I’ve already heard some Boeing fanboys crying about if they do this it won’t be ‘American Made’ anymore, but in all honestly, they lost that with the B787 and possibly the B777. Anywho, read and discuss.
Boeing (BA) CEO Jim McNerney is eager to move the company to China. Whether moving Boeing to China means shifting its headquarters from Chicago to Beijing is up in the air. But Boeing already has $600 million in supplier partnerships with China – such as a deal with Shenyang Aircraft Corporation to build an assembly for the 787’s vertical fin. And Stan Sorscher, who spent 20 years at Boeing before taking a post at the Society of Professional Engineers in Aerospace (SPEEA) in 2000, told me that McNerney is hooked on the idea of shifting Boeing to China.
Sorscher told me that McNerney recently hosted a meeting with a group of engineers to discuss how Boeing should build its next aircraft. The conclusion of the meeting was that McNerney is comfortable with the way the 787 was developed but thinks it could use a bit of tweaking – and he’d like to shift more of the design and manufacturing of future Boeing aircraft to China.
This would leave Boeing as a systems integrator which outsources product development to China and other countries. According to Sorscher, the engineers were very nervous in their presentation – perhaps fearing that they would be punished for bringing McNerney the bad news that they believed Boeing should never repeat what it has done in the design and manufacturing of the 787. The engineers reportedly believe that in the future Boeing should take far greater authority and responsibility for aircraft design.
During the meeting, the engineers thought that McNerney was relaxed and that he agreed with them. Sorscher said that the engineers even told him that McNerney was talking through their slides for them. But months later, the engineers realized that McNerney was just seeing what he wanted to see in their presentation.
According to Sorscher, McNerney wants to partner with China rather than compete. He likes the idea of outsourcing the design and manufacturing of future aircraft there and – with some minor tweaks – is comfortable with shifting future aircraft design and manufacturing work to suppliers as Boeing did with the 787.
Who’s right, McNerney or the Boeing engineers? McNerney might argue that outsourcing limits Boeing’s financial risk, gives it access to more global talent while cutting its labor costs. Sorscher is suggesting that McNerney’s approach threatens Boeing’s engineers by giving them less to do. But if Sorscher is right, Boeing needs to return to the problem-solving approach that worked for the company in 1995 with its successful 777 program.
I’d argue that if Boeing can quickly overcome the problems with the 787 that have been publicized in places like the Wall Street Journal – such as structural problems where the wing and the fuselage join and fuselage wrinkling – along with problems that have yet to be formally acknowledged – such as failures in the 787’s Environmental Control System (ECS) and Electrical System (ES) – then McNerney will be proven right.
But at this point, it appears that McNerney may be suffering from confirmation bias – an approach to processing information that stifles inconvenient truths while embracing news that paints the picture that the decision-maker wants to see.
And for the 787 – which has 850 orders and a $154 billion backlog – this style of decision-making could be costly.
Agreed, treason it is, and that’s not a charge thrown around lightly. I wonder if Boeing’s largest customer would do the right thing with this one, or would the people just have to oust said customer, and start fresh.
I watched “Wall Street” last night, and the first thing that came to mind is when Bud was yelling “How much is enough?” at Gordon.
Boeing’s customers care about the price they pay for the aircraft, and that would undoubtedly be lower if it was made in China – at least for the time being. Shareholders also care primarily about the company’s bottom line.
If we could get away from the “how much can I boost the EPS for the next quarter” we would realize that the future is longer than the next three months. You see, long term the Chinese laborer will grow strong unions, and they will want to have income that outstrips inflation, and that will cause hyperinflation, assuming we stay on our current path of relying on China to be our “dirty little secret” sweat shop. Not good for Boeing’s long term bottom line.
I wonder how they ever got an ITAR license for exporting the technology to build the parts? If Boeing trains the Chinese aerospace industry how to make composite parts to US standards, then they almost know how to make a bomber or fighter fuselage too. That’s the kind of thing ITAR was meant to limit.
Another risk in the use of foreign labor is quality assurance – if the Chinese parts save too much money and we start seeing wing root failures, either as a maintenance issue or a liability issue (accidents), I can imagine Boeing going into a high-speed backpedal just to save their reputation for reliability and the market that depends on it.
Isn’t everything made in China cheap crap? Is that really the image Boeing wants to project of themselves? I’m starting to lose all respect for Boeing, they can’t get the 787 in the air, the 747-800 is all but a dream now, and now they’re wanting to outsource to China… what was once a great company is now looking pretty sad.
I’m sick of crap from China. Costco used to be my favorite store but now almost everything they sell (except for some food items) is crap from China. I’ve renamed Costco as China Mart. Shame on Cessna for outsourcing the 162 Dirt Eater (haven’t heard about that lately) and Boeing for even floating this stupid idea. Now we’re importing tires from China? No thank you!
Same thing for Walmart. Sam Walton must be rolling over in his grave now that the store he started went from all American made goods to goods made in a communist country.
Unfortunately, it’s difficult to buy American made items. I, for one, am willing to pay a little extra for stuff made here rather than some dictatorial communist regime.
I like the way you think damiross. I will pay a little extra also to get an American made something. I’m sure obama would love to have Boeing move over there and let alot of trashy short yellow people build our aircraft!(and everything else)
Yet you don’t know about them or how they live, or work, or anything.
Keep in mind that the very computer you are posting this drivel with comes from parts made in China/Japan/Taiwan. Yes, even Dell, HP, Lenovo, and Sony (especially Lenovo and Sony!) use parts from there. So obviously they are smarter than you, as they know what they are doing. They show their brains by the parts in the product you use; so far, you have shown your ignorance and prejudice. Absolutely pathetic.
I don’t ever use the word ‘hate’ for a good reason. But there are only 2 things I hate in this world; hypocrisy, and racism. You have demonstrated both, and as a half Black/half American Indian, I’m offended by your comment. You have lost my complete respect (as if you had it), and I can only hope you grow up and see the error in your words.
Don’t care what you say, and if I lost your respect that is fine, I did not need it. I do not hate people because of there color, I hate people because of there actions and how they think. That is why I don’t like obama ( he is not black anyway) I would have liked Condoleezza Rice for president. It ain’t the color that matters…
Please respect the office at least. Address him as Mr. Obama or President Obama. Also, names are to be capitalized. That’s the POTUS you are disrespecting. Please remember that.
Full disclosure: I am a registered republican and voted for McCain.
