Boeing and Mitsubishi Heavy Industries Ltd agree to cost cutting measures for the Boeing 787 Dreamliner

The move is not only in line with U.S. President Donald Trump’s efforts to shift manufacturing back to the United States but also has material cost savings factored in it.

On Monday, Japan’s Mitsubishi Heavy Industries Ltd (MHI) and Boeing Co have announced that they will take steps to reduce the cost of production of Boeing’s 787 Dreamliner’s wings.

MHI is the sole supplier of Boeing’s 787 composite wings. It manufactures them at its Nagoya factory in Japan.

The development is in line with Boeing’s company-wide initiative to drive down costs.

As per the agreement, announced in a joint statement, MHI will pursue increased efficiency in its production system and supply-chain through lean production methods, automation and other activities.

The duo will also research advanced aerostructure technologies for future generation commercial aircraft.

In 2016, MHI had stated, Boeing was seeking a new round of cost cutting measure and changes in payment terms with the U.S. airplane maker ramping up its effort to save cash.

Delays in the 787 development and delivery, due in part to difficulties of managing a global supply chain, prompted Boeing to produce more of the upcoming 777X widebody, including the wings, at home despite MHI’s attempts to keep the work in Japan.

As a result of this agreement, the production of 777X parts by MHI in Japan will fall to 21% from 35% for the 787.

However, MHI will continue to produce fuselage sections for the 777X program.

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