Boeing Makes Its Own Deal With Taiwan

As Taiwanese investors appear to be backing away from McDonnell Douglas Corp., Boeing Co. is moving ahead with plans to build more aircraft parts and sell more planes in Taiwan.

But any connection between the two developments is coincidental, Joe Masterson, director of government and international affairs for Boeing Commercial Airplane Group, said Tuesday.

He confirmed that on June 19, Boeing agreed to establish a testing and training operation at the Industrial Technology Research Institute, a Taiwan government agency.

The operation involves quality-assurance tests on bolts, fasteners and similar aircraft components “that the Taiwanese want to manufacture in Taiwan . . . for whomever they can sell them to,” Masterson said.

The deal followed about a year of negotiations that began before Boeing learned of a plan to sell as much as 40% of McDonnell Douglas’ commercial aircraft operation to the Taiwanese for $2 billion in cash, Masterson said.

In May, Taiwan Aerospace Corp. officials abandoned the investment offer in favor of a plan to buy 20 MD-12s for $2 billion to $2.5 billion after McDonnell Douglas obtains orders for at least 30 of the four-engine jumbo jets.

A month later, McDonnell Douglas said the start of work to build the new plane, which would compete directly with the Boeing 747, had been postponed to next year for lack of buyers.

McDonnell Douglas officials have denied that the Taiwan connection is near collapse. Taiwan Aerospace is partly owned by the Taiwan government.