Why are aircraft parts built in different places and assembled in one?
$begingroup$
Airbus has its manufacturing facilities in Spain, France, Great Britain and Germany. Each country produces different parts of the aircraft and is finally assembled in one place.
Why is this? Wouldn't it be more economically sound that everything was built and assembled in one place? Is it because all of the countries in Airbus group have to have some work? Is it because you can't get all those workers in just one country? I don't understand economical and logistical logic behind it (if there is one).
I believe Boeing has the same practice which puzzles me even more, since USA is more of a one country than EU. Is it really cheaper to manufacture something big as a wing overseas and transport it to one facility?
airbus boeing economics
New contributor
$endgroup$
add a comment |
$begingroup$
Airbus has its manufacturing facilities in Spain, France, Great Britain and Germany. Each country produces different parts of the aircraft and is finally assembled in one place.
Why is this? Wouldn't it be more economically sound that everything was built and assembled in one place? Is it because all of the countries in Airbus group have to have some work? Is it because you can't get all those workers in just one country? I don't understand economical and logistical logic behind it (if there is one).
I believe Boeing has the same practice which puzzles me even more, since USA is more of a one country than EU. Is it really cheaper to manufacture something big as a wing overseas and transport it to one facility?
airbus boeing economics
New contributor
$endgroup$
$begingroup$
I am not sure you can get a really qualified answer—someone from rather high up in those companies would have to confirm it—or much detail—the topic would probably fill a book.
$endgroup$
– Jan Hudec
1 hour ago
$begingroup$
One big happy continent.
$endgroup$
– CrossRoads
1 hour ago
$begingroup$
Planes from Australia or Antarctica?
$endgroup$
– Peter
1 hour ago
add a comment |
$begingroup$
Airbus has its manufacturing facilities in Spain, France, Great Britain and Germany. Each country produces different parts of the aircraft and is finally assembled in one place.
Why is this? Wouldn't it be more economically sound that everything was built and assembled in one place? Is it because all of the countries in Airbus group have to have some work? Is it because you can't get all those workers in just one country? I don't understand economical and logistical logic behind it (if there is one).
I believe Boeing has the same practice which puzzles me even more, since USA is more of a one country than EU. Is it really cheaper to manufacture something big as a wing overseas and transport it to one facility?
airbus boeing economics
New contributor
$endgroup$
Airbus has its manufacturing facilities in Spain, France, Great Britain and Germany. Each country produces different parts of the aircraft and is finally assembled in one place.
Why is this? Wouldn't it be more economically sound that everything was built and assembled in one place? Is it because all of the countries in Airbus group have to have some work? Is it because you can't get all those workers in just one country? I don't understand economical and logistical logic behind it (if there is one).
I believe Boeing has the same practice which puzzles me even more, since USA is more of a one country than EU. Is it really cheaper to manufacture something big as a wing overseas and transport it to one facility?
airbus boeing economics
airbus boeing economics
New contributor
New contributor
New contributor
asked 2 hours ago
civancivan
1061
1061
New contributor
New contributor
$begingroup$
I am not sure you can get a really qualified answer—someone from rather high up in those companies would have to confirm it—or much detail—the topic would probably fill a book.
$endgroup$
– Jan Hudec
1 hour ago
$begingroup$
One big happy continent.
$endgroup$
– CrossRoads
1 hour ago
$begingroup$
Planes from Australia or Antarctica?
$endgroup$
– Peter
1 hour ago
add a comment |
$begingroup$
I am not sure you can get a really qualified answer—someone from rather high up in those companies would have to confirm it—or much detail—the topic would probably fill a book.
$endgroup$
– Jan Hudec
1 hour ago
$begingroup$
One big happy continent.
$endgroup$
– CrossRoads
1 hour ago
$begingroup$
Planes from Australia or Antarctica?
$endgroup$
– Peter
1 hour ago
$begingroup$
I am not sure you can get a really qualified answer—someone from rather high up in those companies would have to confirm it—or much detail—the topic would probably fill a book.
