By Alwyn Scott
NEW YORK (Reuters) - Boeing Co said it would locate a new factory for building the wings of its forthcoming 777X jet in Everett, Washington, where it currently builds 777 jetliners.
The decision, though widely expected, nevertheless confirms the aerospace giant's plan to build the carbon-composite wing close to where the full jet will be assembled. It marks a departure from the large-scale outsourcing to overseas suppliers that caused significant delay on Boeing's 787 jet.
Locating the factory in Everett is expected to reduce the risk that delivery of the first 777X jet would be delayed beyond the target date of 2020, analysts have said.
In announcing the move, Boeing reaffirmed that it plans to deliver the first of the new fuel-efficient jetliners in 2020. Last year, the company had indicated that it was aiming for around the end of the decade.
The project includes building a 1 million-square-foot factory for fabrication of the wings. The wings will be assembled in the Everett area, with the location to be set in coming months, Boeing said.
The 777X will be the latest version of the company's best-selling widebody jet, a so-called minijumbo, which carries a list price of up to $320 million. The current versions are capable of seating up to 550 passengers in a single-class configuration, according to Boeing. In a more typical three-class configuration, the jet family seats up to 386 passengers and has a range of up to 9,395 nautical miles.
Political and union leaders praised the decision, noting that it ensures thousands of jobs will remain in the Puget Sound area.
"This marks the first step in a bricks-and-mortar commitment by Boeing to build a facility that will be home to the jobs and technology of tomorrow - not in a foreign country or a distant state, but right here in the Pacific Northwest," said R. Thomas Buffenbarger, president of the International Association of Machinists and Aerospace workers, which oversees the local lodges of machinists in Washington.
The jobs were in question last year after Boeing received bids from 21 other states seeking to host the new factory.
Boeing agreed to build the plant in the Puget Sound area after Boeing's 31,000 machinists ratified an eight-year extension to their labor contract in early January. The contract guaranteed the work but also ended contributions to the employee's pension, replacing it with a defined contribution savings plan.
The agreement also ensures that Boeing returns the knowledge about commercial composite wing fabrication and assembly to the United States. Composite wings for the 787 Dreamliner are made in Japan, and Mitsubishi Heavy had proposed building 777X wings in Japan.
The decision "launches Washington into the forefront of advanced composites manufacturing - an industry with exciting growth potential beyond aerospace," Washington state Governor Jay Inslee said.
(Reporting by Alwyn Scott; Editing by Nick Zieminski and Meredith Mazzilli)