International Tanker Programs: The KC-767 International Tanker provides unrivaled tanker capability and operational flexibility. Technology advances include a fifth-generation boom, second-generation remote vision system, new wing air refueling pods and hose drum unit.
V-22 Osprey: A joint service multi-role combat aircraft that uses tiltrotor technology to combine the vertical performance of a helicopter with the speed and range of a fixed wing aircraft. This combination allows the V-22 to fill an operational niche no other aircraft can approach. The U.S. Marine Corps (USMC) has a current requirement for 360 MV-22s to perform combat assault and assault support missions, while the U.S. Air Force Special Operations Command (AFSOC) will field a fleet of 50 CV-22s configured for terrain-following, low-level, high-speed flight for long range special operations..
Surveillance and Engagement:
737 Airborne Early Warning and Control (AEW&C): A state-of-the-art system providing powerful airborne surveillance, communications and battle management.
Airborne Warning and Control System (AWACS): Represents the world's standard for airborne early warning systems. It provides a highly mobile, survivable surveillance and C2 platform. E-3 fleets are operated by the United States, NATO, the United Kingdom, France and Saudi Arabia. Japan operates a fleet of four E-767 AWACS aircraft.
P-8A Poseidon/P-8I: Military derivative of the Boeing Next-Generation 737-800 designed to replace the U.S. Navy's fleet of P-3s. The P-8A will significantly improve the U.S. Navy's anti-submarine and anti-surface warfare capabilities, as well as armed intelligence, surveillance and reconnaissance.
Missiles and Unmanned Airborne Systems:
Harpoon Block II: The world's premier anti-ship missile system, featuring an autonomous, all-weather, over-the-horizon strike capability. It is ideal for both anti-ship and land-strike missions, even in crowded ports. These versatile weapons can be launched from aircraft, ships, submarines, and even by mobile coastal defense vehicles.
Joint Direct Attack Munition (JDAM): A low-cost guidance kit that converts existing unguided free-fall bombs into near precision-guided "smart" weapons.
Patriot Advanced Capability-3 Missile (PAC-3): Uses hit-to-kill technology to intercept and destroy tactical ballistic missiles, cruise missiles and hostile aircraft. The Boeing-built PAC-3 seeker acts as the missile's "eyes." By providing active guidance data to the missile, PAC-3 can acquire the target and ensure a kill through direct body-to-body impact.
Small Diameter Bomb (SDB): A 250-pound class, near precision-guided weapon launched from a fighter, bomber or unmanned aircraft that can destroy targets from a range of greater than 40 miles and penetrate more than three feet of steel-reinforced concrete with reduced collateral damage.
Standoff Land Attack Missile-Expanded Response (SLAM ER): Combat-proven, all-weather, over-the-horizon, precision strike missile. The ER variant is an affordable upgrade to the baseline SLAM, incorporating planar wings to improve range and aerodynamic performance, and an improved warhead to increase penetration and lethality against hardened targets.
A160T Hummingbird: Long-endurance, runway independent unmanned rotorcraft capable of multiple missions. It is scheduled to deploy to Afghanistan with the U.S. Army in June 2012.
ScanEagle: Low-cost, long-endurance, autonomous unmanned air system, ScanEagle is used by military customers around the world to loiter over trouble spots and provide intelligence, surveillance and reconnaissance (ISR) data or communications relay. It has accumulated 570,000 combat flight hours, providing more than seven years of uninterrupted service to the U.S. Department of Defense.
Integrator: An autonomous unmanned air system offering an industry-leading payload capacity to enable the capture of high-resolution imagery in day and nighttime conditions and/or the rapid integration of a unique customer-required payload package.
Small Tactical Unmanned Aircraft System (STUAS): Provides persistent maritime and land-based tactical Reconnaissance, Surveillance, and Target Acquisition (RSTA) data collection and dissemination capabilities to the war fighter.