$endgroup$
– Jan Hudec
1 hour ago
$begingroup$
I am not sure you can get a really qualified answer—someone from rather high up in those companies would have to confirm it—or much detail—the topic would probably fill a book.
$endgroup$
– Jan Hudec
1 hour ago
$begingroup$
One big happy continent.
$endgroup$
– CrossRoads
1 hour ago
$begingroup$
One big happy continent.
$endgroup$
– CrossRoads
1 hour ago
$begingroup$
Planes from Australia or Antarctica?
$endgroup$
– Peter
1 hour ago
$begingroup$
Planes from Australia or Antarctica?
$endgroup$
– Peter
1 hour ago
add a comment |
4 Answers
4
active
oldest
votes
$begingroup$
You can only hire so many people at one place, and also only find so much land there, so when the whole process no longer fits, there is no other option than start building components at other places and move them to the final assembly place.
In part, it is also historical. Airbus, but to an extent Boeing too, was formed by mergers of smaller companies as building a plane became more complex over time. So the companies got already working facilities with already qualified workers. Closing them down would lose them those workers, and cause quite a bit of bad publicity too (and at least in case of Airbus some political pressure), so they got used for whatever part of the process fits in them.
And some factories simply don't have any unused land around them, so the companies can't grow them even if they want to and have to open new ones instead. This is probably worse in Europe, which is more densely populated, so building a really big factory is basically out of question anywhere.
$endgroup$
add a comment |
$begingroup$
There are many considerations in where parts are manufactured or assembled, and not all are directly related to economics.
Both Boeing and Airbus have assembly lines located around the world, so it can make more sense to consolidate production of components in one place. Manufacturing large parts requires a huge investment in tooling and machinery. For example, the large autoclaves used to produce large sections of the 787 were very expensive. Boeing decided to locate them all in South Carolina, and fly some of the parts to Washington for final assembly. Even with modern technology, producing repeatable parts is much easier with one location. Some skills may also be fairly specific, and build up the expertise in a certain area.
There are also political aspects. In return for allowing their airlines to purchase aircraft, countries like to see some sort of return on that investment. You can imagine there might be a bit of backlash in Europe if Airbus decided it was going to move all manufacturing to France. There are already concerns over how Brexit may affect Airbus manufacturing in the UK.
So why not just have all the final assembly in one location as well? Politics factor in here too, which is why Airbus-designed airliners being assembled in France, Germany, China, and the US, rather than in one location. Even Boeing, which had traditionally assembled all of its aircraft in the Seattle area, chose to locate major parts of 787 manufacturing and assembly in South Carolina, and recently opened a finishing center for the 737 in China.
But the deal goes both ways. Some of the cost of splitting up manufacturing locations can be recovered by "shopping around" between cities, states, and countries, to see who is willing to offer more compelling terms in return for moving jobs there.
There are also economic reasons to split up production. Natural or manmade disasters, politics, or just accidents can affect local areas. This allows companies to diversify their investments geographically, so that any issues may only affect a small part of the supply chain, rather than most or all of it, if it were concentrated in one place.
$endgroup$
add a comment |
$begingroup$
This has not mich to do with aviation. All big companies are required to spread around the world. It depends on where your workforce lifes, where does the customers reside and where you get your natural resources and political conditions.
Airbus was merged together from smaller and bigger companies founded across Europe. It was fostered by politicians* across Europe and because some companies have special abilities, workers, tools and so on they produce their special stuff and others put it together. Airbus also has bought some things, e.g. the A220 project from Bombardier.
Boeing has bought a lot of companies, just to name McDonnellDouglas or Rockwell or Hughes. And also facilities across the world, e.g. even China.
The main point is, neither a large microsystem nor a big monolith are perfect. The nature of infrastructure, people, place, history and logistics prefer a mixed setup. Also outsourcing (expensive and risky) nor insourcing (expensive and risky) everything are working well.
Some things can get really big, like Volkswagen in Wolfsburg, but it requires even own power plants. But well, they produce cars in Czech, Spain, Italy, China and the USA. Probably forgot something, Great Britain? Mexico? South Africa? Brazil? So it’s rather distribute. Intel is another example, their Fabs are big and spread around the world. Same for software, Red Hat is mainly working in Czech and the USA, but also in some other places.
