AirStare From United States of America, joined Dec 2005, 22 posts, RR: 4 Posted (6 years 5 months 1 week 3 days 15 hours ago) and read 1623 times:
I noticed an interesting post yesterday on another discussion thread (I forget which) in which the writer basically lamented the fact that Airbus and Boeing now effectively are a duopoly - at least, for aircraft bigger than about 150 seats.
But given 1) that Boeing itself is actually only producing a minute part of the 787 (the vertical stabilizer, as I recall, and maybe one or two other bits) and has given Japan the entire wing to do; 2) even if Boeing kept the intimate details of the actual wing design to itself, that corporate Japan has a fabled ability for reverse-engineering; and 3) that Japan has already indicated it expects to be a major player in large commercial aircraft production within the next 25 years, was Boeing's decision short-sighted? Look at the auto and the electronics industries in the USA and see which are the healthiest suppliers. Also don't forget that Boeing Wichita was sold, to the Canadian investor Onex Capital if I remember rightly, so that facility's manufacturing work on the 787 is not Boeing OEM work any more.
I have absolutely no axe to grind on this. I'd be very interested in hearing people's opinions as to whether Boeing's decision with the 787 to become almost completely a systems integrator rather than an OEM will have a major impact on its future as a producer of commercial aircraft.
ClassicLover From Ireland, joined Mar 2004, 4261 posts, RR: 28 Reply 2, posted (6 years 5 months 1 week 3 days 15 hours ago) and read 1600 times:
Quoting AirStare (Thread starter): 2) even if Boeing kept the intimate details of the actual wing design to itself, that corporate Japan has a fabled ability for reverse-engineering
You shoot yourself down there. If they can do that, then why haven't they done it with any of the present wing technology out there?
Trent.
I choose to fly oneworld, as a member of Qantas Frequent Flyer.
AirStare From United States of America, joined Dec 2005, 22 posts, RR: 4 Reply 3, posted (6 years 5 months 1 week 3 days 14 hours ago) and read 1564 times:
Quoting ClassicLover (Reply 2): You shoot yourself down there. If they can do that, then why haven't they done it with any of the present wing technology out there?
The truth is, I suspect Boeing has had to give its wing design capabilities to Japan. Japan hasn't been given that kind of wing design capability before. But even if Boeing didn't let Japan design the wing - which I think most people would say is the critical technology on any airframe (viz. BAE Systems jealously keeping all Airbus wing design to itself) - having the entire wing production programme for what is expected to be the most successful widebody aircraft of the next two or three decades is an extremely strong platform from which to launch your own national commercial aircraft manufacturing industry. I suspect that reverse-engineering from an ab initio position as THE major OEM in the programme is quite a different prospect than from buying an example of somebody else's aircraft and trying to build it from scratch.
One of the points I didn't explicity make in my original posting was that I don't think Boeing and Airbus will be a duopoly for more than about two decades.
USAF336TFS From United States of America, joined Apr 2005, 1365 posts, RR: 54 Reply 4, posted (6 years 5 months 1 week 3 days 14 hours ago) and read 1514 times:
The way the orders are panning out, it's quite possible that the Japanese companies involved might have to open up manufacturing plants, in, dare I say it, the United States! Just an opinion, before I get beat up with factoids!
I disagree with the assertion that Boeing is reduced to just a systems intergrator, as they are still responsible for the direct construction of at least 35% of this aircraft. And, as was correctly pointed out, the ENTIRE design is still Boeing's. It's the world we live in, whether we like it or not. Airbus has publicly stated that they will outsourcing major components of the A350 as well and the A380 has 40% U.S.-made content. 75% of the 787 will be made in the United States according to Boeing's website.
Personally, I think it's healthy for all the economies involved. It's a fact of life for both Airbus and Boeing in the 21st Century.
336th Tactical Fighter Squadron, 4th Fighter Wing, Seymour Johnson AFB
AirStare From United States of America, joined Dec 2005, 22 posts, RR: 4 Reply 5, posted (6 years 5 months 1 week 3 days 14 hours ago) and read 1487 times:
Quoting USAF336TFS (Reply 4): I disagree with the assertion that Boeing is reduced to just a systems intergrator, as they are still responsible for the direct construction of at least 35% of this aircraft. And, as was correctly pointed out, the ENTIRE design is still Boeing's. It's the world we live in, whether we like it or not. Airbus has publicly stated that they will outsourcing major components of the A350 as well and the A380 has 40% U.S.-made content. 75% of the 787 will be made in the United States according to Boeing's website.
