By Kevin Meyer
Yesterday I gave you the first lesson of Boeing's 787 Dreamliner outsourcing adventure – the savings from outsourcing design and subassembly manufacturing don't always offset the costs. Today we have the second lesson. A short one, but potentially the most devastating to a company that believes it can save a short-term buck by chasing what looks like a cheaper outsourcing option.
Three years ago I told you how the same overseas companies that Boeing had outsourced some development and subassembly manufacturing to were beginning to develop planes of their own. Key Boeing corporate knowledge – presumably valuable – was being transferred to organizations that could become competitors. So where are we today? Those competitors have arrived.
Recent pronouncements by Boeing chief executive Jim McNerney that the airframer prefers to take a clean-sheet approach to the next-generation narrowbody are underpinned to a degree by a genuine concern about new entrant aircraft from Bombardier and Comac of China. Pointing specifically to Comac's aggressiveness with its C919 narrowbody and the other new entrant aircraft from Canada, Japan and Russia, Boeing Commercial Airplanes vice president of strategic planning and analysis Jerry Allyne told attendees at the 36th annual FAA Aviation Forecast Conference: "We spend a lot of time asking ourselves how we are going to compete."
One way to compete is to avoid giving the competition your key knowledge that has been developed at a huge cost over several decades. But I guess it's too late for that.
Allyne later told ATI and Flightglobal it was tough to predict which manufacturer would survive, but in the long-term with their government support and 50-year planning window, "the Chinese are unstoppable".
A twenty- or thirty-year developmental jump thanks to transferred knowledge doesn't hurt either.
So you saved a buck on labor cost. What have you lost?