Summary

""Too many Americans, especially in our government, are not aware of what Europe is doing to kill off our aerospace industry," said US Sen. Patty Murray, referring to government subsidies and other support provided to Airbus. Says it all, really.

Analysis

This erudite analysis of the preparations being made in Washington State to prevent a repeat fallout from the erroneous USAF tanker award last year is a clear indication of the extent to which on a practical as well as a prestige level, the USAF tanker is a critical contract for the future of the US aerospace industry.

200,000+ jobs is a sizeable payroll and is clearly being cited as a counter to the latest hyperbole by Airbus that the A400M "supports 40,000 European jobs".

Further blogger-based speculation in the past 24 hours that Boeing might be strategically positioning itself to set up a second 787 production line, but this time outside Washington State, could lend further grist to the pro-WA business community's mill whether or not it takes the speculation seriously.

Since Boeing moved its international headquarters out of Seattle to Chicago in 2001 and given the undercurrent of industrial unrest which still prevails in WA and which was only temporarily bought-off in November 2008's strike settlement, it would have been remiss of Boeing not to look elsewhere. How, after all, can you establish the world's most extensive international supply chain yet adhere to a domestic policy of keeping all your eggs in the one basket? Then letting the unions carry the thing, too...? Hardly.

Whether Boeing stays in Washington State or sets up a second 787 line elsewhere (inevitable if the current 856-aircraft backlog is not to become unsustainable) is not a matter of subsidies, tax breaks or lobby groups such as those championed here by Sen. Smith, important part of the equation though these undoubtedly are. What is at stake is long-term industrial viability, customer confidence and a forward-looking rather than historically-oriented management approach (eg, international rather than domestic, and even there, two baskets rather than one).

It's only 500 miles and one in-between state from Mobile, AL to Charleston, NC, as the crow flies. It is entirely conceivable that Boeing will build the USAF tanker in WA should it win the upcoming contest and will also build a second 787 line in South Carolina, leaving Mobile, AL, to be the world center for Airbus A350XWB overhead-bin design (which is what it started out doing).

And that's not blogger speculation, just pure strategic thinking.

Doug McVitie consults with leading institutions through GLG

Doug McVitie, Founder & Chief Consultant

What is a GLG Leader?|GLG Leaders are a separate tier of Council Members with a Council Rank in the top 5%. These GLG Member Program participants are eligible for ongoing, in-depth consultative relationships with GLG clients.

Founder & Chief Consultant, Arran Aerospace

 
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.