787 Dreamliner teaches Boeing costly lesson on outsourcing

The airliner is billions of dollars over budget and about three years late. Much of the blame belongs to the company’s farming out work to suppliers around the nation and in foreign countries.

By Michael Hiltzik
February 15, 2011

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.

much of the blame belongs to the company’s quantum leap in farming out the design and manufacture of crucial components to suppliers around the nation and in foreign countries such as Italy, Sweden, China, and South Korea. Boeing’s dream was to save money. The reality is that it would have been cheaper to keep a lot of this work in-house.

More at link

http://www.latimes.com/business/la-fi-hiltzik-20110215,0,442445.column

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10 Comments

Filed under Ethics, Wichita

10 responses to “787 Dreamliner teaches Boeing costly lesson on outsourcing

  1. CapnAmerica

    HA HA.

    Who knew, doing the right thing was also doing the smart thing?

    Maybe there’s something to this “unseen hand of the marketplace” after all . . .

  2. indypendent

    I was told by a smart businessman that once you send your product out to someone else to build – you lose all control of the quality.

    But in the last few decades, I think the emphasis has not been on quality – but quantity done faster and cheaper.

    Maybe the pendelum is swinging back to people willing to put in the work and money for quality?

    • indypendent

      BTW – I agree about not making outsourcing a moral issue.

      If someone is going to outsource American jobs just for a bigger profit, I don’t think that same person really cares about Americans needing the jobs – do you?

      I remember the old movie ‘It’s a Wonderful Life’. Mr. Potter had most of the money in town but he did not have what was the most valuable of all things – the respect and admiration of the townspeople the way George Bailey did.

      That is why George Bailey and all the men like George will win in the long term.

      I might be cynical about politics but I have to hang on to the hope that people are basically good. And when treated like a piece of dirt beneath the corporate masters – the good will eventually triumph.

      I have to keep that hope alive for my two grandkids and their future.

      I believe the pendelum pretty much stays the course in the middle – even if it does look like the Social Conservative Tea Party Republicans want to drive us all off the cliff.

      • Exactly the two people I thought of — Mr. Potter and George Bailey! Even if Mr. Potter wins in this stupid greedy world, I’m behind the George Baileys, and my life will be happy pursuing meaningful relationships with people, helping where I can, being willing to ask for help when I need it.

  3. danieljacobjingleheimer

    Nah, it can’t be do to poor management practices. It’s always the fault of those damned union thug goon Bolshevik types.

    • My name is Jacob jingle heimer smith! too. Whenever we go out, the people always shout — JohnJacobJingleHeimerSmith!

      You’ve been hanging with the wrong crowd. The word union does not need to be modified with the word thug, or goon! Read what the Rude Pundit says Abraham Lincoln had to say about labor, the right to strike… After all, it is presidents’ day!

      http://rudepundit.blogspot.com/

      • “Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.”

  4. danieljacobjingleheimer

    Lincoln?

    The Lincoln of the ‘Party of Lincoln?’ Aren’t they the Republicans?

    This ‘Lincoln’ character sounds like a flippin’ socialist.

    Wasn’t this ‘Lincoln’ character alive at about the same time as Karl Marx?!?

    I’ll take “Things that make you hmmm….” for $800, Alex!

    • Doesn’t sound like any Republicans I’ve met in my lifetime. Should we be posting on the what has and hasn’t changed thread? đŸ˜‰

  5. WSClark

    Having spent many years in Materials Management for manufacturing companies, I was often responsible for purchased product and qualifying vendors. I was extremely strict when it came to sourcing product.

    (I rarely had to outsource our work, unless we were over scheduled in our own shop or we did not have the capabilities.)

    I would tell a potential supplier that I had three criteria for selecting a vendor, quality, delivery and price, in that order. That was somewhat bothersome for suppliers that thought that they could sell based on price alone.

    My logic was quite simple. Price meant nothing if the product wasn’t delivered on time. The delivery meant nothing is the quality didn’t meet standards.

    Those simple requirements served me well throughout my career. Perhaps the folks at Boeing should have taken a KISS approach.