Global Services & Support operates in 264 global locations providing a full spectrum of mission ready services and support solutions. Included in its scope is supply and logistics support, aircraft maintenance, training for pilots and maintainers, modification and upgrade support, and a plethora of ancillary services. It is considered one-stop shopping for all sustainment elements in Boeings product inventory. Boeing (2012) explains in more detail:
Integrated Logistics: Comprises a full array of coordinated logistics services that address the life cycle of aircraft and weapon systems. Online, real-time, integrated information systems provide reliability and demand forecasting, total asset visibility, maintenance information and field data to improve aircraft availability and reduce costs. This approach offers a single point of accountability during the service life of a product. As a result, mission effectiveness and readiness are improved while the total cost of ownership is reduced.
Maintenance, Modification and Upgrades: Operates at centers strategically located throughout the United States, providing high-quality, rapid and affordable aircraft services for military customers.
Training Systems and Government Services: Boeing provides a full range of military training capabilities and customer-focused solutions to directly enable mission readiness. Worldwide, the division has more than 2,800 employees dedicated to delivering cutting edge training solutions, custom software development, engineering and technical services. Our years of expertise, global infrastructure, research facilities and customer knowledge help ensure the very highest levels of readiness for our customers.
The Network and Space Systems business encapsulates electronic and mission systems; information solutions; strategic missile & defense systems; satellites and other space and intelligence systems; and space exploration activities. Key programs include:
Electronic & Mission Systems:
Argon ST: A wholly owned subsidiary acquired by Boeing in 2010. Argon specializes in state-of-the-art signals intelligence (SIGINT) sensors; reconnaissance, communication, navigation, geolocation and other systems, system-of-systems and network-of-network solutions; and analysis and information integration services. It is based in Fairfax, Va.
Digital Receiver Technology (DRT): Germantown, Md.-based subsidiary acquired by Boeing in 2008. DRT develops hardware and software products for wireless surveillance and tracking equipment for federal government and law enforcement customers.
Family of Advanced Beyond Line-of-Sight Terminals: Prime contractor for the Family of Advanced Beyond Line-of-Sight Terminals (FAB-T) program.
Intelligence, Surveillance, Reconnaissance and Force Protection (ISR&FP): Focuses on ISR and specialized warfare, including airborne and tactical ISR.
Information Solutions:
Intelligence Systems Group (ISG): Develops and integrates systems that provide advanced capabilities to Intelligence Community customers.
Mission Operations (MO): Integrates, deploys, transitions, operates and sustains satellite ground systems supporting Intelligence Community, U.S. Department of Defense, and civil and commercial customers for mission success.
Secure Infrastructure Group (SIG): Focuses on delivering information/cybersecurity, physical/global security, and information services to U.S. government, commercial and international customers to protect border, diplomatic, energy, maritime, transportation and other critical infrastructure assets.
Advanced Technology Programs (ATP): Delivers innovative, end-to-end mission solutions for the U.S. Intelligence Community. Headquartered in Anaheim, CA, with approximately 500 employees, approximately three-quarters of the work performed by ATP supports classified government programs.
Strategic Missile & Defense Systems:
Arrow: Boeing and Israel Aerospace Industries (IAI) have teamed to co-produce the Arrow Weapon System (AWS), the first operational national missile defense system for the Israel Ministry of Defense (MoD).
Directed Energy Systems (DES): Programs include the High Energy Laser Technology Demonstrator (HEL TD), the Free Electron Laser (FEL) and the Mk 38 Tactical Laser Weapon System.
Ground-based Midcourse Defense (GMD): Prime contractor for GMD, the United States' only operational defense against long-range ballistic missiles.
Standard Missile-3 Block IIB (SM-3 IIB): A key component of the Department of Defense's Phased Adaptive Approach for missile defense in Europe.
Strategic Missile Systems: Key contractor for the Air Force in land-based Intercontinental Ballistic Missile (ICBM) systems for more than 50 years.
