3 ms·
Whats most interesting to me, is he's a former DAC person not a former Boeing one, and he saw first hand how outsourcing harmed DAC/MDC - particularly this sect
by Aloha 3y ago
Whats most interesting to me, is he's a former DAC person not a former Boeing one, and he saw first hand how outsourcing harmed DAC/MDC - particularly this section which caught my attention:
"The correctness of the author's position' on these matters is easily confirmed by two facts. It was the suppliers who made all the profits on the extensively out-sourced DC-10s, not the so-called systems-integrating prime manufacturer. (The same thing has happened on aircraft assembled by Boeing, in Seattle, too.) Also, when plans were being formulated for the proposed MD-12 very large transport aircraft, almost all potential suppliers indicated a preference for being subcontractors rather than risk-sharing "partners". Could they have known more about maximizing profits, minimizing risk, etc., than the prime manufacturer who sought their help even though it could borrow money at lower rates of interest than potential suppliers could? The DC-8 was manufactured and assembled almost entirely within the Long Beach plant, with only the nose coming from Santa Monica. That policy was changed after the acquisition of the former Douglas Aircraft Company by the former McDonnell Aircraft Company, but the change did not improve the company's profitability. It is time for Boeing to reverse this policy."
This closing also caught my eye -
"The fate of the former Douglas Aircraft Company, which was reduced to a systems integrator in the early 1970s by excessive outsourcing of DC-10 production, is a clear indicator of what will happen to other companies which fail to sustain the conditions under which it is possible to launch new products. It is hoped that this sacrifice can save the new and expanded Boeing from a similar fate."
Boeing in the end took the track that led to DAC functionally going out of business, putting thousands out of work in the end. It's not too late to undo it however - buying Spirit back would be one way to go about doing it - but I dont know if the Boeing management is aware enough being that the headquarters is in Arlington, VA, far away from any engineering or manufacturing centers that this is what must be done.
Whats even more astounding to me, this made the Seattle Times in 2003(!), https://archive.seattletimes.com/archive/?date=20030309&slug=boeingcritique09 https://archive.seattletimes.com/archive/?date=20030309&slug...
- panick21_ 3y agoThe problem is that Spirit is much bigger then it was, and Boeing doesn't really have the money to buy Spirit. And in addition, Spirit is supplier to Airbus as well, and they wouldn't want Boeing to have it. They might even buy Spirit themselves.
- Aloha 3y agoBoeing has ~25b cash on hand and Spirit's market cap is ~3b.