” Aboulafia said, adding that the lack of intellectual property protections makes China unappealing for high-level aircraft work, anyway. It was announced in September that the new plant would install interiors and paint exteriors on Boeing 737 airliners.

“That interior work is not that critical since it doesn’t create a huge value – that’s not where the new technology is,” Pilarski said.

There is another, glaring reason that aviation experts say Trump’s old-fashioned focus on labor is completely off: robots.

“Automation is moving jobs back to the U.S. very fast,” Aboulafia said.

He cited the example of the Boeing 777X, which, starting next year, will be manufactured using robots to make wing skins and spars, a main structural component running the length of the wing. Making a single full-length piece would save on manufacturing costs. In contrast, the composite wing span of the 787 is made in three sections by Mitsubishi in Japan.

“Composite materials are very capital intensive, not labor intensive, and it’s increasingly heavily automated, so what jobs there are depend on a high-level skill set,” Aboulafia said, adding that those jobs are going to be based in the U.S. as aircraft production becomes more automated – making Trump’s Boeing example irrelevant in the long run.

Boeing says the China plant will have no impact on the facilities mentioned by Trump.

“We have no plans to close our commercial airplane assembly plants in either Washington state or South Carolina,” Boeing spokesman Tim Neale said in a statement.

The Trump campaign did not respond to McClatchy’s request for comment.

While he’s doled out dire warnings for Boeing’s future, Trump has also benefited from the company. It was one of the biggest gainers in his portfolio in 2015, earning him $3.96 million on 65,000 shares of the aerospace giant, according to filings with the Federal Election Commission.

Trump is also a fan of its products. His now-famous Trump-emblazoned private jet is a Boeing 757 he purchased from Microsoft co-founder Paul Allen in 2011 for $100 million.

(Vera Bergengruen - The Charlotte Observer)

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