China Drastically Scales Back Project to Build Boeing MD-90s

BEIJING —  China scaled back a project to build 20 Boeing Co. MD-90 aircraft in Shanghai, setting back the nation’s efforts to play a major role in the international civil aviation market.

China will now build three MD-90 jets, aviation officials said. A separate order to buy 20 MD-90s built at a former McDonnell-Douglas plant in Long Beach, nine of which are already in service, won’t be affected, they said. McDonnell Douglas was acquired by Seattle-based Boeing last year.

The demise of the so-called Trunkliner follows the failure of a Chinese plan to build a 100-seat aircraft with members of Europe’s Airbus Industrie. That project was all but written off because the partners couldn’t agree on technology transfers and pricing.

China’s budding aerospace companies “have had to lower their sights,” said Paul Lewis, a Singapore-based analyst at Flight International, an industry journal. “It’s pushed their plans to build their own aircraft way back.”

Chinese officials blamed last year’s takeover of McDonnell Douglas by Boeing as the main reason for gutting the Trunkliner project. Boeing plans to stop producing the MD-90s in Long Beach by 2000.

“It’s not whether we want to produce MD-90s or not,” said Xie Yingchun, director of international cooperation with Aviation Industries of China. “If Boeing cancels such a product, we can’t produce it, either.”

The original agreement--for a total of 40 aircraft--was valued at $1.6 billion when it was signed in July 1996.

Boeing shares fell 94 cents to close at $37.88 on the New York Stock Exchange.