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>After acquiring McDonnell, Boeing went on a spree of divestments where parts plants that supplied them were spun off into independent vendors. This isn't defa

>After acquiring McDonnell, Boeing went on a spree of divestments where parts plants that supplied them were spun off into independent vendors. This isn't default bad. Do you build everything at your company, or buy some things? Specialization can be a boon. >with Boeing having relatively little leverage in improving this state of affairs (one may argue that it's not terribly interested in improving the state of affairs). One might argue that Boeing isn't interested making sure their planes are safe? Absurd.

lumost 3y ago
There is something different that happens in a vertically integrated engineering firms. In the event of a critical defect - very senior engineers will find out the specific people who caused the defect, and vet that the appropriate corrective actions have taken place. Likewise, if you do your job well on sub-assembly 529ca - you have the opportunity to be noticed and move up to bigger projects without changing firms. These records are persistent in the company, and it can be highly embarrassing and impactful to have caused the issue many years later. When you've outsourced the supply chain, personal responsibility is washed in a sea of lawyers, managers, buyers, and other personnel - the incentive to do your job to the 80-90% of completion and no more is extremely strong as it makes everything look better over the next 2-3 years.
- WanderPanda 3y ago
  You raise a very good point. If you join a company with the goal of retiring in the same company after a a 40-year career, the incentives are much better aligned than with contractors. Maybe the demise of the 40-year career in modern companies is one of the bigger elephants in the room
  - lumost 3y ago
    I'm not sure you even need a 40 year career. In my current (Tech/Software) shop, the Distinguished Engineer (Lead engineer for a group of ~2-5k engineers). Can very quickly learn your name from your successes and failures. The highest priority projects will pull talent from these successes. In the span of 2-4 years you can go from sub-assembly 1234 to lead of (biggest project). In theory, you can pivot the entire knowledge "supply chain" to a different problem in 1-2 years in this manner. Shifting a contracted supply chain could take decades if it was even possible.
potatolicious 3y ago
> "This isn't default bad. Do you build everything at your company, or buy some things? Specialization can be a boon." You seem to be under the impression I'm arguing a point that isn't in the text of my post. It's not material whether this is "default bad" - what matters is that it was bad in this specific instance. The claim isn't "all outsourcing bad", the claim is a very specific "Boeing's outsourcing of these specific parts directly led to the safety crisis the company is facing now". This is particularly salient as pre-divestment, what is now Spirit, did not have a notable QC problem. Boeing has in the past faced safety crises over the design of its aircraft, but not their manufacture. Not everything is a proxy argument. If I mean my argument to be generalizable, I will state it clearly rather than leave it up to others to impute.
hakfoo 3y ago
The build-or-buy debate makes sense with some context: * There's a meaningful market for the components you buy Does Spirit contract out to Airbus and Tupolev to build THEIR fuselages too? Are there other companies that could reasonably bid for the 737 contract? It feels like there isn't a real market here; they just divested a captive supplier for paperwork reasons. * The stuff you're buying isn't your core competence Sure: buy the fabric for the seat covers from a supplier. Hell, buy the whole seat. But airframes are sort of Boeing's core competency-- too much of the business rides on them to put them at arm's length.

lumost 3y ago

There is something different that happens in a vertically integrated engineering firms. In the event of a critical defect - very senior engineers will find out the specific people who caused the defect, and vet that the appropriate corrective actions have taken place. Likewise, if you do your job well on sub-assembly 529ca - you have the opportunity to be noticed and move up to bigger projects without changing firms. These records are persistent in the company, and it can be highly embarrassing and impactful to have caused the issue many years later. When you've outsourced the supply chain, personal responsibility is washed in a sea of lawyers, managers, buyers, and other personnel - the incentive to do your job to the 80-90% of completion and no more is extremely strong as it makes everything look better over the next 2-3 years.

WanderPanda 3y ago
You raise a very good point. If you join a company with the goal of retiring in the same company after a a 40-year career, the incentives are much better aligned than with contractors. Maybe the demise of the 40-year career in modern companies is one of the bigger elephants in the room
- lumost 3y ago
  I'm not sure you even need a 40 year career. In my current (Tech/Software) shop, the Distinguished Engineer (Lead engineer for a group of ~2-5k engineers). Can very quickly learn your name from your successes and failures. The highest priority projects will pull talent from these successes. In the span of 2-4 years you can go from sub-assembly 1234 to lead of (biggest project). In theory, you can pivot the entire knowledge "supply chain" to a different problem in 1-2 years in this manner. Shifting a contracted supply chain could take decades if it was even possible.

potatolicious 3y ago

> "This isn't default bad. Do you build everything at your company, or buy some things? Specialization can be a boon." You seem to be under the impression I'm arguing a point that isn't in the text of my post. It's not material whether this is "default bad" - what matters is that it was bad in this specific instance. The claim isn't "all outsourcing bad", the claim is a very specific "Boeing's outsourcing of these specific parts directly led to the safety crisis the company is facing now". This is particularly salient as pre-divestment, what is now Spirit, did not have a notable QC problem. Boeing has in the past faced safety crises over the design of its aircraft, but not their manufacture. Not everything is a proxy argument. If I mean my argument to be generalizable, I will state it clearly rather than leave it up to others to impute.

hakfoo 3y ago

The build-or-buy debate makes sense with some context: * There's a meaningful market for the components you buy Does Spirit contract out to Airbus and Tupolev to build THEIR fuselages too? Are there other companies that could reasonably bid for the 737 contract? It feels like there isn't a real market here; they just divested a captive supplier for paperwork reasons. * The stuff you're buying isn't your core competence Sure: buy the fabric for the seat covers from a supplier. Hell, buy the whole seat. But airframes are sort of Boeing's core competency-- too much of the business rides on them to put them at arm's length.