Space and Intelligence Systems:
Global Positioning System IIF (GPS): Under contract to build 12 GPS IIF satellites for the U.S. military's satellite-based radio navigation system.
Commercial Satellites: Secretaria de Comunicaciones y Transportes (SCT) de México ordered an end-to-end turnkey satellite communications system that will become Mexico's next-generation telecommunications system.
Tracking and Data Relay Satellites (TDRS): Currently building three satellites in the TDRS series, TDRS K, L, and M. The first will be launched in 2012.
Boeing Commercial Satellite Services: Develops innovative solutions for satellite customers by marketing commercial satellite telecommunications services to the U.S. government and other satellite users.
Wideband Global SATCOM (WGS): Offers greatly increased communications capacity, coverage and operational flexibility for the warfighter.
Space Exploration:
Exploration Launch Systems: Supports NASA on the strategy and policy of Space Exploration programs through the NASA Marshall Space Flight Center (MSFC) in Huntsville, Ala., including development of NASA's Space Launch System (SLS), the nation's new human-rated heavy lift transportation system that will enable the human exploration of destinations beyond Earth orbit, such as the moon, asteroids and Mars.
Launch Products and Services: Responsible for two Boeing subsidiaries: Boeing Commercial Space Company (BCSC) and Boeing Launch Services.
Checkout, Assembly and Payload Processing Services (CAPPS): -- Boeing's Florida Operations at Kennedy Space Center serves as NASA's prime contractor for the Checkout, Assembly and Payload Processing Services (CAPPS) contract
Commercial Crew Development: Boeing has earned two Space Act Agreement awards to support NASA's thrust into commercial crew efforts toward destinations in low Earth orbit. Boeing's Commercial Crew Transportation System (CCTS) will provide safe, affordable access to the International Space Station and other destinations in low Earth orbit, and will enable NASA to focus on deep space exploration missions.
International Space Station (ISS): Prime contractor responsible for the design, development, construction and integration of the ISS and assisting NASA in operating the orbital outpost.
Boeing Phantom Works supports several Defense, Space, and Security programs focusing on capability development. They partner with Research & Technology to integrate innovation solutions, meeting customer needs in a materializing market. Boeing (2012) explains that its mission is to “create and transition high-value opportunities that enhance Boeing Defense, Space & Security's core businesses and extend Boeing's market presence into new frontiers,” and further breaks down Phantom Works into four essential divisions:
Advanced Boeing Military Aircraft: Provides solutions for the transformational defense forces of the future. Programs include the Phantom Ray unmanned technology demonstrator; Phantom Eye, a HALE (High Altitude Long Endurance) unmanned Persistent ISR demonstrator; pursuit of the Next Generation Bomber for the U.S. Air Force, and the Advanced Navy Strike Fighter weapon system and the Unmanned Carrier-Launched Airborne Surveillance and Strike program for the U.S. Navy. Capability areas include Advanced Mobility Systems and Advanced Weapons programs.
Advanced Network & Space Systems: Developing next-generation network capabilities and space systems for defense and civilian applications.
Advanced Services: Responsible for driving the development of new businesses with innovative capabilities and transitioning those businesses to the appropriate business unit.
Strategy Development & Experimentation: Designed to provide the world's premier family-of-systems experimentation capability and perform customer-focused operator-in-the-loop experimentation. Facilities include the Boeing Centers in Anaheim, Calif., Crystal City and the Virtual Warfare Center in St. Louis, The Boeing Systems Analysis Laboratory in Australia, The Portal (jointly with QinetiQ) in the United Kingdom.
Joint Ventures include a number of strategic alliances with corporations, such as Lockheed Martin, which combines Boeing development technology with partner firms to cultivate space launch vehicle programs, payload alternatives, and mission support functions. United Launch Alliance (ULA) serves the Department of Defense, NASA, and the National Reconnaissance Office with program management and mission support facilities in Denver, Colorado, manufacturing plants in Decatur, Alabama and Harlingen, Texas. Operations for launch are at Cape Canaveral, Florida and Vandenberg Air Force Base in California. Their United Space Alliance (USA) branch focuses on space launch and recovery and a plethora of in-flight systems and hardware serving as a prime contractor for NASA’s space shuttle and International Space Station, employing more than 10,000 people in Texas, Florida and Alabama.
