31–40 of 64 posts
The interesting part of the deal is the parts spun off to Airbus. There are some minor components manufactured for Airbus jets, and then there's the A220 (formerly C-series), which as a designed by Bombardier plane, had production in the former Bombardier factories that were sold to Spirit. Most notably, the wings. Airbus only needs the part of Spirit that relate to them, but Spirit's factories are not organised like…
Spirit went public in 2006 at $26.00 per share, implying a $3.8bn market cap [1]. That’s about $40.50 ($5.9bn) today [2]. This deal is at $37.25 per share, implying a $4.7bn market cap and $8.3bn enterprise value [3]. Spirit’s shareholders got hosed; value was transferred to its lenders. [1] https://www.seattletimes.com/business/spirit-aerosystems-gai... [2] https://www.usinflationcalculator.com/ [3] https://www.ft.c…
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> Outsourcing is lame, and unwinding outsourcing can cost you money Apple (TSMC, Samsung), ARM (all fab), Microsoft (hardware) and NVIDIA (TSMC) each outsource critical parts of their value chains. The opposite of over-outsourcing is NBH syndrome.
Yes, but Apple has a habit of also shafting its outsources, like what they did to the UK designers back in the ipod era: as soon as chip design could make them more money they disintermediated. And now deal direct with the foundry. ARM holdings annoys me. I wish they hadn't stopped doing fab. The potential weakness for the West dependency on TSMC worries me.
Spirit went public in 2006 at $26.00 per share, implying a $3.8bn market cap [1]. That’s about $40.50 ($5.9bn) today [2]. This deal is at $37.25 per share, implying a $4.7bn market cap and $8.3bn enterprise value [3]. Spirit’s shareholders got hosed; value was transferred to its lenders. [1] https://www.seattletimes.com/business/spirit-aerosystems-gai... [2] https://www.usinflationcalculator.com/ [3] https://www.ft.c…
If you're gonna invest in an aircraft builder that sometimes forgets to put the bolts in, I think only losing 8% is a pretty good deal.
Outsourcing is lame, and unwinding outsourcing can cost you money to settle issues with other companies which depend on that outsource agent and have regulatory and competition concerns you have to respect. Paying Airbus to take their bit of this, is .. well it's strange but then I guess not. Boeing being Boeing, somebody got a massive KPI for making this outsource happen, then somebody else will get a massive KPI fo…
>Outsourcing is lame You can not make a modern airplane without significant outsourcing.
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> potential weakness for the West dependency on TSMC worries me TSMC, in turn, outsources the entire front end of its value chain to its customers. There is nothing wrong with outsourcing. Boeing is just bad at supply chain management.
I think all your other examples are healthier because each step has multiple customers. The Boeing/Spirit arrangement looks more like an accounting gimmick than actual outsourcing.
Outsourcing is lame, and unwinding outsourcing can cost you money to settle issues with other companies which depend on that outsource agent and have regulatory and competition concerns you have to respect. Paying Airbus to take their bit of this, is .. well it's strange but then I guess not. Boeing being Boeing, somebody got a massive KPI for making this outsource happen, then somebody else will get a massive KPI fo…
>Outsourcing is lame You can not make a modern airplane without significant outsourcing.
Neither are airplane manufacturers, but they represent companies on either side of the complex machine spectrum compared to airplanes.
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Yes, but Apple has a habit of also shafting its outsources, like what they did to the UK designers back in the ipod era: as soon as chip design could make them more money they disintermediated. And now deal direct with the foundry. ARM holdings annoys me. I wish they hadn't stopped doing fab. The potential weakness for the West dependency on TSMC worries me.
Did you confuse ARM Holdings with AMD/GlobalFoundries?
No. ARM is fabless. That was an outsourcing innovation not too long ago.
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Did you confuse ARM Holdings with AMD/GlobalFoundries?
> Did you confuse ARM Holdings with AMD/GlobalFoundries? No. ARM is fabless. That was an outsourcing innovation not too long ago.
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This is Spirit’s current CEO [1]: > Patrick Michael Shanahan (…) is a former United States federal government official who served as the acting United States Secretary of Defense in 2019. which is to say that these are companies that are, in essence, controlled by the US Government when it comes to their strategic future, so in cases like this one here the money involved is of secondary importance. [1] https://en.wik…
> which is to say that these are companies that are, in essence, controlled by the US Government Shanahan was in government for two years under a different administration, after 31 years at Boeing, and then returned to the private sector at the helm of a publicly-traded company. Nothing about this screams “controlled by the U.S. government.”