- AFAIK the famous/infamous Franz Josef Strauss was a supporter of the A300 and himself pilot.
$endgroup$
$begingroup$
+1 The second and third paragraphs are the answer to the question
$endgroup$
– Dave Gremlin
34 mins ago
add a comment |
$begingroup$
The main reason is the manufacturers have mostly gone to a "risk sharing partner" model of development because no one wants to put out the coin required to develop an entire program in-house. So manufacturer X will take on company Y, Z and D and C as partners, more or less co-equal, to design some of the major components as well as manufacture them. The partner takes on the costs, support obligations and profit share of the component or system.
The upside is the OEM can develop a design with only half the capital of doing it in-house, and only takes half the risk, but at the same time gives up half the profit potential and gives up a lot of control because the partner is "at the same level" you might say and is not as easy to boss around when things aren't going well and there is disagreement on what to do about it.
Not ideal, but better than a project not going forward at all.
$endgroup$
add a comment |
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4 Answers
4
active
oldest
votes
4 Answers
4
active
oldest
votes
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$begingroup$
You can only hire so many people at one place, and also only find so much land there, so when the whole process no longer fits, there is no other option than start building components at other places and move them to the final assembly place.
In part, it is also historical. Airbus, but to an extent Boeing too, was formed by mergers of smaller companies as building a plane became more complex over time. So the companies got already working facilities with already qualified workers. Closing them down would lose them those workers, and cause quite a bit of bad publicity too (and at least in case of Airbus some political pressure), so they got used for whatever part of the process fits in them.
And some factories simply don't have any unused land around them, so the companies can't grow them even if they want to and have to open new ones instead. This is probably worse in Europe, which is more densely populated, so building a really big factory is basically out of question anywhere.
$endgroup$
add a comment |
$begingroup$
You can only hire so many people at one place, and also only find so much land there, so when the whole process no longer fits, there is no other option than start building components at other places and move them to the final assembly place.
In part, it is also historical. Airbus, but to an extent Boeing too, was formed by mergers of smaller companies as building a plane became more complex over time. So the companies got already working facilities with already qualified workers. Closing them down would lose them those workers, and cause quite a bit of bad publicity too (and at least in case of Airbus some political pressure), so they got used for whatever part of the process fits in them.
And some factories simply don't have any unused land around them, so the companies can't grow them even if they want to and have to open new ones instead. This is probably worse in Europe, which is more densely populated, so building a really big factory is basically out of question anywhere.
$endgroup$
add a comment |
$begingroup$
You can only hire so many people at one place, and also only find so much land there, so when the whole process no longer fits, there is no other option than start building components at other places and move them to the final assembly place.
In part, it is also historical. Airbus, but to an extent Boeing too, was formed by mergers of smaller companies as building a plane became more complex over time. So the companies got already working facilities with already qualified workers. Closing them down would lose them those workers, and cause quite a bit of bad publicity too (and at least in case of Airbus some political pressure), so they got used for whatever part of the process fits in them.
And some factories simply don't have any unused land around them, so the companies can't grow them even if they want to and have to open new ones instead. This is probably worse in Europe, which is more densely populated, so building a really big factory is basically out of question anywhere.
$endgroup$
You can only hire so many people at one place, and also only find so much land there, so when the whole process no longer fits, there is no other option than start building components at other places and move them to the final assembly place.
In part, it is also historical. Airbus, but to an extent Boeing too, was formed by mergers of smaller companies as building a plane became more complex over time. So the companies got already working facilities with already qualified workers. Closing them down would lose them those workers, and cause quite a bit of bad publicity too (and at least in case of Airbus some political pressure), so they got used for whatever part of the process fits in them.
And some factories simply don't have any unused land around them, so the companies can't grow them even if they want to and have to open new ones instead. This is probably worse in Europe, which is more densely populated, so building a really big factory is basically out of question anywhere.
answered 1 hour ago
Jan HudecJan Hudec
38.5k3100186
38.5k3100186
add a comment |
add a comment |
$begingroup$
There are many considerations in where parts are manufactured or assembled, and not all are directly related to economics.
