It seems that the reason that this type of strategy is so rampant and insidious is because it makes it easy to substantiate cost cutting goals using unrealistic

It seems that the reason that this type of strategy is so rampant and insidious is because it makes it easy to substantiate cost cutting goals using unrealistic bids from inexperienced subcontractors. The costs that often go neglected in the whole process is the added managerial costs that go along with any outsourced work. For most projects, especially complex ones (as is aircraft design and manufacture), the overhead costs can easily outweigh initial cost saving estimates from outsourcing. More importantly, it is a very short sighted strategy that favors short term cost savings against the long term institutional knowledge that will help sustain it in the long term. With the incredibly long development and production cycles, Boeing might not have the appropriate capabilities in the long term. While Boeing did do the initial design on the 787, they have outsourced much of the detailed manufacturing design to their vendors, leaving an important knowledge gap. Here is an interesting presentation titled "Is Outsourcing Profitable?" http://www.strassmann.com/pubs/gmu/OutsourcingV6.pdf http://www.strassmann.com/pubs/gmu/OutsourcingV6.pdf It presents some case studies and findings that do not substantiate the cost savings claims of outsourcing.