Plenty of exciting news has flowed out of the Paris Air Show this week. As usual, commercial aircraft giants Boeing
Earlier this week, TheNew York Times reported that Japan had agreed with France to begin research into a new commercially viable supersonic jet. Admittedly, the effort is off to a pretty small start, because the companies involved, including Kawasaki Heavy Industries, Mitsubishi Industries, and the European Aeronautic Defense and Space Co., pledged to invest a total of just $1.8 million a year over three years. Notably, the Japanese government's Aerospace Exploration Agency also will have a hand in the pact.
Despite its modest size, the new agreement is another sign that Japan is becoming more interested in creating a home-grown aircraft producer. The move to establish a domestic champion is only natural considering the growing sophistication of the Japanese aircraft industry, which has played an increasingly important role in developing Boeing planes over the years. Aerospace analyst David Pritchard notes that via the new 787, Boeing is transferring a large amount of technology to the same Japanese companies now expected to work on the supersonic project. Japanese firms are slated to build 35% of the 787's structure, and Japanese engineers have had a significant amount of input into design and manufacturing specifications for the plane.
Of course, a Japanese company able to compete with Boeing and Airbus won't pop up overnight. But Japanese firms now have access to the best technology available. Investors should keep a close watch on the competitive landscape. Japanese giants have been known to leapfrog American competitors, and the research into the supersonic project may be the beginning of just such an effort.
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Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.