Boeing Capital Corporation is a multi-faceted financing entity whose cardinal efforts encompass supporting the other Boeing groups. They work assiduously with the Commercial Airplane and Defense, Space & Security extensions by providing all of the financial support structure necessary to promote the execution of Boeing product sales and delivery. Boeing Capital is global in scope and strength as exhibited by its 2011 $4.3 billion portfolio value. Boeing (2012) offers a more detailed look at its Capital Program:
Organization: Under the leadership of President Mike Cave, Boeing Capital has approximately 160 employees, located primarily at its headquarters in Renton, Wash. An additional U.S. office is located in Los Angeles, California, along with international offices in Hong Kong and Moscow. The business unit is divided into two operating groups: Aircraft Financial Services and Defense, Space & Security Financial Services.
Aircraft Financial Services: Assists commercial aircraft customers by arranging and structuring asset-based financing, managing technical assets, and providing a broad range of efficient financing solutions for Boeing Commercial Airplanes products and services.
Defense, Space & Security Financial Services: Boeing Capital's defense, space & security financial services unit was formed in 2000 to provide additional focus and expertise in arranging and structuring financing solutions for government and commercial customers around the world to help arrange funding for satellites, military transports, tankers and rotorcraft.
Engineering, Operations & Technology Division is a primarily support function of Boeing that pursues excellence across all divisions via top quality research and development, technical services, testing and evaluation, and a diverse arrangement of technical services. They provide oversight on successful implementation of development programs and recruitment of a top-tier work force.
Shared Services Group provides Boeings business units with the infrastructure services that enable each program to focus on its primary mission without the incidental concerns associated with logistics, construction, staffing and other HR services, and a bevy of intrusive ancillaries that support primary functions. It handles large scale acquisition and lease agreements, and coordinates all travel services, while simplifying and expediting basic and formative services for all Boeing units.
Boeing Marketing
Boeings marketing practices are outlined in Boeings PRO-4, a self-imposed set of guiding principles which blueprints how marketing business is to be conducted (S. Hill, 2011). As a matter of policy, practices that could harm Boeing, its employees, or contractual partners will be in violation, as will using any statements designed to deceive, tempting a competitor to violate third party contracts, gaining access to unauthorized information, violating laws, or damaging the company’s reputation.
Boeing can segment its market most easily by geographic regions, considering degree of economic development, anticipated air traffic, domestic needs for single-aisle, and non-stop demands. Perhaps no other airplane manufacturer carries as much brand recognition as Boeing, relying heavily on strength of name, in a limited customer base. With such a large percentage of the market, and a limited customer base, Boeing virtually sells itself. Scott (2012) explains that Boeing combines an interesting blend of content marketing with brand journalism, publishing content that “publishes content that supports business objectives and fosters positive opinions about Boeing,” using the mantra “we are not selling planes, we are selling Boeing.” In the position of not selling to consumers, Boeing must find a fundamental way to reach consumers, who subsequently influence the customer. This is accomplished through numerous media, including a simple blog. Bhargava (2006) accounts for Boeings VP of Marketing, and how he counters Airbus via his blog site, disputing some claims through a seemingly genuine foray.
Perhaps the biggest question we must ask ourselves is, why does Boeing advertise? It is not like you are going to head downtown after the game and buy an airplane. Aside from their advertising in large financial and trade publications, Boeing builds their brand awareness by reaching out to the consumer. A small percentage of the consumer base is investors, and the advertisements run in financial arenas as well. I can tell you from personal experience that many travelers choose their airlines based on the type of plane that carries them. Boeing carries its message via articles, publications, magazine ads, and television commercials, ensuring they reach all corners of the world and remind those who may have forgotten, Boeing is still at the forefront.
