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Czech Republic: Boeing And Skoda To Increase Cooperation

  • Breffni O'Rourke

Prague, 1 October 1997 (RFE/RL) -- The leading U.S. aircraft manufacturer Boeing and the Czech heavy industry giant Skoda Plzen are moving towards increased cooperation on world markets.

In a memorandum of understanding signed this week at Boeing headquarters in Seattle, the two sides agreed to pursue wide-ranging, and as yet partly undefined, business opportunities in military and civilian fields.

A senior spokesman for Skoda Plzen, Jaroslav Hudec, told RFE/RL that working groups from the two sides will meet soon to explore the exact sectors and markets for cooperation.

What is interesting in the alliance is that it represents largely new territory for both Boeing and Skoda Plzen -- the one is a dominating presence in world aviation, the other has vast experience in industrial products like conventional and nuclear power plants, ground transport systems and cast metal parts.

The head of Boeing's European Office in Brussels, Jim Frank, told RFE/RL today that this cooperation fits in well with Boeing's stated strategy of becoming a truly global concern. Frank said that a special business unit has been created within Boeing to seek suitable directions for expansion beyond the core interest of aviation.

Hudec in Plzen said that one clear benefit for Skoda will be access to Boeing's advanced technologies and its highly efficient methodology in contruction and production processes.

He noted that Skoda is not planning to become involved in whole aeroplane construction. Its interest lies more in gaining Boeing support for cooperation with companies supplying components to the aircraft maker. As one example, he notes that Skoda already sends $10 million worth of components to General Electric-USA for use on Boeing projects, and it would like to increase this liaison and develop others.

On the military side, Boeing says the agreement opens up possibilities for cooperation with Skoda daughter companies, which will be introduced to a broad range of groups in what is called the Hornet Industry Team. Companies in the Hornet team are sharing in the production of the F/A-18 Hornet fighter plane of Boeing's military arm McDonnell Douglas. The Hornet is a candidate for major contracts with East and Central European air forces as they re-equip in the coming years.

Linkage with the Hornet Industry Team is important for Skoda, as it brings it within a circle of leading-edge companies like Hughes radar systems and Northrop industries. The Hornet team so far has generated business worth $13 billion. Mike Sears, President of McDonnell Aircraft and Missile Systems, said Skoda's tradition and production potential constitutes a significant partner for Boeing.

Skoda Plzen ranks among the most important Czech industrial companies, with 30,000 employees at its main factory. It is part of 11 joint ventures around the world. In the United States, it's involved in delivering hundreds of trolley buses to the cities of San Francisco and Dayton. Contrary to popular assumption, Skoda Plzen does not build the Skoda automobiles -- that's done by a separate company located elsewhere in the Czech Republic.