[weswilson]

There was an internal whitepaper written by a Boeing engineer back in 2001 that warns against the dangers of excessive outsourcing.

https://www.documentcloud.org/documents/69746-hart-smith-on-...

It reads like a plea to not turn into McDonnell Douglas (this was only a few years after the MD and Boeing merger), which we all know it essentially has. The last couple of sentences fire shots at Douglas Aircraft directly:

"The fate of the former Douglas Aircraft Company, which was reduced to a systems integrator in the early 1970s by excessive outsourcing of DC-10 production, is a clear indicator of what will happen to other companies which fail to sustain the conditions under which it is possible to launch new products. It is hoped that this sacrifice can save the new and expanded Boeing from a similar fate."

[nickff]

The trouble is that government contracts always strongly incentivize ‘excessive outsourcing’, and Boeing’s absorption of MD increased the dependence on government contracts, though Boeing was already on that road (especially after taking on Rockwell). Government oversight (almost) always discourages large profit margins, which makes increasing low-risk costs very appealing. In addition to that, there are strong political incentives for ‘distributing’ contracts widely, with the Space Shuttle being a famous example of this, having parts made or assembled in 48 different states.

[Rhinobird]

>In addition to that, there are strong political incentives for ‘distributing’ contracts widely,

Government/Defense contractors can track their suppliers and tell Congress exactly how many jobs are in which districts per project.