Flying Blind: The 737 MAX Tragedy and the Fall of Boeing

by Peter Robison

a senior technical fellow at Boeing’s Phantom Works unit in Southern California presented it at the leadership center. John Hart-Smith, then sixty, called the paper “Out-Sourced Profits—the Cornerstone of Successful Subcontracting.” In fifteen densely worded pages, he laid out from his own experience at Douglas Aircraft how parceling out construction of the DC-10 had impoverished the company while enriching its suppliers. The basic point was that outsourcing is never simple. Design specifications actually had to be more precise, because any omissions would lead to costly disputes involving lawyers. Making sure the work got done right led to additional overhead costs that no one had counted on. Finally, all those extra costs had the perverse effect of making the company doing the outsourcing look less efficient than the ones it awarded business to—a vicious cycle that only encouraged more of the same destructive behavior.