[hacketthfk]

Boeing's core capability is regulatory arbitrage and getting gov contracts, so it makes sense for them to outsource everything non-core, like building planes. Similar to NASA.

Boeing did the correct thing outsourcing the actual building of planes, so they could focus on their core competency. Standard tech industry advice.

[kmeisthax]

I'm sick and tired of "core competency" rhetoric. Business management should not rigidly follow the UNIX philosophy, there's plenty of reasons you wouldn't want to outsource everything.

Furthermore, while those core competencies might sound correct to Boeing, they wouldn't sound like it to Boeing's customers. You're paying Boeing for a plane and support, not a trading company that can find five other companies who can outsource each task to a different firm that delegates responsibility to...

[riffraff]

I remember someone on this forum argued at some point that business management is basically just flip flop between "things are bad, we need more vertical integration" or "things are bad, we need more core focus".

[kmeisthax]

So, the problem isn't outsourcing bad or vertical integration bad. Vertical integration has benefits for things that can differentiate you (e.g. Apple's custom silicon and operating system software). If it's not differentiating, then buy instead of build.

The problem is that there's a mismatch between the customers and management as to what the core focus of the business actually is. Every business wants to become a weirdly shaped futures trader that just arbitrages on other people's work - i.e. one that has no core competency whatsoever. Everything gets outsourced so that cost pressure can be used to obfuscate fraud.

[sgt101]

The key think for Boeings customers is finance.

If you can get 70 airframes for five years in a way that means that you just have to borrow a nubbin of cash and then make regular payments that's what you will do. All your actual money can go to the shareholders and exec compensation. If the business (airline) folds the airframes go back to Boeing and you go on to the next gig - who cares...

If Boeing will take the risk the banks are happy to fund, local airlines - well the banks will be nervous. Every other consideration is either imposed by regulation or of no interest at all.

[novok]

Core competency is a reminder, otherwise you start doing things like making your own chat system and word processing software when you should be just buying slack and google workspace while you are a B2B database company.

[therealbilly]

Kelly Johnson of Lockheed (designer and PM for record breaking aircraft) had a very strong position on core competency. It had to be protected and advanced at all costs.

[gchokov]

Yeah they did the correct thing, only to get their airplanes falling like apples.

[shiroiuma]

Airplanes falling like apples isn't a bad thing; the only bad thing is delivering poor shareholder value. If some planes crash as a result of improved shareholder value, that's fine. Just ask the FAA (or just look at how the FAA "punished" Boeing for these failures that cost the lives of hundreds).

[archerx]

Apparently for some people the correct thing is profit over safety/quality which is quite sociopathic and the cancer that is killing our society.

[specialist]

Agree with #1. Number #2 should be qualified: Good for Wall St and Boeing execs, at the expense of everyone else.

Then State House Rep Reuven Carlyle was the point person for negotiating WA state's $11.4b (?) tax breaks for Boeing. With non-binding terms like agreeing to create jobs. Boeing's negotiators completely lost their shit when Carlyle tried to add good government amendments like transparency (to the public) about the actual monetary value of tax breaks.

Similar to the US Sen Al Franken's inside baseball version of wrestling with corporations over the mergers of telecoms & cables. The corps demanded all, conceded nothing, had no intention of honoring their promises, completely lost their minds when Franken tried to get future promises in writing.

The USA is a Corporatocracy. Partisanship, culture wars, moral panics, food fights, etc. all serve to obscure that central fact.

[dralley]

There's an entire paper about why this is nonsense, written by someone AT Boeing, 23 years ago.

https://www.documentcloud.org/documents/69746-hart-smith-on-...

[cryptonector]

GP was being sardonic.

[TheBigSalad]

Isn't their core competency supposed to be building airplanes?