Personally, I think it's healthy for all the economies involved. It's a fact of life for both Airbus and Boeing in the 21st Century.
Thanks for that thoughtful and well-argued posting.
For anyone interested in the subject, I'd refer you to a very interesting and apparently well-researched March 2005 paper by David Pritchard and Alan MacPherson from the Canada-United States Trade Center at SUNY Buffalo's Dept of Geography, entitled "Boeing's Diffusion of Commercial Aircraft Design and Manufacturing Technology to Japan: Surrendering the US Aircraft Industry for Foreign Financial Support". It's available on the web as a PDF file.
Among other things, it tables Boeing's airframe outsourcing trends from the 727 to the 787; details the exact work that Japan has on the 787 (35% of all the airframe work, because of its leadership in composites technology); discusses Japan's strategy for 787 production; looks at the thorny issue (not yet raised by Airbus with the WTO but sure to be at some point, given Boeing's WTO actions over the A350) of the Japanese government's direct subsidy of its 787 program manufacturers, which in total are investing $3 billion into the program; and concludes, among many other points, that, "Based on Boeing's 'system integration' model one could envision within 10 years that all of Boeing's commercial aircraft could be downsized to a single site at Everett."
The paper goes on to state: "For the first time in commercial aviation history, a new aircraft launch has been structured in a fashion that gives foreign partners the control over design, manufacturing, sub tier supply selection and, ultimately, the financial muscle to destroy what little remains of the US commercial aircraft industry."
Interesting reading indeed. Reaidng it was the primary reason that I started this thread.
NorCal From United States of America, joined Mar 2005, 2307 posts, RR: 4 Reply 6, posted (6 years 5 months 1 week 3 days 14 hours ago) and read 1473 times:
USAF336TFS From United States of America, joined Apr 2005, 1365 posts, RR: 54 Reply 7, posted (6 years 5 months 1 week 3 days 13 hours ago) and read 1430 times:
AirStare, you've made some excellent points as well, and I have read that report. Please don't misunderstand me. I would have preferred that 90% of the 787 was MANUFACTURED by Boeing. I'm quite certain that a close read of the internal documents between Boeing and it's Japanese partners protects Boeing intellectual property and does give Boeing the right to "take back" or even re-source the wings if circumstances warrant.
It has become clear that the relationship U.S. and Japan, their respective economies, businesses and even their militaries, have is among the strongest in the world and are becoming more and more dependent on one another.
There is still a feeling at Boeing that they will always be an OEM. I can only hope they're right. I'm not thrilled with the high content of off-shore components for 787. But if it helps Boeing build a better plane, so be it.
336th Tactical Fighter Squadron, 4th Fighter Wing, Seymour Johnson AFB
RIX From United States of America, joined Aug 2000, 1779 posts, RR: 1 Reply 8, posted (6 years 5 months 1 week 3 days 6 hours ago) and read 1268 times:
Quoting AirStare (Reply 3): ...to launch your own national commercial aircraft manufacturing industry.
- or to "Airbus-ize" it? Meaning, Airbus is owned by EADS and BAE systems, of which EADS is owned by 3 countries... Why not for US (Boeing) and Japan (...) to do the same? I think, for Japan this would be much stronger point than to start its own industry. None of European countries could survive alone in early 70's anymore, even Britain which had so many different designs in 40's-60's; would be even more difficult for Japan today. At least, if we talk about something bigger than RJ.
Trvlr From United States of America, joined Feb 2000, 4430 posts, RR: 28 Reply 9, posted (6 years 5 months 1 week 3 days 5 hours ago) and read 1234 times:
The Japanese economy, while still highly organized and closely related to the state, is far more evolved now than during the era which spawned such literary masterpieces as Tom Clancy's "Debt of Honor".
I don't want to be too polemic here, but truth be told, nowadays I'd be more worried about this kind of stuff happening in China than Japan.
