Mitsubishi Heavy Industries yesterday said it will establish a wholly owned subsidiary to produce commercial aircraft components in Hanoi, Vietnam. Plans call for the new division, dubbed MHI Aerospace Vietnam Co., Ltd. (MHIVA), to begin assembling metal aircraft components by the spring of 2009, starting with flaps for the Boeing 737. MHI credited Boeing for supporting the initiative, launched in an effort to lower labor costs and focus Japanese resources on “high-value-added operations.”

Capitalized at $7 million, MHIVA will open in January with 50 employees, but plans call for an expansion of the workforce to about 200 once production gains momentum. Mitsubishi has chosen a 4.7-acre site in the Thang Long Industrial Park, some 10 miles northwest of central Hanoi, to build a production plant covering 43,055 sq ft in floor area. Production schedules call for delivery of flaps for two airplanes each month early in 2009 and eight a month by the end of 2010, followed by 10 each month in 2011. Although parts for the flaps will at first come from either Japan or neighboring countries, such as Malaysia and China, Mitsubishi expects MHIVA will gradually expand local procurement in Vietnam as its industrial base develops.

The move follows a wider industry trend toward shifting production outside of home countries. “The company decided to locate MHIVA in Hanoi, Vietnam, not only because it was able to secure a production site within a Japanese-affiliated industrial park with a good industrial infrastructure, but also in view of such factors as Vietnam’s diligent labor force, robust economy, stable public security and the presence of overseas transport routes,” said Mitsubishi in a statement.