Aerospace Update: Boeing Has Outsourcing Problem, Goodrich Sets Up in Mexico

From Thursday, a most excellent piece in The Journal on the challenges facing Boeing (BA) as it tries to bring its Dreamliner to market:

On Tuesday, Boeing Co. will give Wall Street a progress report on its 787 Dreamliner, as it scrambles to overcome a six-month delay in producing the new jet. A look inside the project reveals that the mess stems from one of its main selling points to investors -- global outsourcing.

When the Chicago aerospace giant set out four years ago to build the fuel-sipping jet, it figured the chief risk lay in perfecting a process to build much of the plane from carbon-fiber plastic instead of aluminum. Boeing focused so hard on getting the science right that it didn't grasp the significance of another big change: The 787 is the first jet in Boeing's 91-year history designed largely by other companies.

Definitely read the whole thing (via James Wallace @ Seattle PI).

Also, (and here's a link that's been festering in my Google Notebook way too long), an earlier Journal piece on why Mexico is becoming a place for Aerospace:

Mexico has moved to make it even easier for foreign companies to do business south of the border. Already, big names in aerospace such as Goodrich Corp. (GR) of the U.S. and Bombardier Inc. of Canada have set up facilities there.

The nation offers proximity and easy reach at a time when aerospace giants are under pressure to hit deadlines and deliver new aircraft to customers. Aerospace officials also say they are impressed by Mexico's deep talent pool. And if Mexico successfully bolsters its aerospace industry, it will demonstrate that skills burnished servicing the automotive sector can be transferred to higher-end markets.

There's a lesson here: unless one day we have ships as fast as planes, or planes as large as ships, there will always be a certain value to proximity. Either that, or we could stop building physical goods altogether, but that seems just as unlikely as ships as fast as planes.