Outsourcing in Airbus and Boeing: Dilemma of Strategic Destruction

Filed in archive Point of view on February 26, 2007

While Boeing and Airbus are both developing heir new line of airplane, their development efforts are kind of different from before. In the past, they were doing almost all the design and engineering in house. These days, they are increasingly outsourcing not only components but also design and engineering tasks to their international partners.

In order to do so, they are changing the product architecture and try to have the role of system integrators. But how does the picture look like? Boeing has already outsourced more than 90 percent of the parts for its 787 Dreamliner and it's now outsourcing design and engineering as well. This might make sense in short term when financial issues are important but might not be a nice option for the future. A lot of management and engineering techniques originally were developed in aircraft industry and then were used by other industry and these companies were always famous for their technical know-how. The question is how they are going to keep their competencies from now on.

Well, Boeing and Airbus are optimistic about the future but David Pritchard and Alan MacPherson from State University of New York at Buffalo are not. They told Financial Times that this might finally lead to a Strategic Destruction of the American and European commercial aircraft industry.

What do you think?