History of Boeing
Founded as a result of the joint effort of William Boeing and Naval Officer Conrad Westerveldt, and sharing a passion for aviation, 1917 brought about a 2-seater sea plane that propelled Boeing into the aviation sector. Assuming there would be government interest in their business upon the advent of WW I, Boeing and his partners began training Army Flight Instructors. Post-war, Boeing sold a number of planes to Hubbard Air Transport, widely considered the world’s first airline. That relationship spawned Boeing Air Transport Company which garnered a large contract through the post office for mail delivery (Funding Universe, n.d.). This would propel Boeing deep into the airplane business. Today, Boeing stands alone as the largest manufacturer of commercial and military aircraft combined inventories.
1917: William Boeing establishes Pacific Aero Products Company, making airplanes, training pilots, and delivering air mail.
1918: Company changes name to Boeing Airplane Company.
1925: Maiden voyage of Model 40 mail plane.
1927: Earns air mail contract for Chicago-San Francisco route.
1930: First commercial monoplane makes maiden voyage.
1931: Boeing Air Transport consolidates with 3 others airlines to form United.
1934: Investigation of airmail business results in break-up of United, Boeing refocuses its efforts strictly on manufacturing.
1935: Maiden voyage of B-17 prototype.
1940: Boeing Stratoliner flies South American routes for Pan Am, and NY-LA for TWA.
1941: First B-17 combat missions.
1942: B-29 prototype crashes, killing pilot and two dozen others.
1944: Boeing produces B-17’s for military at a rate of 16 per day.
1945: B-29 drops atomic bombs on Hiroshima and Nagasaki, Japan.
1948: Launches in-flight refueling program.
1950: Develops gas turbine powered truck, launches program to apply to aircraft.
1951: Rollout of B-52.
1954: Maiden voyage of Boeing 707 and B-52A.
1956: William Boeing dies.
1959: Launches program to develop manned orbiting craft.
1960: Boeing acquires military helicopter manufacturer Vertol Aircraft.
1961: Name changed to The Boeing Company. Test launches Minuteman missile.
1964: Introduces 727 passenger plane.
1965: Largest commercial order to date via American Airlines.
1966: Lunar Orbiter launched and photographs the moon.
1967: Maiden voyage of 737 jet.
1968: Apollo 8, propelled by a Boeing staged rocket, launched.
1970: Maiden voyage of 747 jumbo jet. Earns prime contract for AWACS.
1971: In cost-cutting move, lays off 44,000 people to avoid bankruptcy, astronauts use Lunar Roving Vehicle on moon.
1976: B-52 launches cruise missile.
1977: 747 modified for use as Space Shuttle transporter.
1981: Maiden voyage of 767 aircraft.
1982: Maiden voyage of 757 aircraft. Develops solar powered satellite system for powering homes.
1984: Earns contract for Space Shuttle software.
1989: Collaborative B-2 Bomber makes maiden voyage.
1987: Earns contract to develop living and working quarters for International Space Station.
1992: Boeing-Airbus agreement limiting subsidies.
1993: Garners prime contract for International Space Station.
1995: First 777 delivered to United Airlines.
1996: Acquires aerospace and defense divisions of Rockwell International.
1997: Acquires McDonnell Douglas, launching Boeing to top of aerospace market.
1998: Delivers JDAM to the DoD.
1999: Leads the launch of commercial satellite from floating sea platform. Lead systems integrator for the National Missile Defense Program.
2000: Acquires Hughes Space and Communication. Contracted to build 222 Super Hornets for Navy. Forms three new business divisions, to include Boeing Capital.
2002: Two satellites launched. Forms Integrated Defense Systems unit, merging various communication divisions.
2003: Contracted by Navy for 210 F/A-18 Super Hornets.
