2. Contents
Dreamliner 787 – Overly Globalized? Outsourced? 2
Boeing’s Evolution of Globalization/Outsourcing Aircraft 3
Dreamliner 787: Over-Globalization of Frame Production? 4
Boeing’s Aggressive Global Sourcing Strategy – Illustrative China Case 5
Highly Complex Global Supply Chain Leads to Major Challenges 11
Airbus Globalization 17
Airbus 350XWB – Globalization Strategy 18
Airbus A350XWB - Frame Production Concentrated in Europe 19
Airbus 350XWB: Globalization of Supply Chain 22
China and Russia’s Unique Models: “Glocal-ization” Strategies 29
China Market: Foreign Investors: … hunger for China Opportunity 30
Road Forward: China Focusing Initially on Single-Aisle & Regional Jets 41
China’s “Glocalization” Strategy 42
China / Russia Partnership for Aircraft Development/Production? 45
The Ilyushin Il-96 46
Considerations for the Future of Aircraft Production 48
Competition in the Global Supply Chain Immense – USD100 billion 49
1
Launch costs of 787 approximately USD13.4 billion (01), again development costs of USD6-7 billion for 777A380 launch cost of USD10 – 12 billion, which in some estimates could be under by USD3-5 billion.Given that 2 models are being built, the launch costs will be covered by subsidies and/or Boeing's risk-sharing partners.Multiple bidders against each other
Boeing Actions• Second FAL encouraged by customers, but real bottleneck is supply chainBoeing had to ultimately buy Voigt and Alenia united States to take control of the significant operational problems in frames productionThey set up identical labs for engineers at the various companies.Cultural training, sensitivity, etc.Supplier InitiativesAlenia, Hawker de Havilland• Investing in second autoclave and further equipment to support production ramp-up.Kawasaki• Investing in new factory and production equipmentSpirit, Vought, Global Aeronautica• No investment in facilities or equipment, preparing for more gradual ramp-up• Spirit unilaterally shut down the production of CFRP fuselage barrels in January 2008. Production was slated to restart in 3Q 2008
Break from the past:-Pre-installed systems/completed subassembliesFew people 800 to 1,200Leaner assembly lineLower inventoryHigher timeJapanese now account for 35% of work share, first time Japanese have taken a lead role in mass production of subcontractors supported and funded by the Japanese government.
Break from the past:-Pre-installed systems/completed subassembliesFew people 800 to 1,200Leaner assembly lineLower inventoryHigher timeJapanese now account for 35% of work share, first time Japanese have taken a lead role in mass production of subcontractors supported and funded by the Japanese government.
Ergo: Eventually, Western airlines will find it hard to ignore Chinese aircraft that are fully FAA/JAA compliant – especially if they sell at a fraction of the cost of Western alternatives.Recent estimates have the C919 launch investment pegged between USD6.5 and 7.7 billion, which could have the prototype built by 2015.C919 is intended to be direct competitor to Boeing’s 737 and Airbus’s A320 models
Ergo: Eventually, Western airlines will find it hard to ignore Chinese aircraft that are fully FAA/JAA compliant – especially if they sell at a fraction of the cost of Western alternatives.Recent estimates have the C919 launch investment pegged between USD6.5 and 7.7 billion, which could have the prototype built by 2015.C919 is intended to be direct competitor to Boeing’s 737 and Airbus’s A320 models
Ergo: Eventually, Western airlines will find it hard to ignore Chinese aircraft that are fully FAA/JAA compliant – especially if they sell at a fraction of the cost of Western alternatives.Recent estimates have the C919 launch investment pegged between USD6.5 and 7.7 billion, which could have the prototype built by 2015.C919 is intended to be direct competitor to Boeing’s 737 and Airbus’s A320 models