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View Diary: Boeing's outsourcing strategy in the spotlight as FAA grounds the Dreamliner (196 comments)

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  •  Dr Hart-Smith, 2001 calls out Boeing (7+ / 0-)

    An article in the LA times, Feb 15, 2011 starts with

    The biggest mistake people make when talking about the outsourcing of U.S. jobs by U.S. companies is to treat it as a moral issue.

    Sure, it's immoral to abandon your loyal American workers in search of cheap labor overseas. But the real problem with outsourcing, if you don't think it through, is that it can wreck your business and cost you a bundle.

    Case in point: Boeing Co. and its 787 Dreamliner.

    This article goes on to list some of the issues Boeing has had. Near the end of the artcle is this paragraph:
    Boeing can't say it wasn't warned. As early as 2001, L.J. Hart-Smith, a Boeing senior technical fellow, produced a prescient analysis projecting that excessive outsourcing would raise Boeing's costs and steer profits to its subcontractors.
    That prescient analysis is available here, and I recommend anyone really want to under this issue should add this to their reading list. This article was from before the quality issues made the news, but when cost overruns were the concern.

    Just your average every day Autistic hillbilly/biker/activist/union steward with an engineering degree.

    by Mentatmark on Fri Jan 18, 2013 at 09:26:00 AM PST

    •  But it's also possible that the 787 would not have (2+ / 0-)
      Recommended by:
      Mentatmark, GwenM

      ...been viable had it not been for potential orders from the nations where the subcontractors are.

      Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. www.hamiltonproject.org

      by PatriciaVa on Fri Jan 18, 2013 at 09:43:37 AM PST

      [ Parent ]

      •  I don't think that was as much of a (2+ / 0-)
        Recommended by:
        elwior, Mentatmark

        factor as the overall outsourcing craze was at the time.  Investor pressure to change the business model would have been a bigger driver.  The outsourcing sites that were selected were surely used as leverage to drive sales, though.

      •  It's like the military contracting that spreads (1+ / 0-)
        Recommended by:
        PatriciaVa

        their business into dozens of congressional districts.  This guarantees support in Congress when their lobbyists come calling.

        More suppliers, more transportation, more problems with coordination among the technical people.  It's massively wasteful economically and environmentally.  The product suffers.

        Imagine all the people, living life in peace. You may say I'm a dreamer, but I'm not the only one. John Lennon

        by GwenM on Fri Jan 18, 2013 at 03:12:52 PM PST

        [ Parent ]

    •  The Seattle Times has been reporting (3+ / 0-)
      Recommended by:
      JayBat, elwior, Mentatmark

      on the issues with Boeing's outsourcing and their labor downsizing pretty comprehensively for years now.  None of this is really new except that some of the worst predictions made by people who thought that the change in their business model was going to cause the company trouble continue to be proven more right than wrong.

      •  The issues that are currently showing up... (0+ / 0-)

        ...aren't something that I would rate as a "big problem". Most aircraft have these types of issues when they first are produced (maybe a little less severe, but...).

        Boeing is going to work with its suppliers, release some ECOs, and eventually these problems are going to go away.

        I could be wrong, but I doubt that Boeing is going to have substantial recurring engineering issues like these issues. I suspect that any issues they have with outsourcing are going to be supply chain and delivery problems.

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Fri Jan 18, 2013 at 10:27:15 AM PST

        [ Parent ]

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