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Boeing Signs $1B Outsourcing Agreement With India
AHN ^ | December 21, 2007 | Mayur Pahilajani

Posted on 12/22/2007 10:48:10 PM PST by nwrep

New York, NY (AHN) - The Boeing Company announced on Thursday that it has signed a $1 billion agreement with Hindustan Aeronautics Limited (HAL) of India as a part of manufacturing outsourcing contract.

According to the 10-year pact, HAL will manufacture sub-systems of Boeing's fighter planes including F-18 Super Hornets and Apache Helicopters.

Initially, Boeing will invest around $20 million annually to increase its manufacturing unit size and complexity along with business opportunities in the sub-continent.

The Memorandum of Understanding (MOU) was signed between Jim Albaugh, President of Boeing Integrated Defense System and Chairman Ashok K Baweja, the Indian defense Public Sector Undertaking of HAL.

The Chicago-based Boeing said in a statement on Thursday that it will provide Bangalore-based HAL with its technology to develop manufacturing processes for the production of the sub-systems or hardware for Boeing.

"The agreement represents an important step in our efforts to build solid long-term partnerships in India to make Boeing products more globally competitive, while allowing HAL to grow and expand its potential market around the world," Jim Albaugh said in a statement.

HAL has 18 production units and nine research and design centers in India with 32,000 staff members.


TOPICS: Business/Economy; Extended News; Government; News/Current Events
KEYWORDS: aerospace; bangalore; boeing; india; outsourcing
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To: randog
Unfortunately, our new Indian VP saw it otherwise.

Unfortunately, executive idiocy is rampant everywhere.

But factoring in the re-work the Americans had to do for the shoddy Indian work, we found it was cheaper to have "spoiled Americans" doing the work.

Doesn't sound like the Americans at your place were spoiled Americans, if they were able to compete--you see, that's exactly my point. It sounds like management goofed there....just like those employers who think they are saving so much by using slow computers or offshored tech support but don't consider the lost time for their highly paid professionals.

One of my clients had a reverse problem, though. They have fought to keep operations American, despite a long downward slide as German and other companies have taken away their dominance. At one point, they had to send some production over to China because American plants couldn't keep up with demand or something (sorry, don't recall details). They found that their return rate on products plummeted, as there were fewer defects from the Chinese-made products than there were from their American plants.

Now, what should the company do? Pay more for shoddy manufacturing, or go overseas?

41 posted on 12/23/2007 9:03:16 AM PST by Gondring (I'll give up my right to die when hell freezes over my dead body!)
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To: Psycho_Bunny

It is not uncommon for such arms sales deals to include provisions for manufacturing some portion of arms in the destination country. There is nothing funny about it. Arms sales from USSR to India, for example, in the 1980s routinely included such arrangements.


42 posted on 12/23/2007 9:40:24 AM PST by nwrep
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To: CarrotAndStick
It's because India (and for the nonce, China) are engaged in mercantilism; coupled with the elites' belief that "the time of the West is past".

The Western companies look to the Orient and see vast new markets for their products; the governments in the East insist on being given the latest technology and trade secrets for pennies on the dollar as a "condition" of opening up their markets; and in the future, after the intellectual knowledge has been taken, the factories and other offshore assets will be either nationalized or undercut by copy-cat competitors.

The fallacy of course is that the societies of China and India have never been historically favorably to a large, enduring middle class, which is the target market of the large corporations. The question is whether the sudden influx of Western wealth will continue to be absorbed by a small coterie of robber barons, or enough of the wealth will spill over to create middle classes, or whether the increasing chasm between the haves and have-nots will lead to a second wave of Marxist revolutions: and resultant Communist countries having both a marked population advantage *and* technological parity, and economic superiority (for the time being) with an aging West.

The achilles heel of China will be its environmental disasters and the one-child policy; the achilles heel of India will be its abysmal bureacracy and fourth-world infrastructure (the roads don't suck, they Lewinsky.)

(The problems of the West are well-known on FR, and need not be described in detail here.)

And the Western CEO's who were behind it all with either be retired, or come crying to the US government for help.

I applaud India for the organic growth, as in Mittal Steel and Tata Motors, for example. But the outsourcing of key components of the US defence industry should be punishable as treason.

As one humorist put it, the entire history of the human race can be summarized by the following two questions:

1. What could possibly go wrong?!

followed shortly by... Cheers!

...oh, and Merry Christmas.

43 posted on 12/23/2007 10:07:34 AM PST by grey_whiskers (The opinions are solely those of the author and are subject to change without notice.)
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To: Gondring
Tell you what....you first.

You voluntarily start working for a dime a day, bud.

Just to "compete".

Better yet, you move to India and do it there. After all, shouldn't labor be mobile just like capital?

See ya in Mumbai. PS, they don't have affirmative action for palefaces there, and dysentery treatment is still far more expensive than the average wage.

You first, Chester.

44 posted on 12/23/2007 10:13:15 AM PST by Regulator
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To: grey_whiskers

Merey Christmas to you too!

As for the robber-barrons, the wealth is spilling over, too.


45 posted on 12/23/2007 10:15:25 AM PST by CarrotAndStick (The articles posted by me needn't necessarily reflect my opinion.)
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To: verity
Loyalties are to the investors.

Photobucket

Like the CEO of United Health who tried to award himself $1 billion in stock options?

Like the ousted head of the Wall Street firm who wrote off $8 billion due to subprime-backed securities, who got to walk off with a bonus of $160 million (more than most surgeons will make in their lifetime of productive service?

I'd get fired for costing my company $50,000...

Cheers!

