This blog contains posts and comments written by students in Dr. Tufte's economics classes at Southern Utah University.
2/23/2005
Boeing Losing Some Weight
Boeing sold two its commercial aircraft plants in Wichita, Kansas and another facility in Oklahoma today. This move was made in order to focus its energy on design and final assembly. That is a huge step for America's largest aircraft producer. This breaks down to very simple economics- managing scarce resources. Boeing must believe that their managerial talent and time is scarce and would be more beneficial if it were focused on fewer objectives. Are there other economic reasons that Boeing would make such a huge business change?
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2 comments:
I think a major factor could be the way the airline industry has changed the last few years. There are so many low cost leaders out there with Jetblue, Song, and Ryanair, who provide comfortable and affordable alternatives to other airlines. I may be incorrect, but I believe Boeing does more of its business with those airlines who are struggling to keep afloat, such as American and United. Maybe Boeing is just rethinking how it can remain relevant.
This is all about competition. Boeing has traditionally sold big planes to big carriers. They are losing that market to Airbus (perhaps due to subsidization of Airbus).
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