Trump & Boeing: It's not about Air Force One, it's about China
by Jon Ostrower   @jonostrower
December 9, 2016: 2:47 PM ET    


Boeing executives were blindsided by Donald Trump's Tuesday comments about the cost of Air Force One, but those weren't the tweets that worried America's largest exporter.

Many former and current Boeing executives say they're far more worried about Trump's antagonism toward China, the largest and most important growth market for the crown jewel of American manufacturing.
"The vulnerability to China is pretty clear," said one former senior Boeing executive.

In contrast to the long term stakes over Boeing's future in China, the flap over the cost of Air Force One lasted 24 hours.

Boeing would be a prime target in any retribution by China if Trump follows through on his campaign threat to impose a hefty tariff on Chinese imports.

A shift of orders to Airbus would likely cause a rippling drop in output for Boeing, a loss of jobs, and, crucially, a loss of market share that would give Airbus the ability to lower prices and win other deals.

One-quarter of the nearly 500 Boeing 737 jets delivered in 2015 went to Chinese airlines, serving a fast-growing middle class that's as large as the entire U.S. population. The market is worth a trillion dollars over the next 20 years.
Everyday, Boeing's factories are filled with colorful jets for Chinese airlines that Americans won't recognize: Xiamen, 9 air, Donghai, Ruili, Hainan, Hebei, Shandong and Shenzhen.

Starting with the unexpected congratulatory phone call with the President of Taiwan in the days that preceded the Air Force One tweet, Trump upended decades of U.S. foreign policy that tiptoed around the nation's relationship with Taiwan.

The worry among current and former Boeing leaders is that increased antagonism toward China on trade or an even closer diplomatic posture toward Taiwan may have consequences for U.S. businesses - and Boeing has the most to lose.

http://money.cnn.com/2016/12/09/news/companies/trump-boeing-china/index.html

Last edited by Goose (12/10/2016 11:22 am)