Lumberton From United States of America, joined Jul 2005, 4708 posts, RR: 23 Reply 10, posted (6 years 5 months 1 week 3 days 5 hours ago) and read 1215 times:
Quoting USAF336TFS (Reply 4): The way the orders are panning out, it's quite possible that the Japanese companies involved might have to open up manufacturing plants, in, dare I say it, the United States! Just an opinion, before I get beat up with factoids! Wow!
Actually, the way the 787 is selling, Boeing may have no choice but to set up a second assembly line. Japan could be a candidate IMO. The IAM will scream bloody murder, but it could happen.
Quoting RIX (Reply 8): I think, for Japan this would be much stronger point than to start its own industry.
Exactly. The "evil" Japan Inc., of the '80's and early '90's never materialized. (Some would argue that it wasn't for a lack of trying!) As far as commercial aviation is concerned, no single country will be able to dominate in the future. A strategic alliance with Japan, bringing in other allies, would seem to make political and business sense for the U.S. and Boeing alike.
"When all is said and done, more will be said than done".
AirStare From United States of America, joined Dec 2005, 22 posts, RR: 4 Reply 11, posted (6 years 5 months 1 week 3 days 5 hours ago) and read 1197 times:
Quoting RIX (Reply 8): - or to "Airbus-ize" it? Meaning, Airbus is owned by EADS and BAE systems, of which EADS is owned by 3 countries... Why not for US (Boeing) and Japan (...) to do the same?
That's a very interesting thought that I hadn't thought of. I wouldn't be at all surprised if that's the way it pans out. But, to quote USAF336TFS:
Quoting USAF336TFS (Reply 7): There is still a feeling at Boeing that they will always be an OEM. I can only hope they're right. I'm not thrilled with the high content of off-shore components for 787. But if it helps Boeing build a better plane, so be it.
I think that for a multi-national Boeing to emerge, traditional Boeing might have to change that outlook and perhaps view itself more as a global brand manager, like Coke, Anheuser-Busch (Budweiser) and a few others of the big mega-brands. After all, Boeing made the big decision to move its headquarters away from its roots on Puget Sound - why not just as happily move its production away from the USA and not be an OEM, but more of a "virtual manaufacturer" that's in effect just a designer and marketer?
If American Express, Wal-Mart and so many others outsource all their customer service or supply work outside the USA (and particularly to Asia), why shouldn't Boeing? It'd still be seen as a US corporation and bring (some of) its profits into the US. I know it wouldn't be very good news for all the skilled aerospace tradespeople in Washington State, but Boeing's already started shedding production assets (which include its people) with the sale of Boeing Wichita. I think the Boeing workers (for whom I have the greatest respect) have seen the way the wind may be blowing, even if some of them weren't alive at the time of "Will the last person out of the Boeing plant please turn the lights out?"
Thanks for the excellent replies to my initial question. I do appreciate the viewpoints.
AirStare From United States of America, joined Dec 2005, 22 posts, RR: 4 Reply 12, posted (6 years 5 months 1 week 3 days 5 hours ago) and read 1186 times:
Quoting Trvlr (Reply 9): I don't want to be too polemic here, but truth be told, nowadays I'd be more worried about this kind of stuff happening in China than Japan.
And of course that could well happen, both for Airbus and Boeing. From my initial reading, it seems there's quite a high chance that China will be allowed to set up an Airbus assembly line for many of the 150 A320s it has ordered, and as it has done already for the ERJ-145 and of course for the MD-80 and MD-80 in the past. I wouldn't be at all surprised if eventually it happens in Russia too. But I don't think it will happen in the conceivable future without Airbus' and/or Boeing's express approval and a strong degree of control/cooperation, because you can't just copy a 787 or an A380 like you can a TV set or even a computer.
As a way-out thought, I wonder if the situation will polarise so that Japan becomes the official Boeing partner and China the Airbus one. (I know China orders huge bunches of Boeings too, but given Japan's long-held national policy - I can only call it that, because I've been told by friends in ANA that the government gets involved in the big orders - of ordering very few Airbus aircraft, I think Airbus might try a whole lot harder to please China, a much bigger overall market, than Japan.)