...oh, and Merry Christmas.

46 posted on 12/23/2007 10:15:32 AM PST by grey_whiskers (The opinions are solely those of the author and are subject to change without notice.)
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To: antiRepublicrat
Please remind me...was it cyanide (CN-, triple bond) or methyl isocyanate (H3C-N=C=O)?

Cheers!

...oh, and Merry Christmas.

47 posted on 12/23/2007 10:18:01 AM PST by grey_whiskers (The opinions are solely those of the author and are subject to change without notice.)
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To: grey_whiskers

Oops, make that ‘meRRy’!


48 posted on 12/23/2007 10:18:14 AM PST by CarrotAndStick (The articles posted by me needn't necessarily reflect my opinion.)
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To: grey_whiskers
Actually, the two questions are:

1) What could possibly go wrong?

followed shortly by

2) But how was I supposed to know?

Cheers!

49 posted on 12/23/2007 10:20:13 AM PST by grey_whiskers (The opinions are solely those of the author and are subject to change without notice.)
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To: Regulator

No thanks! I chose to make myself valuable in the USA, more valuable than can be had by offshoring.

What path are you taking? Trying to play King Canute? Voo-Doo?


50 posted on 12/23/2007 10:23:35 AM PST by Gondring (I'll give up my right to die when hell freezes over my dead body!)
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To: SatinDoll
"India does not have the same kind of value system we have in the U.S.... Americans are seen as having deep pockets. How foolish, to move business there."

Wait a minute... are you actually suggesting that, in contrast to the rest of the world, Americans are not overlawyered bottom-feeders quick to sue to cash in on the slightest corporate misdeed? Senator Edwards, we're flattered by your presence, but should you really be wasting time posting here when you've got campaigning to do in Iowa?

51 posted on 12/23/2007 10:28:59 AM PST by Fabozz
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To: nwrep

I wasn’t laughing at the arrangement but rather, at the insistance that I accept it as “normal”.


52 posted on 12/23/2007 10:36:25 AM PST by Psycho_Bunny (Islam is the E-Ticket ride at Nutsberry Farm)
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To: Psycho_Bunny

ok, got it. Sorry I misunderstood.


53 posted on 12/23/2007 10:40:32 AM PST by nwrep
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To: nwrep

I know outsourcing is a bad word around here, but we want to tie the Indians to ourselves as closely as possible. They are going to be an industrial and military powerhouse that will eventually eclipse the Chinese, IMHO. We want to have them on our side.

We drove them into the waiting arms of the Soviets over nuclear reactors back in the 70s. We don’t want to do that again.


54 posted on 12/23/2007 10:43:02 AM PST by gridlock ("I'd gladly pay you Tuesday for a hamburger today" -- J. Wellington Wimpy)
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To: grey_whiskers
Please remind me...was it cyanide (CN-, triple bond) or methyl isocyanate (H3C-N=C=O)?

Can't remember, just that it was a hazardous cyano compound ("cyanide" probably wasn't right). Looking up... yep, methyl isocyanate.

Wow, I just found something out. They turned off the alarm siren so as not to worry people, thus people woke up later in a cloud of the stuff.

55 posted on 12/23/2007 10:43:42 AM PST by antiRepublicrat
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To: Psycho_Bunny; nwrep

Actually,that’s what most nations consider it to be.If you want to sell arms to a nation with money to burn,you’ve got to be flexible.Samsung is assembling GE’s engines for the F-15 fighters that South Korea recently purchased,while US companies will provide technical assistance in developing South Korea’s 5th Gen. aircraft.The number of disputes that the US is having with the likes of Norway,Great Britain,Israel etc over the Joint Strike fighter also involves related issues of workshare & technology transfer.


56 posted on 12/23/2007 10:47:10 AM PST by sukhoi-30mki
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To: SatinDoll; sukhoi-30mki; Atlantic Bridge; ByteMercenary

There was enough blame to go around at Bhopal.

The design of the plant was not faulty. It was a carbon copy of the plant in West Virginia that is still operating, if I am not mistaken. The problem was Union Carbide thought they could just drop a working design into India and expect it to work.

One of the things that made sense to the American operators but did not to the Indian operators was the concept of redundant safties. As various safety systems failed in Bhopal, the operators were lax on making repairs. Union Carbide failed to realize this or correct the problem. The assumptions in the US design was that failures would be corrected promptly, so plant operation could continue while one or two of the redundant systems were off-line.

This turned out to be an incorrect assumption. The fault lies on both sides because the Indian operators did not buy into the American program of preventive maintenance and maintaining all systems in functional status, and the Americans did not monitor the plant closely enough or put into place programs that would have suspended operation of the plant when things got too dangerous.


57 posted on 12/23/2007 10:54:45 AM PST by gridlock ("I'd gladly pay you Tuesday for a hamburger today" -- J. Wellington Wimpy)
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To: grey_whiskers

It was methyl isocyanate.


58 posted on 12/23/2007 10:55:43 AM PST by gridlock ("I'd gladly pay you Tuesday for a hamburger today" -- J. Wellington Wimpy)
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To: nwrep

Mistake, plain and simple.

India only knows quantity-

They don’t get the concept of QUALITY


59 posted on 12/23/2007 10:59:08 AM PST by ridesthemiles
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To: calvo
Yeah, it will be great when you and your kids and grandkids are working for 33 cents an hour. Won’t that be wonderful?

Typical Freeper response: Well, if they can't get a job, they can just start a million dollar business from scratch! Working for yourself if the best thing ever!

60 posted on 12/23/2007 11:01:06 AM PST by IDontLikeToPayTaxes
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