1279shp
19th Oct 2005, 20:40
European planemaker Airbus' parent company EADS will make a key piece of US rival Boeing's latest passenger jet, in a sign of how outsourcing can trump national pride.
Boeing supplier Vought Aircraft Industries' announcement on Monday that EADS will be a subcontractor on its work on the 787 was at first glance a surprise considering that Boeing and Airbus -- two symbols of regional industrial might -- are facing off in a trade battle.
But analysts said the news, first reported by the Seattle Times, was an inevitable consequence of an engineering-intensive industry where a handful of companies have the know-how to build the necessary specialized parts.
"Subcontracting makes for strange bedfellows," said Richard Aboulafia, an analyst with the Teal Group, adding that the move was a symptom of "greater internationalization" of manufacturing that is an inevitable consequence of globalized airliner sales.
The 787, a jet built largely of composite materials, is one of the most outsourced planes in history, including 30 percent to be built by Japanese manufacturers.
Dallas-based Vought, which will build much of the plane's rear fuselage, said it had reached price agreements with companies including EADS, which will make a rear wall known as the aft pressure bulkhead.
Vought said Boeing had not limited which companies it could hire as subcontractors.
"Apparently this is a small global supply base," said Vought spokeswoman Lynne Warne. "In most cases it's a unique capability, so it's not like you can competitively bid a lot of these processes when there are only a handful of people who can do portions of this work."
EADS-Casa, EADS' Spanish unit, already makes the rudder for Boeing's 737 as well as the flaps and ailerons on its 777, Aboulafia said. Britain's BAE Systems which owns 20 percent of Airbus to EADS' 80 percent, also makes parts of the 777.
Airbus itself plans to outsource up to 70 percent of its aircraft production abroad, Chief Executive Gustav Humbert was quoted as saying in German newspapers on Monday.
Still, Aboulafia said Airbus has often been aggressive in acquiring companies in its supply chain, moving in the opposite direction of Boeing, which earlier this year sold off a key part of its jetmaking operations in the latest such move.
Boeing and Airbus are locked in a trade dispute over what Boeing calls unfair subsidies from European governments to Airbus planes like the A350, a rival for the 787.
Airbus has said Boeing also receives subsidies in the form of defense contracts from the US government, assistance from the state of Washington and Japanese government help for Boeing partners Fuji Heavy Industries, Kawasaki Heavy Industries and Mitsubishi Heavy Industries.
Boeing supplier Vought Aircraft Industries' announcement on Monday that EADS will be a subcontractor on its work on the 787 was at first glance a surprise considering that Boeing and Airbus -- two symbols of regional industrial might -- are facing off in a trade battle.
But analysts said the news, first reported by the Seattle Times, was an inevitable consequence of an engineering-intensive industry where a handful of companies have the know-how to build the necessary specialized parts.
"Subcontracting makes for strange bedfellows," said Richard Aboulafia, an analyst with the Teal Group, adding that the move was a symptom of "greater internationalization" of manufacturing that is an inevitable consequence of globalized airliner sales.
The 787, a jet built largely of composite materials, is one of the most outsourced planes in history, including 30 percent to be built by Japanese manufacturers.
Dallas-based Vought, which will build much of the plane's rear fuselage, said it had reached price agreements with companies including EADS, which will make a rear wall known as the aft pressure bulkhead.
Vought said Boeing had not limited which companies it could hire as subcontractors.
"Apparently this is a small global supply base," said Vought spokeswoman Lynne Warne. "In most cases it's a unique capability, so it's not like you can competitively bid a lot of these processes when there are only a handful of people who can do portions of this work."
EADS-Casa, EADS' Spanish unit, already makes the rudder for Boeing's 737 as well as the flaps and ailerons on its 777, Aboulafia said. Britain's BAE Systems which owns 20 percent of Airbus to EADS' 80 percent, also makes parts of the 777.
Airbus itself plans to outsource up to 70 percent of its aircraft production abroad, Chief Executive Gustav Humbert was quoted as saying in German newspapers on Monday.
Still, Aboulafia said Airbus has often been aggressive in acquiring companies in its supply chain, moving in the opposite direction of Boeing, which earlier this year sold off a key part of its jetmaking operations in the latest such move.
Boeing and Airbus are locked in a trade dispute over what Boeing calls unfair subsidies from European governments to Airbus planes like the A350, a rival for the 787.
Airbus has said Boeing also receives subsidies in the form of defense contracts from the US government, assistance from the state of Washington and Japanese government help for Boeing partners Fuji Heavy Industries, Kawasaki Heavy Industries and Mitsubishi Heavy Industries.