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Strategic destruction of the Western commercial aircraft sector: Implications of systems integration and international risk-sharing business models

Published online by Cambridge University Press:  03 February 2016

D. Pritchard  and
A. MacPherson
D. Pritchard
Affiliation:
Department of Geography, State University of New York, New York, USA
A. MacPherson
Affiliation:
Department of Geography, State University of New York, New York, USA
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Abstract

This paper offers a critical perspective on the changing organisational structure of the Western commercial aircraft industry. The role of systems integration based on risk-sharing partnerships for new aircraft programmes is explored. We find that build-to-print subcontracting relationships are being replaced by internationally devolved design and engineering tasks for airframe development, signaling a profound change in the geography of commercial aircraft production. While sensible from a financial standpoint, the international outsourcing of design-intensive production entails substantial amounts of technology transfer–including the delivery of proprietary knowledge to risk-sharing partners. For several of the advanced market economies, including Canada, France, Germany, the UK, and the US, the long-range strategic downside is that foreign risk-sharing partners could eventually become competitors. Systems integration on a risk-sharing basis also implies home-country joblosses among skilled workers with expertise in design, engineering, and R&D.

Type
Research Article
Information
The Aeronautical Journal , Volume 111 , Issue 1119 , May 2007 , pp. 327 - 334
Copyright
Copyright © Royal Aeronautical Society 2007 

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