Boeing In Conflict With President Trump: Iran Deal At Stake

Boeing Co. lands their second jetliner sale with Iran since the Shah era and it could lead to tensions with the current administration. The $3 billion deal has the potential to offer major economic boost for the manufacturer as airline sales slow around the world. A contract of this size could lead to new jobs in the United States but the fact that the planes will be heading to Iran has some in the federal government as well as the public concerned about how they will be used.

Iran Aseman Airlines is set to purchase 30 Boeing 737 Max plans which adds to the $16.6 agreement with Iran Air. The separate deal with Iran Air is still being finalized but if it goes through, it would be the first U.S. aircraft exported to Iran since the 1970’s.

Iran faced U.S. sanctions which prevented Iranian civilian aviation from buying western-made plans and even spare parts for decades. This lead to an outdated airliner fleet which brought with it countless accidents.

The current administration is stuck between a rock and a hard place. On one hand it would encourage Boeing to higher more U.S. manufacturers to meet demand but on the other, many fear Iran plans to misuse these passenger jets and use them for military operations. Expected to be delivered in 2022, President Trump is being pressured to make a decision. Especially when the stakes are so high. Boeing stated that “an aerospace sale of this magnitude creates or sustains approximately 18,000 jobs in the United States”. http://bit.ly/2o6xksy

Another serious concern about shutting down Boeing’s deal is that it would give the European aircraft manufacturer, Airbus Group SE, a leg up on the U.S. manufacturer. With global demand slowing, Iran is one of the few countries actively trying to expand and update their fleet. It would be a huge contract to lose for Boeing and they’re doing everything in their power to ensure its success.

It may be “setting themselves up for conflict with the Trump administration or Republicans in General,” Aboulafia, VP of the Teal Group said. He continued on, saying “To a certain extent they are imposing a level of conflict on Republicans because they are going to have to balance manufacturing jobs to export markets with getting tough on Iran. It’s tough to thread that needle.” https://bloom.bg/2oxPbtx

We will be following these developments closely as they have the potential to dramatically impact manufacturing job growth in the United States. It’s a very delicate situation to navigate and a lot is riding on this deal for the U.S. aircraft manufacturer. Be sure to check back on Manufacturing Talk Radio soon for the latest news, trends and information surrounding the global manufacturing industry.

Sources:
https://www.bloomberg.com/news/articles/2017-04-04/boeing-reaches-3-billion-deal-to-sell-jets-to-iranian-airline
https://www.forbes.com/sites/niallmccarthy/2017/04/05/high-stakes-for-trump-as-boeing-battles-airbus-for-billions-in-iran-infographic/#78f7917634ad
http://www.manufacturing.net/data-focus/2017/04/boeing-and-airbus-battling-billions-iran