Boeing Co. and India's Tata Industries Ltd.
unveiled plans Thursday for a joint venture to manufacture $500 million worth of defense and military-related components in the subcontinent. The plan is to leverage Tata's manufacturing capabilities and to find new supply sources in India. Conglomerate Tata is building capabilities in defense and aerospace, its chairman, Ratan Tata, said in a statement.
The deal comes in the context of Boeing's overall strategy of parceling out work on key projects around the world. In the case of the next-generation 787 commercial jet, the Dreamliner, the strategy has hit some bumps. The company blamed the 787's latest delay on issues with suppliers falling behind in key components of work outsourced to them, according to a Wall Street Journal item Jan. 17. It was the third delay for the 787. Boeing also pushed Dreamliner's flight plan back three months, saying its maiden voyage wouldn't happen before the end of the second quarter and its first deliveries won't happen until 2009.
Upon Dreamliner's unveiling to workers and analysts in July, The Deal's Lou Whiteman noted some of the risks Boeing was taking with the outsourcing model, which entails assembling sections in Europe, Asia and across the U.S. and planes finally assembled in Seattle. "Boeing, in proving that the manufacture of a sophisticated aircraft can be outsourced, has opened itself to competition from anyone who has smart engineers and designers even if they lack assembly facilities," Whiteman observed.
The Tata JV, which will work on parts for military aircraft, should be established by June and is expected to begin work shortly thereafter. -- Carolyn Murphy
See Boeing press release
See WSJ item Jan. 17
See Dealscape item on Boeing's long-term worries
See earlier Dealscape item on Dreamliner delays
Join Corporate Dealmaker's LinkedIn forum
Juergen Lasowski
And the winners are...
