Chapter 12. Globalization Bites Boeing{0}
In the article I discovered in businessweek the topic is globalization. The article talks about the airplane manufacturer Boeing and how globalization can be both positive and negative for companies. In this article Boeing is on the negative end of globalization. Boeing recently lost a $35 billion contract with the US Air Force to foreign companies called Northrop Grumman and the European Aeronautic Defense & Space. This is a huge contract for the American company and now the European companies will have it. This is a prime example for how outsourcing to foreign companies can seriously affect American business.
On the other hand, without globalization companies like Boeing wouldn’t be worth the $66 billion it is currently worth. This is because roughly 60% of all parts Boeing uses to assemble its aircraft are from foreign companies. Boeing is very upset about this contract because the contract it lost is not for commercial planes but for US military planes. Many belive contracts to the US military should go to American based companies. This topic was actually a key point in the Democratic party election between Barack Obama and Hillary Clinton. The contract has brought about outrage by many American citizens and companies who fear losses like this could become a trend.
The article goes on to explain that globalization, especially in the airline industry is necessary. Airplanes require state of the art parts and for the most part to obtain them you must go overseas to acquire them. The article was very interesting about globalization and how necessary it is to business. We can thank globalization for many technological advances, it is what makes it all possible.
Epstein, Keith. Globalization Bites Boeing. Businessweek. March 13, 2008. http://www.businessweek.com/magazine/content/08_12/b4076032773142.htm