Lumberton From United States of America, joined Jul 2005, 4708 posts, RR: 23 Reply 13, posted (6 years 5 months 1 week 3 days 5 hours ago) and read 1164 times:
Quoting AirStare (Reply 12): I think Airbus might try a whole lot harder to please China, a much bigger overall market, than Japan.)
They may try harder, but until the day when Europe consumes more Chinese manufactured goods by a significant margin as opposed to the United States then Boeing will always have a market for their aircraft. There is more to this equation with respect to China than just offsets and setting up a production line; politics will determine (1) what they buy; (2) and from whom, for the foreseeable future.
"When all is said and done, more will be said than done".
N328KF From United States of America, joined May 2004, 6203 posts, RR: 4 Reply 14, posted (6 years 5 months 1 week 3 days 5 hours ago) and read 1130 times:
The only thing is, MHI (who is part of the 787 wing consortium) has composite wing experience from the F-2.
When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' T.Roosevelt
AirStare From United States of America, joined Dec 2005, 22 posts, RR: 4 Reply 15, posted (6 years 5 months 1 week 3 days 4 hours ago) and read 1126 times:
Quoting Lumberton (Reply 13): There is more to this equation with respect to China than just offsets and setting up a production line; politics will determine (1) what they buy; (2) and from whom, for the foreseeable future.
You're right - that's why China changed its order to 70 737NGs last month at the last second when Boeing was expecting 140-150. The Chinese premier didn't like the way GWB brought up human rights again, I read. I think that may also partly be why Airbus got a commitment for 150 A320s rather than a smaller number.
By the way, since Europe has a much larger population than the USA and many of its economies (particularly the developing ones in eastern Europe) are growing quickly as members of the EU, I think the day when Europe consumes more Chinese goods than the USA might eventually arrive. But I do see Boeing continuing to sell scads of aircraft into China.
Stitch From United States of America, joined Jul 2005, 23610 posts, RR: 79 Reply 16, posted (6 years 5 months 1 week 3 days 4 hours ago) and read 1088 times:
Airbus does not necessarily have to outsource to China, though doing so has advantages. Eastern Europe has some technical expertise from supporting Soviet military programs and their industrial base. Airbus could move plants from "high-wage" England, France, and Germany to "low-wage" Poland and other countries, keeping things "in the EU family", so to speak, while becomming more competitive on the world market through lower labor and construction costs.
Trex8 From United States of America, joined Nov 2002, 3721 posts, RR: 15 Reply 17, posted (6 years 5 months 1 week 3 days 4 hours ago) and read 1028 times:
Quoting N328KF (Reply 14): The only thing is, MHI (who is part of the 787 wing consortium) has composite wing experience from the F-2.
yeah and the F2 wing has had major problems and the JASDF have had to limit flight operations.
so what if Japan gets the wing tech, the cost of aircraft manufacturing is so high that even if Tokyo wanted to start an indigenous industry, it would make more sense to be partners with B or A than compete directly. there is not going to be a Toyota etc, competing with A and B etc
people here worry about Japan getting only part of the critical tech for a commercial plane? this is OT as this is an airliner forum but you should worry more about the 85% of the Patriot missile design we sold to Taiwan or the entire active radar seeker system from raytheons amraam design (the original raytheon submission, , not the Hughes design they inherited of the production amraam) or the small jet turbine tech (read cruise missile powerplant) MDC gave them as part of their harpoon missile sale industrial offsets.
now there you get real high tech of a very sensitive nature, to a country still not known for being the best intellectual property rights protectors around and a "nation" where they may one day be part of the US' main strategic adversary after the Chinese communists reunite them!
USAF336TFS From United States of America, joined Apr 2005, 1365 posts, RR: 54 Reply 18, posted (6 years 5 months 1 week 3 days 3 hours ago) and read 981 times:
Quoting AirStare (Reply 11): After all, Boeing made the big decision to move its headquarters away from its roots on Peugeot Sound - why not just as happily move its production away from the USA and not be an OEM, but more of a "virtual manufacturer" that's in effect just a designer and marketer?
