The Wall Street Journal - 24.02.2020

A8| Monday, February 24, 2020 THE WALL STREET JOURNAL.

some suppliers may curb their

business with the aerospace

giant. Some, including Spirit

AeroSystems Holdings Inc., are

already reducing their reliance

on Boeing by pursuing more

work for Airbus and military

customers.

General Electric Co. and Sa-

fran SA, which make MAX en-

gines in a joint venture, are

also looking to expand work

with Airbus, developing an en-

gine for the A330neo jetliner

that at present is powered only

by Rolls-Royce Holdings PLC.

“The big risk is major suppli-

ers don’t bid on the next Boeing

aircraft,” said Kevin Michaels,

managing director of AeroDy-

namic Advisory LLC, which

counts large and small MAX

suppliers among its clients.

So far, most suppliers have

weathered the pause in MAX-

related business. Many have

continued production at lower

rates, stockpiling inventory

and redirecting workers to

make more parts for Airbus

and military jets.

“These guys are going to

lay off workers unless they get

support,” said Mr. Michaels.

A tight labor market for

aerospace engineers and spe-

cialized assembly staff could

make it tough to rehire work-

ers when production resumes,

suppliers said.

Some of Boeing’s largest

suppliers said on recent earn-

ings calls that the MAX pro-

duction halt would hurt sales

and profits this year. GE Chief

Executive Larry Culp said last

week that the company would

burn about $2 billion in cash

flow during the first quarter

due in part to pressure on the

joint venture with Safran.

Airbus has had its own

problems boosting output of

its rival A320neo-range jets

because of shortages of parts

and assembly snafus. It shares

many smaller suppliers with

Boeing and plans to expand its

own production over the next

several years.

Executives at a supply-

chain conference near Seattle

earlier this month said recent

agreements involving Spirit

and GE have provided more

certainty to smaller companies

that they can continue produc-

tion and prepare to resume

shipping parts to Boeing and

other suppliers.

“Most suppliers know when

production should resume and

at what rates,” said John Plue-

ger, chief executive of plane

rental giant Air Lease Corp.,

one of the largest MAX cus-

tomers.

Spirit, one of the biggest

MAX suppliers, was building 52

fuselages a month before halt-

ing output at the end of 2019,

with around 100 in storage

awaiting shipment by rail to the

Boeing plant in Renton, Wash.,

where the jet is assembled.

Boeing recently signed a

deal for the company to pro-

duce 216 fuselages this year

and will lend Spirit $225 mil-

lion this quarter. Separately, GE

and Safran have said they plan

to make engines for around 20

MAX planes a month, half their

output rate last year.

Wichita, Kan.-based Spirit

in January laid off 2,

workers, a third of whom had

made fuselages and wing parts

for the MAX.

An additional 300 workers

have been laid off at other

suppliers, including Berkshire

Hathaway Inc.’s Precision

Castparts, according to regula-

tory filings. Arconic Inc.,

which makes casts and forg-

ings for jet engines, expects to

decide in the summer whether

to cut staff.

Berkshire Hathaway, which

owns stakes in three U.S. air-

lines hit by the MAX ground-

ing, said in its annual report

published Saturday that the

halt in production may hurt

demand for some of its aero-

space products this year. How-

ever, it expects to make up a

substantial portion of this

from extra volume on other

aircraft programs.

Boeing hasn’t laid off any

staff as a result of the MAX

production halt. Some 3,

assembly workers have been

redeployed to other programs

and to develop practices to

improve the efficiency of fu-

ture MAX production, the

company said.

Boeing said it is evaluating

the impact of the production

halt on each supplier.

A Boeing 737 MAX 8 aircraft in production last year. The

company said it plans to stockpile more parts than in the past.

GARY HE/EPA/SHUTTERSTOCK

central city of Qom, the source

of the outbreak and a bastion

of the conservative establish-

ment, only 43% of registered

voters cast ballots.

Supreme Leader Ali Khame-

nei on Sunday accused foreign

powers of using the virus in

their propaganda to discour-

age Iranians from voting in an

attempt to undermine the Is-

lamic Republic.

Expressing “deep apprecia-

tion” for the Iranians who

voted, Mr. Khamenei said Iran’s

election “negates the enemy’s

claim that religion is against

democracy and freedom.

“This negative propaganda

started from months before

the elections and increased as

the elections approached. And

in the last two days, with the

pretext of a disease and virus,

their media didn’t miss a

chance to dissuade people

from taking part in the elec-

tions,” he said, according to

state television.

For decades, elections have

been an important tool for the

Iranian state to portray legiti-

macy domestically and abroad.

A poor turnout will be widely

seen as a snub against the

leadership but won’t materi-

ally impact its ability to gov-

ern as it sees fit, or to crack

down on popular dissent.

