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UPDATED 1-16: Boeing Learns The Hard Way That Outsourcing Hurts In The Long Run

The Boeing company has been in and out of the media for many years now with the creation of the ‘Dreamliner’.  The Dreamliner is Boeing’s newest airplane that could eventually replace all other international airplanes.  The importance of the Dreamliner not withstanding, Boeing was in every newspaper for another reason.  Their epic battle with the International Association of Machinist (IAM).

Before construction of the new Dreamliner could begin, Boeing wanted to move their manufacturing facility to South Carolina.  Boeing said that space in South Carolina is easier and cheaper to obtain than Washington state where they previously build airplanes.  The IAM said the reason for the abrupt move was a way for Boeing to break their labor contracts and move to a Right To Work state.

This sparked a national conversation about Right To Work.  Couple this with labor’s fight to keep New Hampshire, Indiana, Michigan, and Wisconsin from falling into the Right To Work trap it dominated the news.  Even Presidential candidates began talking about the RTW/Boeing fight.

After all the dust settled and the NLRB ruled that Boeing had the right to move, but not the right to break their contracts the Dreamliner was moving forward.

Now the Dreamliner is in the news once again and not for a good reason.  “Boeing Dreamliner fuel leak traced to valve-related problem.” This is just another example of the problems that Boeing has endured since they decided to use non-union and outsourced products in the construction of these planes.

Boeing has been trying to save money in the construction of the Dreamliner by outsourcing much of the component construction to chinese companies.

“Boeing today announced agreements with Chinese suppliers worth an estimated US$600 million for production of commercial airplane parts and components, including the first firm contract with such suppliers to build parts for the all-new Boeing 787 Dreamliner.” (Boeing Press Release)

This outsourcing may have saved them money at first, then again it outsourcing seems to save money at first.  The LA Times reports on Boeing’s headaches over the delays in Dreamliner construction.

“The next-generation airliner is billions of dollars over budget and about three years late; the first paying passengers won’t be boarding until this fall, if then. Some of the delay stems from the plane’s advances in design, engineering and material, which made it harder to build.”

“But much of the blame belongs to the company’s quantum leap in farming out the design and manufacture of crucial components to suppliers around the nation and in foreign countries such as Italy, Sweden, China, and South Korea. Boeing’s dream was to save money. The reality is that it would have been cheaper to keep a lot of this work in-house.” (emphasis added)

The USA Today reports on why the Dreamliner construction is so behind schedule and over budget

“Parts for the jet are made by 52 suppliers scattered around the globe. And, in a first for Boeing, large sections of the jet are built by these outside vendors and then cobbled together. That process, aimed at saving money, wasn’t as smooth as Boeing had hoped.”

After a second Dreamliner at Boston’s Logan airport had problems the FAA has order a full investigation into the problem. This has pushed Boeing stock prices down by $2.50 a share (3.3%).  Proving that outsourcing the manufacturing of these parts is going to cost Boeing even more than they thought.

For nearly fifty years Boeing made airplanes at their manufacturing facility in Everret Washington, by good IAM workers.  Now only a few months after they announce the completion of their 100th airplane Boeing is proving once again that American workers are better and more cost effective.

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UPDATED 1-16-13

The Federal Aviation Administration has ground all ‘Dreamliners’ until the conduct a full review.


NBC News reports

The Canadian Television Network interview an aviation expect to talk about the new features and the FAA grounding all ‘Dreamliners’.  Video Here




About Matt Murray

Matt Murray is the creator and an author on the NH Labor News. He is a union member and advocate for labor and progressive politics. He also works with other unions and members to help spread our message. Follow him on Twitter @NHLabor_News
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