Both Boeing and Airbus have assembly lines located around the world, so it can make more sense to consolidate production of components in one place. Manufacturing large parts requires a huge investment in tooling and machinery. For example, the large autoclaves used to produce large sections of the 787 were very expensive. Boeing decided to locate them all in South Carolina, and fly some of the parts to Washington for final assembly. Even with modern technology, producing repeatable parts is much easier with one location. Some skills may also be fairly specific, and build up the expertise in a certain area.
There are also political aspects. In return for allowing their airlines to purchase aircraft, countries like to see some sort of return on that investment. You can imagine there might be a bit of backlash in Europe if Airbus decided it was going to move all manufacturing to France. There are already concerns over how Brexit may affect Airbus manufacturing in the UK.
So why not just have all the final assembly in one location as well? Politics factor in here too, which is why Airbus-designed airliners being assembled in France, Germany, China, and the US, rather than in one location. Even Boeing, which had traditionally assembled all of its aircraft in the Seattle area, chose to locate major parts of 787 manufacturing and assembly in South Carolina, and recently opened a finishing center for the 737 in China.
But the deal goes both ways. Some of the cost of splitting up manufacturing locations can be recovered by "shopping around" between cities, states, and countries, to see who is willing to offer more compelling terms in return for moving jobs there.
There are also economic reasons to split up production. Natural or manmade disasters, politics, or just accidents can affect local areas. This allows companies to diversify their investments geographically, so that any issues may only affect a small part of the supply chain, rather than most or all of it, if it were concentrated in one place.
$endgroup$
add a comment |
$begingroup$
There are many considerations in where parts are manufactured or assembled, and not all are directly related to economics.
Both Boeing and Airbus have assembly lines located around the world, so it can make more sense to consolidate production of components in one place. Manufacturing large parts requires a huge investment in tooling and machinery. For example, the large autoclaves used to produce large sections of the 787 were very expensive. Boeing decided to locate them all in South Carolina, and fly some of the parts to Washington for final assembly. Even with modern technology, producing repeatable parts is much easier with one location. Some skills may also be fairly specific, and build up the expertise in a certain area.
There are also political aspects. In return for allowing their airlines to purchase aircraft, countries like to see some sort of return on that investment. You can imagine there might be a bit of backlash in Europe if Airbus decided it was going to move all manufacturing to France. There are already concerns over how Brexit may affect Airbus manufacturing in the UK.
So why not just have all the final assembly in one location as well? Politics factor in here too, which is why Airbus-designed airliners being assembled in France, Germany, China, and the US, rather than in one location. Even Boeing, which had traditionally assembled all of its aircraft in the Seattle area, chose to locate major parts of 787 manufacturing and assembly in South Carolina, and recently opened a finishing center for the 737 in China.
But the deal goes both ways. Some of the cost of splitting up manufacturing locations can be recovered by "shopping around" between cities, states, and countries, to see who is willing to offer more compelling terms in return for moving jobs there.
There are also economic reasons to split up production. Natural or manmade disasters, politics, or just accidents can affect local areas. This allows companies to diversify their investments geographically, so that any issues may only affect a small part of the supply chain, rather than most or all of it, if it were concentrated in one place.
$endgroup$
add a comment |
$begingroup$
There are many considerations in where parts are manufactured or assembled, and not all are directly related to economics.
Both Boeing and Airbus have assembly lines located around the world, so it can make more sense to consolidate production of components in one place. Manufacturing large parts requires a huge investment in tooling and machinery. For example, the large autoclaves used to produce large sections of the 787 were very expensive. Boeing decided to locate them all in South Carolina, and fly some of the parts to Washington for final assembly. Even with modern technology, producing repeatable parts is much easier with one location. Some skills may also be fairly specific, and build up the expertise in a certain area.