The conservative victory

cements a monthslong rise of

factions that have been op-

posed to Mr. Rouhani’s at-

tempts to open Iran up and

strengthen its engagement

WORLD NEWS

out, as their tally dropped to

20 seats from 121 in the last

elections, after thousands of

their candidates were disquali-

fied. Independents won 38

seats, while the share of seats

won by women remained un-

changed at 17, Icana said.

The results weren’t a clear-

cut victory for the conserva-

tive establishment. Interior

Minister Abdolreza Rahmani

Fazli told state media Sunday

that Friday’s elections saw a

turnout of 43%, down from

62% in the 2016 vote and the

lowest in the Islamic Repub-

lic’s history.

Iran’s establishment had at-

tempted to secure a strong

turnout, which would have

provided a measure of legiti-

macy amid popular unrest at

home over its handling of an

economy battered by U.S.

sanctions.

The mass disqualification of

moderate and reformist candi-

dates and attempts by the

leadership to cover up its role

in shooting down a Ukrainian

airliner prompted calls to boy-

cott Friday’s election.

An outbreak of the corona-

virus in Iran also likely kept

some people away from poll-

ing stations. Iran’s health min-

istry on Sunday confirmed the

eighth coronavirus-related

death in the country, among

43 confirmed cases. In the

with Western countries, par-

ticularly with the 2015 multi-

lateral nuclear deal.

Their rise has been fueled

in part by the Trump adminis-

tration’s campaign of maxi-

mum pressure on Tehran. The

U.S. withdrew from the nu-

clear accord in 2018 and reim-

posed harsh economic sanc-

tions on Iran in an attempt to

coerce Iran to negotiate a new

nuclear deal and roll back its

military influence in the Mid-

dle East.

The U.S. also killed Iran’s

most prominent military com-

mander, Maj. Gen. Qassem So-

leimani, in Iraq in January.

The Iranian parliament’s

powers are limited, as the su-

preme leader has the final say

on all matters of religion and

state, including foreign policy.

But lawmakers ratify interna-

tional treaties, pass national

laws and can pressure the gov-

ernment by impeaching minis-

ters.

Even with a larger share of

moderates and reformists, the

departing parliament posed

great challenges to Mr. Rou-

hani. Most recently, a global

antiterror-financing body

blacklisted Iran for its failure

to pass anti-money-laundering

legislation, due to resistance

in parliament to the govern-

ment’s efforts to push it

through.

TEHRAN—Iran’s conserva-

tives won in a landslide in the

country’s parliamentary elec-

tions, strengthening hard-lin-

ers opposed to diplomacy with

the West. But a record-low

turnout dealt a public rebuke

to the establishment’s call for

unity in the face of escalating

tensions with the U.S.

Acknowledging the defeat

of nonconservative factions,

the moderate President Has-

san Rouhani on Sunday called

on the new lawmakers to rep-

resent not just those who

voted but all Iranians.

“Regardless of the result

and political inclinations of

those elected, we thank the

people for the sake of their

presence,” Mr. Rouhani said,

according to the IRNA state

news agency.

Conservative factions won

221 of the 290 seats in Iran’s

legislative assembly, up from

83 in the last elections in

2016, according to Icana, the

parliament’s news service. Re-

formists and moderates lost

BYARESUEQBALI

ANDSUNEENGELRASMUSSEN

Iran Election Gives Boost to Hard-Liners

Low turnout mars

conservative effort to

show widespread

popular backing

Iran’s Supreme Leader Ali Khamenei on Sunday accused foreign powers of ‘negative propaganda.’

OFFICE OF THE IRANIAN SUPREME LEADER/ASSOCIATED PRESS

penses this year, has ear-

marked some of those funds

for cash advances and other fi-

nancial support to suppliers to

address MAX production fluc-

tuations.

“Right now, it’s really li-

quidity and where they need

help or support,” Boeing Chief

Financial Officer Greg Smith

said at an investor conference

earlier this month.

Boeing suppliers said they

have been given three potential

schedules for resuming pro-

duction, ranging from about

100 to 300 planes this year, de-

pending on when assembly

starts. Boeing has said it

doesn’t expect approval of new

software and training regimens

required by regulators for the

plane until midyear.

The longer-term risk is that

Continued from Page One

Boeing Sets

Support for

Suppliers

FROM PAGE ONE

LONDON—A British court

on Monday is set to begin ex-

amining whether to extradite

Julian Assange to the U.S. to

stand trial on spying charges,

the latest episode in Washing-

ton’s pursuit of the WikiLeaks

founder for publishing secret

documents relating to the Iraq

and Afghanistan wars.

A lawyer for Mr. Assange

said a verdict isn’t expected

until late summer or the fall

and will almost certainly be

appealed, setting the stage for

a protracted legal tussle over

a case that has sparked debate

over the scope of press free-

dom in the internet age.

The U.S. in May charged Mr.

Assange with violating espio-

nage laws and conspiring to

hack a military computer in an

18-count indictment unsealed

following his forcible removal

by British police from the Ec-

uadorean Embassy in London,

where he had been living un-

der asylum for almost seven

years.

