Destroyer or creator, victim or villain? How outsourcing and the outsourced worker are viewed depends on which side of the issue - and the world - you stand.

Is the relocation of work destroying the aerospace industry or creating a global industrial base that is essential to its health? Is a job moved offshore a loss or a gain for the industry? These questions came to a head in 2008 as outsourcing played a role in the collapse of the U.S. Air Force KC-X tanker competition, the unraveling of Boeing's 787 program and ultimately the strike that idled the U.S. giant's commercial aircraft production for eight weeks.

In different ways, these events focused attention on the aerospace industry's practice of placing work around the world to win competitions, service customers and cut costs. In the wake of Boeing's difficulties starting up the global supply chain for the 787, for example, its striking workers won a greater say in outsourcing.

The tanker contest, meanwhile, confirmed even the closely protected U.S. defense sector is not immune. EADS's promise to bring jobs to America - insourcing - did not dampen the political furor over selection of a European platform for a major U.S. military program. And the promise of jobs in the U.S. caused problems for EADS back home in Europe, where an increasing share of work is being moved to lower-cost regions.

Aerospace leaders may prefer the term offshoring, but they staunchly defend the need for outsourcing. "The commercial industry operates in a global economy and must go where it can find the best of breed," says Clay Jones, Rockwell Collins CEO and chairman of the U.S Aerospace Industries Assn. for 2008. Jones cites India, which graduates 8-10 times as many engineers as the U.S. "India has a tremendous workforce. If we could not have access to it, we would hamstring the industry," he says.

India, China, Mexico and Eastern Europe have been major beneficiaries of outsourcing by aerospace companies as they have grown over the past four years. In these countries the practice is viewed differently, as a source not just of skilled and well-paid jobs but also national pride. Japan and Singapore, powerful economies in their own right, see a strong aerospace industry as an asset and are prepared to invest to bring in work from the U.S. and Europe.

Aerospace is not alone in outsourcing, but the issue is far more complex for this industry than for any other. Manufacturers move work to other countries not just to reduce their costs, but to enter markets, spread risk, access funding and fulfill offset obligations. And there are other, deeper factors driving offshoring in the aerospace industry, among them the declining supply of new engineers in the U.S. and Western Europe.

Outsourcing may be nothing new for aerospace, but it is an accelerating trend as pressure on prices drives lower-value work like wiring-harness production, sheet-metal fabrication and software coding to lower-cost countries. While high-level design and integration skills remain closely held by the original equipment manufacturers, the need to spread development costs and risks is pushing them to outsource higher-value subassembly and subsystem work and bring suppliers into their factories.

Even as more work has moved offshore, employment in the established aerospace industries of North America and Europe has grown steadily since the post-9/11 recovery. But as the global economic recession tightens its grip and the growth curve turns downward, outsourcing will come under ever greater and more critical scrutiny. And those fledgling industries boosted by offshoring could receive their first real lesson in the cyclicality of aerospace.