Boeing, going, gone: America’s Dreamliner a nightmare
By Ken Hess
The Boeing 787 Dreamliner is the latest casualty of the global outsourcing trend that has left the project in a lurch.
The Wall Street Journal article describes the dilemma that is plaguing the Dreamliner aircraft. And now Boeing is spending billions of dollars to remedy the snafus in foreign countries–money that could be spent in the U.S., the home of the corporate headquarters of the airline.
This story, on the heels of multiple reports of lead in toy paint, anti-freeze in toothpaste, tainted pet food, and so on from China, is just another example of why global outsourcing doesn’t work. I don’t care who I offend with that statement. I know it is a global audience out there but you must also realize that most of the world’s innovation since the mid-1800s has come from America. Product quality and innovation has always been one our strong suits in the global marketplace.
Siphoning off our jobs to have cheap labor and falsely boost stock prices has backfired and I am glad. I scoff in the face of those who outsource to foreign countries to exploit the cheap labor market.
Don’t get me wrong; I am not an isolationist but the global marketplace has been totally unfair to those of us in the U.S. We lose jobs to countries with lower labor costs which is a drain on our economy. Those foreign workers don’t pay U.S. taxes and they don’t buy American products. Basically we are draining the pockets of the many to stuff the pockets of a few. My votes and my money won’t go to firms that outsource to foreign countries and I try not to buy foreign products. It is very difficult because everything we have, including the clothes we wear, are made somewhere else.
I hope the bigwigs at Boeing are happy with their stupid decision to globally outsource and I hope it costs you your jobs. You could have invested that money in U.S. manufacturing companies and saved yourselves a lot of headaches.
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December 9th, 2007
Hello Ken,
You are spreading a little misinformation.
1. The labor costs in Italy, Japan and Korea are not any cheaper than in the US. Boeing sends work overseas to sell airplanes overseas.
2. The biggest problem Boeing is having with its suppliers is in the US – Vought and a Texas subcontractor of Vought.
3. It’s a bit premature to doom a program that has sold more units than any other new aircraft ever developed.
4. Most of the problems encountered are because of the new technologies of advanced composite fabrication and assembly, not the particular location of where the part are made.
5. Your additional rants on the evils of global outsourcing are borderline idiotic.
December 9th, 2007
I guess we just have a different of opinion.
December 9th, 2007
I could not read the WSJ article because I refuse to sign up, even for their trial two week period, but I believe you are correct with your conclusions.
The main reason Airbus has gone from zero to number one in a few short decades is the fact the EU understands they need to keep the technology and labor at home. Not outsource it for a quick quarterly profit to help the cancer called Wall Street happy. We have weak management with no personal long term interests in our own country. It’s very sad.
On a similar note did you listen to the NPR’s Science Friday on 12/07? An automotive representative was asked why the American companies have to be brought kicking and screaming to the table. Since the 70s the writing has been on the wall fuel efficient vehicles are the future, as can be seen with the Prius being the 4th most bought car this year, yet the American Auto Industry is floundering with their heavy pickups and SUVs. The spokesman had the nerve to answer by saying it takes three thousand more dollars to build a similar auto because our industry must pay “legacy” employees a living wage. How that has prevented the managers from concentrating on fuel efficient high quality autos is anybodies guess.
This mentality of paying less for workers and cannibalizing infrastructure rather than management planing for the future will come back to haunt not just the auto and airline industry but all of us.
December 9th, 2007
America is the Titanic and Free Trade is the iceberg.
They will regret this in the future when they have eliminated the middle class and there is no one left to buy their products.
Great post, I hope you don’t mind my linking it?
The Offended Blogger
December 9th, 2007
“Free trade is good, being patriotic about keeping all the money in USA will do nothing but prevent western countries will prevent china and india from developing, even the poorest and jobless people in usa, are still richer than their third world counterparts my friend, China’s problems as described above are teething problems of free trade, you dont see the bigger picture do you ?
Yes companies are outsourcing to be cheap, but if it will give someone a job, that wouldnt otherwise have one and develop a nation, i will gladly talk to a Indian in a call centre.. Please educate yourself on free trade, it is actually very interesting, and you will learn alot about how an economy works and gets influenced.
Australia”
This is wrong on so many levels. I’ll try to address just a few:
1) Europe, China, India, are all for free trade as long as it results in business coming to them. However try to put in companies to sell to them and all of a sudden you find the government does not allow for it. Take India for example. They do not allow foreign ownership of small companies. (Yes, I know they have legislation in place now which may get passed so it’s not so obvious they don’t allow it.) China is the same way too. Europe, well, just look at AirBus if you want to see how things are done.
2) We don’t and should not care about third world countries. We should care about a decent living wage in our own country.
3) Indian call centres? They are cheap. However they destroy a companies profits after 5 to 10 years. Need examples, check out DELL and HP. Their support was so bad word of mouth spread about wait times taking days.
In the end you have got to take care of your own community. Your own family. And your own friends. If we all did that rather than stupidly letting things get out of hand so our CEOs can make 400x more than the average employee the world would be a much better place.
December 9th, 2007
Let the other industrialized nations help countries if they choose. We Americans have too many problems in our own country that need solutions. We were the only country left standing after WWII but we squandered our wealth and are merely a service economy now. The average walmart shopper has a net worth of -$18 to their name. Our health care system is the worst in most metrics compared to the rest of the industrialized world. We’ve become a nation of morons clutching at sky-fairies for solutions rather than fixing things ourselves. In fact we are the only industrialized nation which is becoming religious every single year decade after decade. We have presidential candidates that say they don’t believe in evolution even! The housing market has taken a steep dive and people are defaulting causing a domino effect of defaults that our government said will last 18 months before reaching the bottom. We have loan sharks offering cash for the equity in your car just like they used to do for equity in your house. All we have is a huge economy that is being drained by war time profiteers that control our politicians via their lobbyists.
