Boeing 787 Dreamliner = Globalization

Interesting graphic below illustrating the outsourcing of Boeing’s 787 Dreamliner as President Trump touted his “buy American” mantra today as he stood in front of the airplane at the Boeing’s South Carolina plant.

trump-at-boeing

“We want products made by our workers in our factories stamped with those four magnificent words — made in the USA,” Trump said. – CNBC

Assembly is just a small part of the Dreamliner’s  manufacturing value chain.   The International Monetary Fund (IMF) noted in a recent working paper,

More than 70 percent of the plane’s value is not generated by Boeing.  – IMF
.
The Post and Courier wrote yesterday the jetliner is
.
…comprised of more than 2.3 million parts made around the world
.
A few years back we were surprised that assembly of the iPhone 4 at Foxconn in China was only a small fraction of the $185 cost to make the phone.
.
  • The average sale price of Apple’s iPhone 4 is $560. Of that, $7 covers the cost of manufacturing, $178 goes to components, $7 is taken by Foxconn, and Apple walks away with the rest, or $368.
  • As Nokia and RIM’s share of the global smartphone market shrunk between the second quarter of 2010 and the second quarter of 2011, that of Apple grew by more than six percent. Samsung’s share also grew over that period.
  • Samsung contributes the flash memory, DRAM memory, and applications processors for Apple’s iPhone 4. Those three components cost about $45.68 per unit.
  • Other components of the iPhone 4 and their cost: Battery, $6; accessories, $5.67; mechanicals and electro-mechanicals, $19.97; audio, $0.98; touchscreen control, $0.90; display and touchscreen, $38.50; power management, $1.51; bluetooth and Wi-Fi, $8.  – Global Macro Monitor

So,  we ask you, folks,  do you think the President realizes that his trade policies if implemented could actually end up losing jobs at the very manufacturing plant that he touted “buy American” today?   More, important, do you think voters understand this?

It is because of free trade that a Boeing plant exists in South Carolina today.  Free trade, fair trade, whatever.

The world is becoming increasingly complex and it is going to take strong leadership to guide us through the rough waters ahead without the global economy fully imploding, which will almost certainly morph into a world war.

boeing_787_feb17

 

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