There are also political aspects. In return for allowing their airlines to purchase aircraft, countries like to see some sort of return on that investment. You can imagine there might be a bit of backlash in Europe if Airbus decided it was going to move all manufacturing to France. There are already concerns over how Brexit may affect Airbus manufacturing in the UK.
So why not just have all the final assembly in one location as well? Politics factor in here too, which is why Airbus-designed airliners being assembled in France, Germany, China, and the US, rather than in one location. Even Boeing, which had traditionally assembled all of its aircraft in the Seattle area, chose to locate major parts of 787 manufacturing and assembly in South Carolina, and recently opened a finishing center for the 737 in China.
But the deal goes both ways. Some of the cost of splitting up manufacturing locations can be recovered by "shopping around" between cities, states, and countries, to see who is willing to offer more compelling terms in return for moving jobs there.
There are also economic reasons to split up production. Natural or manmade disasters, politics, or just accidents can affect local areas. This allows companies to diversify their investments geographically, so that any issues may only affect a small part of the supply chain, rather than most or all of it, if it were concentrated in one place.
$endgroup$
There are many considerations in where parts are manufactured or assembled, and not all are directly related to economics.
Both Boeing and Airbus have assembly lines located around the world, so it can make more sense to consolidate production of components in one place. Manufacturing large parts requires a huge investment in tooling and machinery. For example, the large autoclaves used to produce large sections of the 787 were very expensive. Boeing decided to locate them all in South Carolina, and fly some of the parts to Washington for final assembly. Even with modern technology, producing repeatable parts is much easier with one location. Some skills may also be fairly specific, and build up the expertise in a certain area.
There are also political aspects. In return for allowing their airlines to purchase aircraft, countries like to see some sort of return on that investment. You can imagine there might be a bit of backlash in Europe if Airbus decided it was going to move all manufacturing to France. There are already concerns over how Brexit may affect Airbus manufacturing in the UK.
So why not just have all the final assembly in one location as well? Politics factor in here too, which is why Airbus-designed airliners being assembled in France, Germany, China, and the US, rather than in one location. Even Boeing, which had traditionally assembled all of its aircraft in the Seattle area, chose to locate major parts of 787 manufacturing and assembly in South Carolina, and recently opened a finishing center for the 737 in China.
But the deal goes both ways. Some of the cost of splitting up manufacturing locations can be recovered by "shopping around" between cities, states, and countries, to see who is willing to offer more compelling terms in return for moving jobs there.
There are also economic reasons to split up production. Natural or manmade disasters, politics, or just accidents can affect local areas. This allows companies to diversify their investments geographically, so that any issues may only affect a small part of the supply chain, rather than most or all of it, if it were concentrated in one place.
answered 1 hour ago
foootfooot
51.7k17166312
51.7k17166312
add a comment |
add a comment |
$begingroup$
This has not mich to do with aviation. All big companies are required to spread around the world. It depends on where your workforce lifes, where does the customers reside and where you get your natural resources and political conditions.
Airbus was merged together from smaller and bigger companies founded across Europe. It was fostered by politicians* across Europe and because some companies have special abilities, workers, tools and so on they produce their special stuff and others put it together. Airbus also has bought some things, e.g. the A220 project from Bombardier.
Boeing has bought a lot of companies, just to name McDonnellDouglas or Rockwell or Hughes. And also facilities across the world, e.g. even China.
The main point is, neither a large microsystem nor a big monolith are perfect. The nature of infrastructure, people, place, history and logistics prefer a mixed setup. Also outsourcing (expensive and risky) nor insourcing (expensive and risky) everything are working well.
Some things can get really big, like Volkswagen in Wolfsburg, but it requires even own power plants. But well, they produce cars in Czech, Spain, Italy, China and the USA. Probably forgot something, Great Britain? Mexico? South Africa? Brazil? So it’s rather distribute. Intel is another example, their Fabs are big and spread around the world. Same for software, Red Hat is mainly working in Czech and the USA, but also in some other places.
- AFAIK the famous/infamous Franz Josef Strauss was a supporter of the A300 and himself pilot.
