Boeing's Royal Wingman unmanned aerial vehicle prepares for its first test flight. Final stage assembly to take place at Australian factory = 21st / Boeing
(CNN Business) Aircraft giant Boeing has announced plans to open a new factory in Australia to do the final assembly of its products for the first time outside the United States.
The factory will be built in Toowoomba, Australia, and will assemble military drones rather than civilian jets.
For Boeing, the defense, space and security business has been the most stable source of income over the past few years. Since 2018, the division has generated $26 billion in revenue each year. Commercial airline revenue, meanwhile, fell by $41 billion, or 72 percent, due to problems with the 737 MAX and the impact of the coronavirus.
In 2020, Pentagon contracts accounted for about 83% of the defense business, but it also had a significant number of foreign customers.
The Australian-built Royal Wingman drone was designed by Boeing's Australian team. The plant is expected to create 3,500 new jobs by 2028. The only confirmed customer for the drone so far is the Royal Australian Air Force, but Boeing plans to export the drone to militaries around the world.
There was a time when America's manufacturing giants made all or virtually all of their products in the United States, but now it's almost exclusively Boeing. General Motors and Ford, for example, make more cars in China and Mexico than they do in the United States.
The reason why American manufacturing companies manufacture products overseas is not only to reduce labor costs, but also to shorten delivery times and cut costs when selling to foreign countries.
Boeing Australia currently employs about 4,000 people. It already has the largest scale outside the United States, assembling parts there and transporting them to factories in the United States.