Boeing Lands on Airbus Turf, With First European Factory in U.K.

(Bloomberg) -- Boeing Co. has touched down on the turf of its European rival, Airbus SE.

The U.S. planemaker on Thursday opens its first European factory, a 40 million-pound ($52 million) facility in Sheffield, England, that will make system-control components used for 737 and 737 Max narrowbody and 767 widebody jets.

While it's a small beachhead -- the plant will employ only 52 people -- it gives Chicago-based Boeing a platform to expand in the U.K. just as the country leaves the European Union. The divorce could be messy, but for Boeing, there may be opportunities as it goes after more business in the U.K. Its arrival also lends support when other businesses -- including Toulouse, France-based Airbus -- have been sharply critical of the Brexit project.

“We are always looking for opportunity wherever we are around the world," Jenette Ramos, senior vice president for manufacturing, supply chain and operations, said on a conference call with reporters. “We have been very supportive of the U.K. prosperity agenda. We have invested not only in our commercial, defense and services presence in country, and this adds a manufacturing presence to the whole portfolio.”

The factory, set in motion last year, will produce about 10,000 titanium components each month, such as spur gears, shafts and housings. They'll be sent to a plant in Portland, Oregon, to eventually be installed on wings. Boeing set up a research operation in 2001 with the University of Sheffield, and has been growing since. It now employs 2,200 people across the country.

Boeing is trying to increase its share of Britain's defense spending, while battling Airbus globally for dominance of commercial planemaking. The company has been selected for exclusive talks to supply the U.K. Ministry of Defence with a new generation of surveillance aircraft, a contract also sought by Airbus.

Airbus, which makes wings in Wales, warned the government in June that it could leave the U.K. if the country exits the EU single market and customs union without a transition deal. The European company later softened its tone, lending support to Prime Minister Theresa May's Chequers plan.

Production of the 737 remains a focus for Boeing, after engine-related delivery delays earlier this year. “Where we do have issues, we send out teams to be on-site to help," Ramos said.

--With assistance from Julie Johnsson.

To contact the reporter on this story: Ellen Milligan in London at emilligan11@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, ;Tom Contiliano at tcontiliano@bloomberg.net, Brendan Case