U.S. Aerospace Sector Outsources its Own Innovations to Potential Foreign Competitors, UB Study Says

Release Date: September 7, 2004 This content is archived.


BUFFALO, N.Y. -- Boeing Corp., the only remaining U.S. commercial aircraft manufacturer, is outsourcing the technologies and innovations that once made it the aerospace sector's undisputed global leader, according to a study by two University at Buffalo industrial geographers.

"America's global leadership in aerospace isn't being attacked, it's being given away," says David J. Pritchard, Ph.D., research associate with the Canada-U.S. Trade Center in the UB Department of Geography, who worked for 20 years in commercial airframe manufacturing for suppliers servicing global aircraft manufacturers.

In the paper, "Outsourcing U.S. Commercial Aircraft Technology and Innovation: Implications for the Industry's Long-Term Design and Build Capability," under review by R&D Management, Pritchard and co-author Alan Macpherson, Ph.D., professor and chair of the Department of Geography in the UB College of Arts and Sciences, conclude that Boeing is trading away its technical know-how in return for financial support from overseas governments, some of whom are developing their own aerospace industries.

The paper is available at http://www.geog.buffalo.edu/custac/OccasionalPaperNo29.pdf.

It traces how Boeing has become increasingly reliant on a systems integration production mode, in which key components and sub-assemblies of planes are designed and manufactured by foreign, risk-sharing suppliers.

That makes financial sense for Boeing, write Pritchard and Macpherson, since it spreads risk among the various partners, but it has long-term consequences for the aerospace industry and its competitiveness.

Boeing often enters into these agreements, they explain, in order to secure orders from foreign governments. In doing so, Boeing must transfer some of its technological expertise to foreign suppliers.

That's why, since the late 1970s, the authors write, the foreign content of Boeing's planes has been increasing steadily, and foreign content of Boeing's 7e7 "Dreamliner" could run as high as 70 percent.

In what is a first for a U.S. commercial plane, the entire wing assembly of this aircraft will be built by Japanese firms.

"There will probably be more Japanese working on the 7e7 than Americans," write the authors.

"We're not designing planes anymore and we're not building them anymore," says Pritchard.

As the top U.S. export sector for more than 50 years, he says, aerospace has been the origin of many critical advanced technologies, many of which were successfully adopted by other industries, such as automotive and electronics.

"Boeing has allowed these arrangements to morph into technology transfer arrangements, which now jeopardize the future of the U.S. aerospace industrial base," he says. "Systems integration implies a steady cutback in U.S. manufacturing activity and ultimately, U.S. manufacturing capability."

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