Boeing Oligopoly

“Sweeping around the Earth in a fixed orbit, like a second Moon, this man-made island in the heavens… could be the greatest force for peace ever devised or one of the most terrible weapons of war,” said Werner von Braun (Collier's 23). The aerospace industry is an indicator of a country’s technological position; evidenced by the space race during the cold war. The United States, regarded as one of the most powerful countries in the world, is at the forefront of the aerospace industry. This position comes from years of experience from early aeronautical industry manufacturers such as Boeing Airplane Co., Douglas Aircraft Co., McDonnell Aircraft Corp., and North American Aviation. Years of collaboration and mergers between the aforementioned

Each firm is in competition but they remain interdependent and each has some market power. Boeing is a private enterprise. It purveys both goods and services. The product itself is a private good in the case of most of their products. Boeing identifies itself as the largest company in the aerospace industry and a vital part of the arms industry. The number of global enterprises in the aerospace and arms industry is large and exceeds a hundred. Boeing leads four other US-based companies as the top aerospace company in revenue generated globally (Best). Boeing falls second after Lockheed Martin in revenue from defense (Defense News). According to the Aerospace Industries Association, the aerospace and defense industry generated $307 billion in value-added goods and services, which accounted for 1.8 percent of the nation’s GDP between 2013 and 2015 (O'Neil, Levesque and Genanyan 23). The U.S aerospace and arms industry generated $872 billion in sales in 2016 (Aerospace Industries Association

The company is organized into three units: Commercial Airplanes, the unit that helped transform the face of civil aviation, produced almost half of the world’s commercial fleet, and produced a big freight fleet that carries 90 percent of the world freight; Defense, Space, and Security, the unit that produced the famous KC-46 aerial refueling aircraft, the AH-64 Apache helicopter, and the Boeing 702 family of satellites; and the newly found Boeing Global Services which provides aftermarket services for its customers. Boeing’s products are complex and consist of tens of thousands of different parts that are moved in a complex logistics system that includes the Boeing Dreamlifter, an extensively modified 747-400 that is used to transport aircraft components (Volpicelli). Boeing collaborates with more than 13,600 suppliers across the United States. In 2016, Boeing paid nearly $45 billion to its suppliers. Assembly for most commercial airplanes happens in the Everett production facility in Washington, the largest