Under a new cooperation agreement with Boeing, Israel Aerospace Industries Ltd. (IAI) will build the empennage leading edges for the 777X, which will enter into service in 2020.
IAI was also awarded an extension of its existing contract for the 777 empennage leading edges through the life of the Programs. These two contract awards follow a strategic agreement signed between the two companies to explore opportunities for future contracting that could be worth as much as several hundred million dollars.
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IAI and Boeing have a 40 year history of working together. Currently IAI supplies Boeing with the empennage leading edge for the 777 as well as the pivot bulkhead, passenger floor beams and door surround details for the 787 Dreamliner. To earn expanded work from Boeing IAI is committed to sustain required levels of performance in areas including quality, delivery, cost, and supply chain management.
The new contact for 777X demonstrates a shared commitment by company leaders to expand the strategic relationship between IAI and Boeing.
“Working with the international aviation giant is significant recognition of IAI’s technological capabilities, ” company management said, following the agreement with Boeing. “Boeing’s vote of confidence in us is also very significant for us.”
Cooperation between Boeing and IAI began 40 years ago, and IAI is considered one of the US company’s strategic suppliers. Company sources said that IAI’s current manufacturing infrastructure was also suitable for Boeing’s future airliner venture, so that it does not appear that any substantial investment in adapting IAI’s production lines to the new plane will be necessary.
It is still unclear how the agreement to extend cooperation with Boeing will affect IAI’s civilian business. Since 2009, the company’s civil aviation division, which converts civilian airplanes and makes executive jets, has accumulated losses totaling $230 million. Following its accumulated losses and deteriorating financial situation, IAI is negotiating with the workers’ organization in the company in an attempt to reach agreements on a comprehensive recovery plan.
IAI management is seeking understandings involving voluntary retirement for 1, 000 workers, mostly from the civilian divisions, which have been responsible for most of the company’s burdensome losses