2004: Boeing files complaint with WTO alleging Airbus subsidy violations.
2005: Sets record with over 1,000 commercial orders.
2006: Garners contract for three satellite systems. Breaks previous year’s sales record.
2007: Third year in a row for establishing new commercial sales record with 1,413 orders.
2008: While executing numerous foreign contracts, satellite orders, and partnership projects with Lockheed Martin, commercial orders drop by more than 50% to 662.
2009: Proposes to NASA an initiative to expedite space transportation for commercial purposes. 787 Dreamliner makes maiden voyage.
2012: WTO finds favor with US side of complaint, but rules violations occur by both parties.
Case Discussion Questions
What are the benefits to Boeing of outsourcing so much work on the 787 to foreign suppliers? What are the potential risks? Do the benefits outweigh the risks?
Boeing outsourcing is nothing new in the American economy. Technology has made this business option more viable with the advent of the internet, shipping and tracking technological advances, and the financial benefit of capitalizing on lower wage scales. It has enabled consumers to purchase products at reduced costs, and made American products in greater demand overseas. It can increase the scale of productivity and reduce labor costs, culminating in substantial savings to the parent firm. Power (n.d.) explains that contracting foreign vendors can also speed up production rates due to third party suppliers focusing on a single production task with workers possessing specific skill sets, noting that it also gives a business the opportunity to flex between vendors with proven track records.
For Boeing, garnering $8 billion in development costs from their foreign partners for a slice of the production pie was a huge financial benefit. As mentioned previously, streamlined production as a result of outsourcing was to reduce development time from six to four years by “tapping into the expertise of the most efficient producers, wherever they were,” thus reducing production costs (C. Hill, 2011). By contracting vendors in foreign markets, Boeing hoped to amass increased sales in those same regions. The risks of this outsourcing were realized on a grand scale. With 770 orders on the books, Boeing saw numerous delays resulting from delayed supplies, partners not meeting delivery schedules, and either poorly assembled or had manufacturing defects. Many of these issues Boeing was unaware of due to poor third party lines of communication. As a result of the significant delays and poor engineering practices, Boeing was faced with millions in late penalty fees and saw an additional $2 billion in development costs (C. Hill, 2011). For Boeing, the benefits did not outweigh the risks in this scenario. They attempted to outsource to large a percentage of the product, losing control of quality standards and production streams. They were not organized to oversee the excessive vendor branches and it ended up costing them time and money, as well as some damage to their reputation. Boeing has admitted that they were overly aggressive in outsourcing, with Commercial Aviation Chief, Jim Albaugh surmising that "We gave work to people that had never really done this kind of technology before, and then we didn't provide the oversight that was necessary" (Hiltzik, 2011).
In 2007 and 2008 Boeing ran into several well-publicized issues with regard to its management of globally dispersed supply chain. What are the causes of these problems? What can a company like Boeing do to make sure such problems do not occur in the future?
The very speculative attempt at excessive outsourcing turned out to be the Achilles heel during the 787 development process. Rather than the typical 50% or less outsourcing per project, Boeing opted for a groundbreaking 70% outsourcing for their latest luxury liner. Subsequently, the number of independent suppliers and the lack of intrusive oversight on Boeing’s behalf were to the detriment of cost efficiency and timelines.
Boeing had prepared for this endeavor by developing a strategy for execution of the order from others and assemble at home plan. This strategy included a synchronized demand/supply, order and inventory system that would ensure all components arrived at their assembly plant at the same time for optimal assembly efficiency. Additionally, they opted for a partner-led manufacturing process where sub-contracted assemblies were engineered by the manufacturing firm. Other preparations included common tooling practices, specialized transport rigs to move the larger sections, and utilizing best in class technology partners globally (e2open, 2007).
