The issues mentioned by Vought are threefold: (1) Engineering dept reconstitution to share in the engineering/process work; (2) greenfield facility development; (3) subcontractors and liquidity.
Parts one and two are basically in the past: the engineering work is largely done, and the product is being produced, and the facility is up and running. Part three is trickier. Chances are that these are the guys who "shocked" Boeing when they took the contract and subbed out all sorts of engineering and other stuff; now we know why: they needed risk-sharing partners (read capital contributors) and engineers. The more they sub out the more they lose control over. The smart move on their part was to call for reinforcements NOW, rather than later, and Boeing should be able to help them get this under control.
Although the Vought saga shows a vulnerability in the distributed manufacturing model, it also shows a strength. The well-capitalized suppliers that have been performing well may see it as an opportunity to step up and seek to take a bigger share of the additional work that will be provided by a ramp-up (although they must balance their investment against the potential for a collapse in the global airliner market, as has often happened in the past). Moreover, if Vought manages to remove head from butt, then this program could be the ticket to their longer-term survival and regeneration, the saving of a proud name in American aviation manufacturing. LTV went through a lot from the 80s to today; maybe "V" will pull through and prosper. In short, the competitive give-and-take, the opportunity for some manufacturers to shine, prove themselves, and get more, are all part of the distributed model and are kinda cool.
In response to another poster, yeah, Alenia was having some problems, too. They say they've got them licked. We'll see.
As a frequent traveler on subway and railroad cars here in NYC that were made by the Japanese heavies, I never had any doubt that they'd do a bang-up job, and they have. And they appreciate the business, since their economy is a shadow of what it was during that period in the 80s and 90s where everybody was afraid that they were going to buy our whole country from us. Economics has cycles, some driven by political forces, some driven by the "blind hand", and some driven by genius and stupidity. Like here, like there, like everywhere. And the Japanese companies are doing great and thank us for their business.
As to the Boeing move to Chicago, remind me, but aren't there a couple of airlines that have substantial operations and executives there? Isn't aircraft-selling (and purchasing) a face-to-face, handshake business dominated by a few powerful personas? How many Boeing airline customers are based in the Pacific time zone? How's the domestic flight schedule out of SEA
these days? The schedule to major European cities that buy airliners? Where does most of the financing activity take place, and where are most military purchasing decisions made, and how many time zones are those away from Chicago? From Seattle? How easy is it to get the best younger executives to join your company when they know that their kids will ask, "Where's Dad tonight?" as Dad gets on yet another 5 hour flight to talk to bankers or government people? Whose kids will be in school with who-else's kids, and what charities and informal civil involvements will allow cross-communication between decision-makers during their daily lives? None of these issues is dispositive, of course, but these are the kinds of things that anybody considers when they choose a headquarters and that Boeing specifically considered when they were considering moving. (Dallas was another city that they were interested in, btw, and of course places like New York and Atlanta wanted to be considered.) Chicago is a compromise in a whole lot of ways, but it has strong commercial air service all over the world, making it easy for customers and salespeople and executives and financial folks and government officials from DC, and it has a lot of those other intangibles. Some of these intangibles have proven to be less-important than once thought, particularly when balanced against things like quality of life, cost of housing, education, etc., taxation rates for the corporation and its headquarters employees, etc. This is why so many companies resisted moving their headquarters from New York City for so long (remember, most of the industrial giants, military contractors, etc., had a substantial executive presence here in the 50s and 60s), and why once they fled the insanely-high taxes and cost of living, many found that they could do better, on balance, even without hobnobbing at the PTA or gym or country club or charity function. Bottom line, it's a complicated issue with risks and rewards. Having lived in Chicago, Dallas, LA
and here in NYC, I can say that lots of cities adapt their start times, bed times, etc., in their executive offices to where the people they have to interact are, and that one-hour-versus-three-hours thing is not insignificant. The rest...I have less insight to. Except that Chicago is one heck of a lot colder than New York in the winter. And that WIND. Yow. (But I also know that everybody I met during my three years there that was from Chicago couldn't imagine living anywhere else...I mean virtually to a person they felt that way...and relished living in the kind of place that routinely found lawyers and bankers and executives walking out of the office on a warming spring day and going to sit at Wrigley and watch the Cubs, or where the city just lights up like noplace else on nowhere so big a scale on the first warm day after the winter and everybody just stops what they are doing and sits outside at a cafe or in the neighborhood drinking something mood-altering and annually enjoying the kind of relaxed, what-me-worry, kind of group convivality that you find much less often in the Big Apple -- like during a citywide blackout.)