Mitsubishi shouldn’t be worried over support following Boeing-Embraer deal: BGS chief

July 18, 2018, © Leeham News, Farnborough: Mitsubishi’s MRJ will be supported even if Boeing and Embraer complete a deal to form a new company in which Boeing is an 80% shareholder.

Embraer’s E175 and E190 jets will compete with Mitsubishi’s MRJ70 and MRJ90 respectively. Boeing entered into a product and parts support agreement with Mitsubishi when the MRJ program was launched.

Stan Deal, CEO of Boeing Global Services, said in an interview with LNC that despite the competition, BGS will honor the Boeing commitment to Mitsubishi.

BGS already supports Airbus aircraft, which of course fiercely compete with Boeing.

Balancing competition

BGS’s mission from Boeing Co. CEO Dennis Muilenburg is to achieve $50bn in revenue in 10 years. Part of the corporate strategy to do this is for Boeing to bring in-house production of key components previously outsourced.

On the commercial side, this includes but is not limited to seats, avionics, the 777X wings, 737 MAX engine nacelles, the auxiliary power unit and more.

MRJ90 test airplane in the colors of launch customer ANA. Photo via Google images.

Deal’s group offers aftermarket services not only on these but also other component still being produced by its own supply chain. This places BGS in competition with its own vendors.

Mitsubishi was alarmed, according to press reports, about the Embraer deal and what impact this might have on its own agreement with Boeing to support the MRJ.

“Mitsubishi has been a partner on production of [Boeing] airplanes when they stood up the MRJ,” Deal said. “We did a lot of work around the support side. We can continue to do the work tech publications, work around product support-type arrangements—the classic entitlement piece of taking an airplane to market. We’ll continue to fulfill that.

“When we stood up the services unit, we always said we would do work not only as a service company on Boeing airplanes, but we would explore other people’s airplanes,” he said.

Deal noted that airlines and defense worlds fly Boeing and other brand airplanes. When total fleet care solutions are considered, “if you can’t address the full complement of the fleet for an airline or a government, then the opportunity costs that come out are less. The more you can address a total solution, the more they can take out infrastructure.”

The result: Boeing works around some other OEMs in support of their products.

If the Embraer deal proceeds and when it’s closed, BGS will go to market with a total offering with Embraer aircraft and Boeing airplanes, Deal said.  BGS will look for synergies between EMB and Boeing services.

When it comes to Mitsubishi, the company should not be worried, Deal said.


12 Comments on “Mitsubishi shouldn’t be worried over support following Boeing-Embraer deal: BGS chief

  1. All I can say to Mitsubishi is, good luck. Boeing isn’t going to play nice when competing the E-jet family against the MRJ in competitions.

    • Presumably BA will tread a little lightly on this. Mitsu’s providing a bunch of BA parts for the 787 and 777. Last thing BA should want is Muilenburg being summoned to Japan for some verbal seppuku! LOL

      • Rational behavior doesn’t appear to be what MAGA is all about. P*ss*ng on other peoples cereal is all the rage now.

        • No doubt, Uwe. Rational thought, facts, and reason are not within the purview of the MAGA crowd.

          Some of us Americans will continue to fight those chuckleheads until the last days of the republic, despite their best efforts to destroy it or let it be subservient to the personal interests of Donald Trump

      • The name on the plane is Mitsubishi but it’s a combined effort by all the big Japanese airframers, kawasaki and subaru( Fuji)

        • Even more reason for BA to tread lightly. But it’ll be up to Mitsu in the end to get out and sell, sell, sell!

    • In normal talk, Boeing got engaged to Embraer, and now Boeing is trying to convince Mitsubishi it will get enough attention being the side piece.

  2. The MRJ might fit neatly under the A220 series, longer term. Under a kind of JV construction. The Airbus consortium is very global anyway these day, assembly in Canada, US and China and parts & assemblies from everywhere.

Leave a Reply

Your email address will not be published. Required fields are marked *