If the old saying “you get what you pay for” is to be believed, then Boeing may have gotten just that. Yesterday, reports came out that Boeing has been relying on temporary workers to develop and test software. Those workers, often from countries without significant aerospace background, were making as little as $9 an hour. The outsourcing of work to overseas firms has reportedly led to frustrating miscommunications, an increase in supervision costs, and delays.
Extensive reporting by Bloomberg found that overseas contract engineers have had various levels of involvement in the development of the 737 MAX. Connections include:
- Engineers from Indian HCL Technologies developing and testing the Max’s flight-display software.
- Employees from another Indian company, Cyient Ltd., having a part in handling software for flight-test equipment.
However, Boeing says it did not rely on engineers from HCL nor Cyient for MCAS. MCAS is the Maneuvering Characteristics Augmentation System and it has been linked to the October 2018 Lion Air crash and the March 2019 Ethiopian Airlines disaster.
It should be made absolutely clear that there is nothing inherently wrong with outsourcing work. Sometimes this can be an advantage if a particular firm has decades of expertise on a specific type of project. Furthermore, an external firm may just be better at attracting high calibre candidates. A narrower focus may also lead to a very high standard of training for its employees on the topic.
However, outsourcing of work by Boeing has led to a few problems:
- While HCL was often designing to Boeing specifications, a former engineer said that it was “controversial because it was far less efficient than Boeing engineers just writing the code [and] it took many rounds going back and forth because the code was not done correctly.”
- In 2008, one staffer on the 787 project complained about sending drawings back to a team in Russia 18 times. Apparently it took numerous times for them to understand that the smoke detectors must be connected to the electrical system.
- The 787 made its entry into service three years late and billions of dollars over budget in 2011. This was partially due to confusion introduced by the outsourcing strategy.
“We did have our challenges with the India team…They met the requirements, per se, but you could do it better.” – Charles LoveJoy, former Boeing flight-test instrumentation design engineerAdvertisement
Rushed jobs, and cut corners
Driving down the cost of production seems to be a major factor in many of Boeing’s decisions. With a favorable exchange rate for Boeing, a big part of the attraction for overseas outsourcing was price. Many engineers in India cost $9 or $10 per hour, compared with $35 to $40 for their US counterparts.
But Vance Hilderman, co-founder of TekSci, tells clients the cheaper hourly wage inflates to more like $80 an hour, due to extra supervision required. TekSci is a supplier of aerospace contract engineers, but has lost work to overseas competitors in the past. However, Hilderman says his firm has been winning back some business to fix the mistakes of those same overseas competitors.
Additionally, engineers that worked on the MAX project were complaining about pressure from managers to limit changes that would introduce extra time or cost.
“Boeing was doing all kinds of things, everything you can imagine, to reduce cost, including moving work from Puget Sound, because we’d become very expensive here,” – Rick Ludtke, former Boeing flight controls engineer (laid off in 2017)
The hunt for lower costs also went hand in hand with more orders. The Bloomberg article goes on to say that in exchange for Boeing investing $1.7 billion in Indian companies (such as HCL and Cyient) it landed an $11 billion order in 2005 from Air India.
According to the Sydney Morning Herald, a Boeing spokesman addressed the controversy by saying:
“Boeing has many decades of experience working with supplier/partners around the world. […] Our primary focus is on always ensuring that our products and services are safe, of the highest quality and comply with all applicable regulations.”
What do you think? Did Boeing make a mistake by outsourcing vital tasks to overseas workers? Let us know your opinion in the comments.