January 27, 2013
Burning Batteries, Boeing, And Japan, Inc.

New York Times columnist James Stewart wonders whether those burning batteries on Boeing's Dreamliner might be a result of the tacit bargain Boeing has made with Japan.

In the column, Stewart argues that Boeing dominates the market for commercial aircraft in Japan because Boeing uses Japanese suppliers — even when those suppliers might not be the best from a purely economic point of view.

But Boeing has long been dogged by suspicions that in return for its awarding major contracts to Japanese companies, which also receive subsidies from Japan's government, the country's airlines buy Boeing aircraft almost exclusively.

To support his argument, Stewart quotes an aviation analyst, Richard L. Aboulafia, and an anonymous retired Boeing executive.

If this were done formally, in writing, it would be a violation of a trade agreement, signed by both Japan and the United States.  If it is done tacitly as Stewart says, then you would have to ask your local expert on trade agreements whether it would be illegal, and, if so, whether it would be possible to prove its illegality.

Is it possible that GS Yuasa, the Japanese company that made those burning lithium batteries, erred in their design or construction?  Sure.  Although the company is a big battery manufacturer and has made batteries for "over 50 satellites", this was its first battery for a commercial airplane.  And lithium batteries are often hard to get right, as laptop manufacturers can tell you.

Stewart is careful not to accuse GS Yuasa of producing a defective battery, but he certainly wants you to think about that possibility.

Cross posted at Jim Miller on Politics.

Posted by Jim Miller at January 27, 2013 02:50 PM | Email This