$endgroup$
$begingroup$
+1 The second and third paragraphs are the answer to the question
$endgroup$
– Dave Gremlin
34 mins ago
add a comment |
$begingroup$
This has not mich to do with aviation. All big companies are required to spread around the world. It depends on where your workforce lifes, where does the customers reside and where you get your natural resources and political conditions.
Airbus was merged together from smaller and bigger companies founded across Europe. It was fostered by politicians* across Europe and because some companies have special abilities, workers, tools and so on they produce their special stuff and others put it together. Airbus also has bought some things, e.g. the A220 project from Bombardier.
Boeing has bought a lot of companies, just to name McDonnellDouglas or Rockwell or Hughes. And also facilities across the world, e.g. even China.
The main point is, neither a large microsystem nor a big monolith are perfect. The nature of infrastructure, people, place, history and logistics prefer a mixed setup. Also outsourcing (expensive and risky) nor insourcing (expensive and risky) everything are working well.
Some things can get really big, like Volkswagen in Wolfsburg, but it requires even own power plants. But well, they produce cars in Czech, Spain, Italy, China and the USA. Probably forgot something, Great Britain? Mexico? South Africa? Brazil? So it’s rather distribute. Intel is another example, their Fabs are big and spread around the world. Same for software, Red Hat is mainly working in Czech and the USA, but also in some other places.
- AFAIK the famous/infamous Franz Josef Strauss was a supporter of the A300 and himself pilot.
$endgroup$
$begingroup$
+1 The second and third paragraphs are the answer to the question
$endgroup$
– Dave Gremlin
34 mins ago
add a comment |
$begingroup$
This has not mich to do with aviation. All big companies are required to spread around the world. It depends on where your workforce lifes, where does the customers reside and where you get your natural resources and political conditions.
Airbus was merged together from smaller and bigger companies founded across Europe. It was fostered by politicians* across Europe and because some companies have special abilities, workers, tools and so on they produce their special stuff and others put it together. Airbus also has bought some things, e.g. the A220 project from Bombardier.
Boeing has bought a lot of companies, just to name McDonnellDouglas or Rockwell or Hughes. And also facilities across the world, e.g. even China.
The main point is, neither a large microsystem nor a big monolith are perfect. The nature of infrastructure, people, place, history and logistics prefer a mixed setup. Also outsourcing (expensive and risky) nor insourcing (expensive and risky) everything are working well.
Some things can get really big, like Volkswagen in Wolfsburg, but it requires even own power plants. But well, they produce cars in Czech, Spain, Italy, China and the USA. Probably forgot something, Great Britain? Mexico? South Africa? Brazil? So it’s rather distribute. Intel is another example, their Fabs are big and spread around the world. Same for software, Red Hat is mainly working in Czech and the USA, but also in some other places.
- AFAIK the famous/infamous Franz Josef Strauss was a supporter of the A300 and himself pilot.
$endgroup$
This has not mich to do with aviation. All big companies are required to spread around the world. It depends on where your workforce lifes, where does the customers reside and where you get your natural resources and political conditions.
Airbus was merged together from smaller and bigger companies founded across Europe. It was fostered by politicians* across Europe and because some companies have special abilities, workers, tools and so on they produce their special stuff and others put it together. Airbus also has bought some things, e.g. the A220 project from Bombardier.
Boeing has bought a lot of companies, just to name McDonnellDouglas or Rockwell or Hughes. And also facilities across the world, e.g. even China.
The main point is, neither a large microsystem nor a big monolith are perfect. The nature of infrastructure, people, place, history and logistics prefer a mixed setup. Also outsourcing (expensive and risky) nor insourcing (expensive and risky) everything are working well.
Some things can get really big, like Volkswagen in Wolfsburg, but it requires even own power plants. But well, they produce cars in Czech, Spain, Italy, China and the USA. Probably forgot something, Great Britain? Mexico? South Africa? Brazil? So it’s rather distribute. Intel is another example, their Fabs are big and spread around the world. Same for software, Red Hat is mainly working in Czech and the USA, but also in some other places.