The Justice Department al-

leges Mr. Assange, a 48-year-

old Australian, conspired with

former U.S. Army intelligence

analyst Chelsea Manning to

break into a military computer

and obtain thousands of mili-

tary logs, diplomatic cables

and other classified docu-

ments that WikiLeaks pub-

lished online in 2010 and 2011.

The cache of raw material

painted a dark picture of the

Iraq and Afghanistan cam-

paigns. It included, among

other things, grisly descriptions

of alleged torture, video show-

ing the death of civilians and—

critically, according to U.S.

prosecutors—the identities of

U.S. intelligence sources.

Mr. Assange, who in his

pre-asylum heyday traveled

the world and appeared to

revel in his status as an anti-

U.S. gadfly, has defended his

actions as legitimate journal-

ism that deserve free-press

protections, including those

afforded by the First Amend-

ment.

U.S. authorities say Mr. As-

sange isn’t a journalist but

rather the figurehead of a

“hostile intelligence service,”

as then-Central Intelligence

Agency Director Mike Pompeo

called WikiLeaks in 2017.

That perspective gained

more traction during the 2016

election, when the organiza-

tion published emails from

Hillary Clinton’s 2016 presi-

dential campaign that U.S. au-

thorities say were stolen by

Moscow. A federal judge in

July dismissed a lawsuit

against WikiLeaks and others

for the leaks, saying the publi-

cation was justified by public

interest.

If extradited to the U.S. and

convicted on all charges, Mr.

Assange could be sentenced to

up to 175 years in prison.

In a sketch of the argu-

ments that Mr. Assange’s legal

team intend to make, Jennifer

Robinson, a U.K.-based mem-

ber of Mr. Assange’s legal

team, said his lawyers will ar-

gue against extradition on the

grounds that the U.S. authori-

ties’ pursuit of the WikiLeaks

founder is politically moti-

vated and that, if extradited,

he wouldn’t get a fair trial.

The hearing that begins

Monday is scheduled to last

five days.

BYJASONDOUGLAS

U.K. to Open Hearing

On Assange Extradition

KABUL—As the U.S. and the

Afghan Taliban started a

seven-day partial truce ahead

of a possible peace deal to end

more than 18 years of war, the

United Nations provided evi-

dence of the conflict’s massive

toll on civilians.

More than 10,000 civilians

were killed and injured from

fighting in Afghanistan for the

sixth straight year in 2019, the

U.N. said in a report. The num-

ber of civilian casualties has

now surpassed 100,000 after

more than a decade of the U.N.

documenting the war’s impact

on civilians, it said.

While the 3,403 civilians

killed in 2019 represented a

10.5% decrease from the year

before, mainly because of a re-

duction in civilian casualties

caused by Islamic State’s

branch in Afghanistan, known

as ISIS-Khorasan, deadly at-

tacks from the Taliban and

other groups increased.

“Almost no civilian in Af-

ghanistan has escaped being

personally affected in some

way by the ongoing violence,”

said Tadamichi Yamamoto, the

U.N. secretary-general’s special

representative for Afghanistan

and head of the organization’s

assistance mission there.

“It is absolutely imperative

for all parties to seize the mo-

ment to stop the fighting, as

peace is long overdue; civilian

lives must be protected and

efforts for peace are under

way,” he added.

The U.S. and the Taliban are

preparing to sign a historic

peace deal next week, after

agreeing to curtail most attacks

across Afghanistan in a deal

that took effect on Saturday.

If the two sides sign the

deal next weekend in Doha,

Qatar, the Afghan government

plans to launch its own direct

talks with the Taliban to forge

a difficult agreement to bring

the militants into the govern-

ment and end the fighting.

But the U.S.-Taliban agree-

ment faces serious hurdles.

There are widespread fears

that any momentum could be

reversed by uncompromising

militants looking to derail the

plans by triggering deadly at-

tacks over the next week. Also,

conflicts in many parts of Af-

ghanistan are fueled by local

disputes, tribal and ethnic ri-

valries, and the factions in-

volved may be only loosely af-

filiated with the Taliban

group.

The new deal stops short of

a full cease-fire, and it re-

mains unclear how the U.S.

will measure success that

paves the way for a long-term

peace agreement.

The peace process could also

come under threat from do-

mestic political developments

in Afghanistan. Opposition pol-

iticians are challenging Presi-

dent Ashraf Ghani’s victory in

the September elections, which

the country’s election commis-

sion confirmed last week.

The Taliban warned that

the announcement was at odds

with the peace process. The

group has refused to recognize

as legitimate any Afghan gov-

ernment supported by the U.S.

BYEHSANULLAHAMIRI

U.N. Details Afghan War’s Carnage

People in the Haska Mena district of Nangarhar province attended a funeral a day after a deadly explosion at a mosque in October.

GHULAMULLAH HABIBI/EPA/SHUTTERSTOCK