As aerospace and government officials converge on London for the Farnborough Air Show (July 9 -13), one of the major themes at the center of this bi-annual exposition will be the continuing globalization of aerospace and defense.
Countries (and regions) around the world seeking to develop or rapidly expand their own indigenous industries—complete with the best enabling technologies they can get their hands on—will be beckoning contractors of all sizes to locate or expand operations within their borders. China, India, Brazil, Eastern Europe, and Southeast Asia are all vying for big pieces of the action. Even Mexico is in on the competition to attract suppliers. Consider the prize Mobile, Ala., just landed with a commitment from Airbus to build an A320 assembly plant in Mobile.
But there are limits to what market access and more affordable labor rates can get you—as there is to the concept of the global supply chain. The strategy gave Boeing pause as a result of problems it encountered sourcing major subsystems and intellectual capital worldwide for the 787. From that experience came important lessons that Boeing has started implementing, Boeing Chairman and CEO Jim McNerney said in a recent chat.
The company still believes in “globalization” as a way to be close to customers, engage in technical cooperation and procure component, he said. But McNerney conceded the airframe manufacturer also learned valuable lessons in efficiency, on-time delivery and quality. Boeing outsourced too much of the engineering work on 787, and the company won’t repeat that mistake—it is pulling much of it back in-house.
My prediction: watch more tier one and tier two contractors do the same thing in order to better control progress on vital programs. In fact, pay particular attention to the lead news-analysis article in the July 9 edition of Aviation Week & Space Technology. You will find the exclusive information on this topic most interesting.