While I can see you point, I just don't see that happening. Let's remember one very important point... Who is Boeing's largest single customer? The United States government. Congress would NEVER allow the only Commerical Aircraft Manufacturer (ie, Manufacturing, High Technology, Military Contracts, National Pride, and all the other spin offs of this industry) to move their manufacturing operations off shore. It would be political suicide for what ever party was in the White House and/or Congress, regardless if it was done with or without it's blessings. It would be a disaster for the U.S. economy. Boeing is the largest single exporter in the U.S. and takes great pride in that, rightly so.
As a stockholder, while I love the 787 program, the idea that so much of the aircraft will be built by the partners, both American and foreign, makes me a bit nervous. I don't completely feel comfortable relying so much on "outside" entities.
I do agree that the '80s and '90s proved the Japan Inc. was not the technological giant many of us feared it was going to be. The Japanese realized that America itself wasn't a Paper Tiger either and couldn't "copy/make better" every idea/product the market wanted. The Japanese found out the hard way that they relied on the U.S. and perhaps were being viewed as arrogant, to some. The money they lost in U.S. real estate alone provided something for them to reflect on...
The way the 787 alone is selling, I'm convinced that Boeing will have to fire up additional assembly lines, including both the Peugeot Sound and Everette factories. I don't know this as a fact, but I just don't see how else they can supply the demand. They have been hiring back many who were layed off and there is strong demand for new workers as well. I would not be surprised to see Boeing turn to a U.S. firm as a second source for wing assemblies.
Turth be told, Boeing will remain an OEM with deep roots in the U.S. It's in the stockholders interests to do so. The day they get out of manufacturing, R&D and producing great airplanes is the day I'll sell all my stock!
336th Tactical Fighter Squadron, 4th Fighter Wing, Seymour Johnson AFB
RIX From United States of America, joined Aug 2000, 1779 posts, RR: 1 Reply 19, posted (6 years 5 months 1 week 2 days 23 hours ago) and read 889 times:
Well, my idea was about Boeing and the Japanese partners to form something like what Airbus was for the four European countries - not for Boeing to outsource the production (or, as another post says, Airbus to outsource to Eastern Europe)! Combined industry power, shared risk, shared but increased profit - this is what Airbus was for BAC, Aerospatiale, ..., ..., same I would expect in case of US/Japan. As for outsourcing - sooner or later, by this you have your production cheaper, but, eventually, who will buy it? You take jobs away from your fellow citizens, hence erode middle class, and eventually undermine your country economy. You are simply not an industrial power (let alone "superpower") any more (be it US, Japan or Europe)! But this is a totally different issue.
Centrair From Japan, joined Jan 2005, 3589 posts, RR: 23 Reply 20, posted (6 years 5 months 1 week 2 days 22 hours ago) and read 870 times:
I think Japan is a nice place. The people are so kind. They are always bowing, saying please and thank you. If they don't like something they say it politely and then try anyway or say nothing and just grin and bear it for creating a good relationship or situation. It really is extremely evil.
Though Japan has stated it is interested in creating its own aerospace industry, it is not on the lines of building commercial jets. Reason? lack of natural resources and land. Heck we have to build our airports on man-made islands. We don't have places to build huge factories and test runways. They have worked on Scramjet and Hypersonic technologies but still lack the infrastructure to do it.
One other big advantage to using Japanese suppliers is that the Japanese government gives tax breaks to companies that research, develope and promote of more eco-friendly products (as part of the Kyoto Protocol). This saves money on which leaves to savings for the consumer. It also allows for lucrative spin-off techonologies that can be used in other areas such as rail (New shinkansen made using composites, cars, and ships).
(Note: Japan is one of the U.S.'s largest trade partners. The U.S. is Japan's strategic partner and security as Japan does not have a standing military...only a self defense force. Some of these agreements are approved by the U.S. government so the U.S. military can get things like base relocation in Okinawa.)
Yes...I am not a KIX fan. Let's Japanese Aviation!
N328KF From United States of America, joined May 2004, 6203 posts, RR: 4 Reply 21, posted (6 years 5 months 1 week 2 days 14 hours ago) and read 776 times:
Quoting Centrair (Reply 20): The U.S. is Japan's strategic partner and security as Japan does not have a standing military...only a self defense force.
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