Business: Boeing Rolls On

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But not with British wings

The world has seldom seen such huge international manufacturing alliances as planemakers are now forging. Their aims: to win access to the latest technology, help spread the cost of developing new planes and, not least, to counter nationalistic objections to government airlines buying "foreign" craft. The diplomacy involved can get both complex and testy, as witness the three-cornered negotiations from which Boeing last week came out a big first-round winner.

Boeing sought both British Aerospace wings and Rolls-Royce engines for its new 757, a twin-engine plane that will carry up to 195 passengers on short-to medium-range flights. Simultaneously the British government, which owns the two companies, was being pressed by the French-German-Spanish owners of Airbus Industrie to join them instead in making a narrow-bodied Airbus. Playing a kind of commercial Solomon, Prime Minister James Callaghan tried to win for Britain a piece of both projects.

He let Rolls-Royce make the 757's engines and even agreed to provide government funds to help develop them. He also permitted British Airways, which wanted a plane with Rolls-Royce engines, to order 19 of the 757s. Meanwhile Eastern Airlines, which has Rolls-Royce powered Lockheed Tristars, ordered 21 planes.

But Callaghan decided against British wings for the 757. Instead, the British Government pursued negotiations to join the Airbus consortium. That might strengthen Airbus as a Boeing competitor—if the British are allowed in. But the French threaten to freeze them out if Britain goes ahead with the Boeing deal. While it must find some other builder for its wings, Boeing can rejoice in having emerged from the dogfight with $1 billion-plus in orders—enough to assure the 757 a zooming sales takeoff. -