Is the aerospace industry on the cusp of a great wave that will shift work to low-cost producers in China? Or is offshoring a minor phenomenon being exploited by companies to win concessions from workers and local governments? Taking the former view is William C. Parr, a faculty member of the University of Tennessee's Aerospace Executive MBA program. He recently returned from a three-month stay in China, where he taught and conducted research on offshoring and Chinese management practices.
The trainer market is fast becoming dependent on shared programs. BAE Systems' Hawk won a notable victory in this market in mid-2003, with an order for the U.K.'s Military Flying Training System (MFTS) competition. While only good for an initial 20 planes (with 24 more options), the order preserves a production line that had been in danger of closing. The order, and the launch of MFTS, also cements the U.K. lead in trainer manufacturing and services.
In October 2003, Singapore short-listed the Eurofighter Typhoon, Dassault Rafale and Boeing F-15 for its next fighter purchase. While for a small number of planes--only 10 at first, with another 10 to follow--this competition has broad implications for aircraft contractors in the U.S. and Europe. It also speaks eloquently about new dynamics in the fighter market. RENEWED HIGH-END DEMAND?