- AFAIK the famous/infamous Franz Josef Strauss was a supporter of the A300 and himself pilot.
edited 42 mins ago
answered 47 mins ago
PeterPeter
90178
90178
$begingroup$
+1 The second and third paragraphs are the answer to the question
$endgroup$
– Dave Gremlin
34 mins ago
add a comment |
$begingroup$
+1 The second and third paragraphs are the answer to the question
$endgroup$
– Dave Gremlin
34 mins ago
$begingroup$
+1 The second and third paragraphs are the answer to the question
$endgroup$
– Dave Gremlin
34 mins ago
$begingroup$
+1 The second and third paragraphs are the answer to the question
$endgroup$
– Dave Gremlin
34 mins ago
add a comment |
$begingroup$
The main reason is the manufacturers have mostly gone to a "risk sharing partner" model of development because no one wants to put out the coin required to develop an entire program in-house. So manufacturer X will take on company Y, Z and D and C as partners, more or less co-equal, to design some of the major components as well as manufacture them. The partner takes on the costs, support obligations and profit share of the component or system.
The upside is the OEM can develop a design with only half the capital of doing it in-house, and only takes half the risk, but at the same time gives up half the profit potential and gives up a lot of control because the partner is "at the same level" you might say and is not as easy to boss around when things aren't going well and there is disagreement on what to do about it.
Not ideal, but better than a project not going forward at all.
$endgroup$
add a comment |
$begingroup$
The main reason is the manufacturers have mostly gone to a "risk sharing partner" model of development because no one wants to put out the coin required to develop an entire program in-house. So manufacturer X will take on company Y, Z and D and C as partners, more or less co-equal, to design some of the major components as well as manufacture them. The partner takes on the costs, support obligations and profit share of the component or system.
The upside is the OEM can develop a design with only half the capital of doing it in-house, and only takes half the risk, but at the same time gives up half the profit potential and gives up a lot of control because the partner is "at the same level" you might say and is not as easy to boss around when things aren't going well and there is disagreement on what to do about it.
Not ideal, but better than a project not going forward at all.
$endgroup$
add a comment |
$begingroup$
The main reason is the manufacturers have mostly gone to a "risk sharing partner" model of development because no one wants to put out the coin required to develop an entire program in-house. So manufacturer X will take on company Y, Z and D and C as partners, more or less co-equal, to design some of the major components as well as manufacture them. The partner takes on the costs, support obligations and profit share of the component or system.
The upside is the OEM can develop a design with only half the capital of doing it in-house, and only takes half the risk, but at the same time gives up half the profit potential and gives up a lot of control because the partner is "at the same level" you might say and is not as easy to boss around when things aren't going well and there is disagreement on what to do about it.
Not ideal, but better than a project not going forward at all.
$endgroup$
The main reason is the manufacturers have mostly gone to a "risk sharing partner" model of development because no one wants to put out the coin required to develop an entire program in-house. So manufacturer X will take on company Y, Z and D and C as partners, more or less co-equal, to design some of the major components as well as manufacture them. The partner takes on the costs, support obligations and profit share of the component or system.
The upside is the OEM can develop a design with only half the capital of doing it in-house, and only takes half the risk, but at the same time gives up half the profit potential and gives up a lot of control because the partner is "at the same level" you might say and is not as easy to boss around when things aren't going well and there is disagreement on what to do about it.
Not ideal, but better than a project not going forward at all.
answered 1 hour ago
John KJohn K
15.6k11647
15.6k11647
add a comment |
add a comment |
civan is a new contributor. Be nice, and check out our Code of Conduct.
civan is a new contributor. Be nice, and check out our Code of Conduct.
civan is a new contributor. Be nice, and check out our Code of Conduct.
civan is a new contributor. Be nice, and check out our Code of Conduct.
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$begingroup$
I am not sure you can get a really qualified answer—someone from rather high up in those companies would have to confirm it—or much detail—the topic would probably fill a book.
$endgroup$
– Jan Hudec
1 hour ago
$begingroup$
One big happy continent.
$endgroup$
– CrossRoads
1 hour ago
$begingroup$
Planes from Australia or Antarctica?
$endgroup$
– Peter
1 hour ago