Where Boeing failed, was on the execution phase. Foreign suppliers ran into their own set of obstacles, such as Italy’s Alenia, who was charged with building a composite fuselage section, and there lack of factory with which to do so. Numerous delays as they haggled for land and constructed the facility set them back significantly, as did their shipping of incomplete fuselages components of unacceptable quality. Some suppliers were sub-contracting work to other foreign suppliers who produced poor quality components as well, many times with Boeing unaware until it was too late (C. Hill, 2011). Even with the lack of capability to provide sufficient oversight to the numerous suppliers, many of the contracted businesses were not capable of keeping up with quality control or production levels sufficient to meet the development timelines. For other suppliers, their interests did not properly align with Boeing. An example of this is Alcoa’s ability to manufacture needed fasteners, but with tooling time and costs, they wanted to make thousands of each when Boeing only required small handfuls. This led to delays in manufacturing the subsequent rounds of needed fasteners, thus delaying assembly further (Gonzalez, 2009).
To prevent future occurrences, Boeing should have either restricted the number of suppliers, or provided more intrusive management. Design issues were a result of allowing suppliers to design the components themselves vice manufacturing form Boeing prints. Boeing’s lack of intrusive oversight was evident as they sub-contracted work to companies ripe with low-wage workers with no previous aerospace experience, especially to the Vought Aircraft Industries, who did not even have an Engineering Department when it won the contract to make the rear fuselage section (Domke, 2008) and subsequently sub-contracted flooring sections to an Israeli firm who provided inferior components.
Some critics have claimed that by outsourcing so much work, Boeing has been exporting American jobs overseas. Is this criticism fair? How should the company respond to such criticisms?
I believe the criticism was accurate to an extent. Globalization has taken hold of big business, and the outsourcing to foreign suppliers should not come as a shock to anyone. The degree of outsourcing levied by the 787 project most definitely cost thousands of American jobs at all income scales. The opposition to outsourcing can use Boeings success, or failure, with the 787 development as fodder for the argument that Boeing should bring those jobs back to the U.S. Statistics show that U.S. multinational firms accounted for the outsourcing of more than 2.4 million jobs during the first decade of the 21st century alone. While it is difficult to accurately surmise accurate accounts, Outsaurus (2012) claims that number to be as high as 10.5 million jobs, with a projected U.S. unemployment rate of 2.5% if all jobs were brought home. Being victimized by that outsourcing can be exceptionally personal as exampled by Boeing Engineer Stephen Gentry. After being told he was being laid off, his job being outsourced to India, Gentry was further humiliated by having to train his Indian successor for three months, his pension used as blackmail for being a “good soldier” (Fastenberg, 2012). There are many stories similar to Gentry’s as American business searches out cheap labor overseas at the sacrifice of American payroll.
What many fail to account for is the jobs lost to importing as well as outsourcing. Ikenson (2012) explains that while a great deal of jobs are lost due to importing, he surmises that outsourcing is not a product of businesses chasing low wages and weak labor standards overseas, but that concerns cover the unified cost of production from conception to consumption. Companies should not concern themselves with expanding national employment, but minimizing costs to stay competitive and offer a financially friendly product. He further stipulates that most do not account for the fact that more than 5 million Americans are employed by U.S. subsidiaries of foreign corporations, with Boeings largest competitor, Airbus, employing over 1,000 Americans at their Alabama facility. Outsourcing goes both ways, we benefit and we feel the sting. These, among other realities, should be the basis for any Boeing response to outsourcing complaints. In order to garner overseas contracts, Boeing must partner with companies in those particular countries, as well as tapping onto the specific expertise that may be offered abroad that would be inferior and more costly at home. The basic premise for outsourcing, and one that I explain during the course of general conversation is the following example; If a company employs 1,500 people and is danger of going under due to competition and their lower prices, your options are to outsource 500 of those jobs while maintaining 1,000 in order to stay in business, or close your doors and send all 1,500 to the unemployment line, which path will you take?
References
Hill, C. (2011). International business: Competing in the global marketplace. (8th ed.). New
York: Irwin/McGraw-Hill.
by
rcollari (student)
