Douglas Pushes China Jet Deal

McDonnell Douglas said Monday that the company had moved ahead of Boeing in a competition to supply China with passenger jetliners, which would be assembled in Shanghai with parts supplied by McDonnell’s U.S. operations.

The company cited Chinese press reports that officials at the Shanghai Aviation Industrial Corp. said they were in “final negotiations” with McDonnell on a deal to build 170 of its MD-90 jets, which is known in China as the “trunkliner” program.

Shanghai Aviation had not previously said it was in final negotiations with Boeing, and the latest remarks would indicate that McDonnell had outdistanced Boeing, a company spokesman said.

McDonnell has been building MD-80 jetliners with Shanghai Aviation since 1985. On Monday, the firm said it would sell five of the Chinese-built jetliners to international customers, the first time that the firm has exported its aircraft from China rather than its Douglas Aircraft unit in Long Beach.

The moves are the latest evidence that the company intends to lean heavily on Chinese production of aircraft and aircraft parts to substantially cut its production costs for commercial aircraft.

If McDonnell wins the MD-90 order in China, it would also begin exclusive production in China of a new 105-seat aircraft known as the MD-95. The firm disclosed that plan earlier this year at the Paris Air Show.

Boeing, which is competing with McDonnell for the trunkliner program, disputed the firm’s assertion that it has emerged as the leader.

“I would characterize the trunkliner program as still being open for a decision by the Chinese,” a Boeing spokesman said.