However I digress. Lets assume America was in a position to help. What’s the best way to do this? It’s not by giving money that will be administered by the red cross and such. The ships of food often times don’t make it there. Instead the politicians with the help of these organizations convert it to cash and the citizens see little of the benefit.
If you want to help you have to apply it to those who are willing to help themselves and the people around them. Here is an article on how it is done:
http://news.nationalgeographic.com/news/2006/10/061013-nobel-peace.html
You’ll notice this idea really works. It has been working so well it’s now considered the best way to apply aid. However you can call them horrible people too…
December 9th, 2007
Personally, I don’t care whether or not developing countries ever develop or not. It isn’t my concern. My concern is me, my family, and my country. And yes, the “rich” countries do have more and that’s just the way it is. I don’t owe them or you anything. They may not have much food, or things, or money but they all got a lotta kids now don’t they? They aren’t weak enough not to breed nor are they smart enough not to bring more people in to their poverty-stricken existence. They sit down and wait for the CARE packages and the Angelina Jolies to bring them food and clothes.
And finally, I don’t want to help develop third world countries by sacrificing my family’s future. Ask yourself this question:
When the people of the third world are running things, will they take care of you? They can’t take care of themselves. Darwinian theory would cull them out. It is sad but true and just a fact of nature.
Further, if an American country wants to do business in any foreign country; they can hire the people of that country but if they are hiring those people to serve customers in this country…no thank you. We should take away their tax breaks and let them setup shop in those places. I doubt they would do it.
Everyone wants something cheap but at what real price? India is almost 50% Communist and China is Communist and they have a lot of human rights issues…what do you think about that?
I could, and may, write a whole book on this topic…we Americans, and others, are shooting ourselves in the foot with offshoring and it will soon tumble the entire world’s economy. This is just the tip of the iceberg.
December 9th, 2007
Ken, you mentioned in your original article that you were not concerned if your comments offended and clearly this is the case. As someone who has chosen to publicly express their opinion on an issue as complex as globalisation and poverty I would expect a certain level of demonstratable knowledge in the area. Instead you have shown small mindedness to a degree which borders on ignorance. Perhaps a less introverted examination of the issue would be more useful?
December 10th, 2007
Not small-mindedness–just a reality check. I have seen hundreds of my coworkers walked-out during layoffs only to be replaced with offshore hires–that is not small mindedness. I have seen tech workers wanting to unite to form a union because of this dire situation (www.techsunite.org)–this is not small-mindedness. I have seen reports of lead in toys, anti-freeze in toothpaste, tainted pet food, and so on–this again is not small-mindedness. It is a pessimistic view of the world in which I live.
Why should we send jobs to countries with corrupt governments, poor-if any-quality control, and no human rights concerns?
I am not just sitting here conjecturing…this is a real situation and it is time to stop it. Who pays for the mistakes of companies like Boeing who so blatantly screw up? You. Me. Darian. Everyone. Not Boeing. The execs will layoff workers, enjoy their catered lunches and big bonuses and you and I will enjoy higher prices to offset their losses. You watch over the next couple of years…this topic will change the face of our world in elections and campaigning. Offshoring is a bad thing. You may be a fan now but you will be fanning the flames of anti-offshoring when you lose your job to it.
December 10th, 2007
“They may not have much food, or things, or money but they all got a lotta kids now don’t they? They aren’t weak enough not to breed nor are they smart enough not to bring more people in to their poverty-stricken existence.” – Ken Hess. It was this comment which strikes at the heart of your lack of understanding of the issues involved. Don’t for one second think that the situation arose without the aid of the “civilised west” and their interference and pilfering. You may take no responsibility however our countries have unquestionably had a hand. And that is the inconvenient truth. I truly believe that there will be no stopping globalisation. It is a phenomenon which will occur with or without your permision it is the way that we deal with it that matters. I agree with you that there are problems (anti-freeze in toothpaste) granted quality control is not ideal however you are having a laugh if you think that these problems are confined to outsourced goods. I understand what you are saying and I too have a family whom I put first but eventually we will experience true globalisation and holding onto intollerance is going to be counter productive. We need to work together to put the checks and balances in place now. That is where our energy should be focused not on a pessemistic view point which serves no purpose other than to stop progress.
December 10th, 2007
So Ken, where do you think all the money came from to finance R&D for new airplanes? Do you think it’s all American money? The big institutional investors are not all Americans I would think. There are no emotions when business people decide where they want to spend the money, it’s always the perspective of the “biggest bang for the buck”. Off-shoring is an old strategy for businesses, it’s not what they do, but how they do it. Of course, you would not want to put your investment in a place currently torn by civil war. Please look at both sides of the equation too, Americans invite themselves in to countries in search of investment opportunities in mining, oil exploration and service oriented businesses.
December 10th, 2007
So Ken, where do you think all the money came from to finance R&D for new airplanes? Do you think it’s all American money? The big institutional investors are not all Americans I would think. There are no emotions when business people decide where they want to spend the money, it’s always the perspective of the “biggest bang for the buck”. Off-shoring is an old strategy for businesses, it’s not what they do, but how they do it. Of course, you would not want to put your investment in a place currently torn by civil war. Please look at both sides of the equation too, Americans invite themselves in to countries in search of investment opportunities in mining, oil exploration and service oriented businesses.
March 20th, 2008
“realize that most of the world’s innovation since the mid-1800s has come from America. ”
Like Jet engines, radar, penicillin, carbon fibre ?