> Boeing outsources a lot of the production of components for its aircraft because it’s cheaper as part of an overall shift in strategy that dates to CEO Harry Stonecipher who had been CEO of McDonnell Douglas
Outsourcing is not the problem; It is Boeing Management's mindset which seems to have completely given up on Design/QC/QA as it was strictly practiced earlier during its heydays.
That depends. if you look at the history of the 787 project, Boeing way overestimated their suppliers' ability to take on major engineering and manufacturing tasks. But they all signed contracts that said they could. Everyone who has let a contract for outsourced software knows an outsourcing shop would never blow smoke up your ass, right?
For the 787 bad outsourcing cost Boeing literally $10s of billions in overruns and a plane that was initially sold at a loss of tens of millions per unit and is unlikely to ever make development costs back.
That's Harry Stonecipher's legacy. He was going to show those arrogant 777 engineers how it's done when a tough manager takes over.
I think generally vertical integration produces higher quality products. Outsourcing to other firms trying to save money comes with its own hidden cost not part of the price tag.
If the article is accurate, it seems like it's a specific type of outsourcing causing problems here. Namely, that the thing they outsourced wasn't a commodity. Spirit is selling them shit but they have to suck it up and try to patch the things together, because there is no one else to buy from.
Exactly: Spinning off Spirit makes no sense in terms of outsourcing: It was Boeing's own factory that formed the basis of Spirit, which made Spirit a sole-supplier of critical components with exactly zero technical advantage, and exactly zero capacity advantage over doing it in house.
So why do it? It makes return on net assets look better? It makes unions fragmented and weaker? It provides a third party to blame when they shortchange quality? It takes soon-to-be obsolete production capital off the books? But nothing that actually makes anything about making planes better.
I thought the McDonnell Douglas management taking over control (and thus destroying Boeing engineering culture) was the interesting part to point out, not the outsourcing.
Ah yes, there it is.