Monday, July 9, 2007

Globalization and the 787

There was an interesting article in the first section of the Saturday, July 7 issue of the Chicago Tribune. Tribune reporter Julie Johnsson wrote a good article on the roll-out of the Boeing 787 Dreamliner (fee required for article). It included an illustration of the aircraft that showed the nation of origin for many of the assemblies.

Unfortunately, the illustration doesn't come up on the Trib's web site. You can see a good illustration and chart (with a bit more detail) at the Seeking Alpha blog which follows transport stocks. The stories on this aircraft can be used in discussion trade and globalization a couple of ways.

From the production side, the variety of sources for the components is impressive. There are 17 firms in 10 nations identified with the major assemblies. One presumes that many of the smaller components or materials on each assembly come from still other sources. The assemblies are then shipped to Boeing's Everett, WA plant for final assembly.

On the "consumption" side, a truly impressive list of airlines that will be flying the 787 is listed on Boeing's 787 page (link is no longer operative). Sales of the 787, either directly to the airlines or to leasing companies supplying aircraft to the airlines, represent a significant trade flow.

That brings us to one more aspect of teaching about trade. When examining trade data with students, it is important that they pull the information apart. If students see trade data that includes aircraft, they need to recognize that the components that are assembled into the final product can have numerous origins. The firms that contributed, from design, to basic materials, to sophisticated sub-assemblies, to final components, all employed workers. Those workers brought skills to the task and were compensated for their skills. Their compensation will allow them to participate in the world-wide market place.

The world is becoming one, big market, with goods, services, and payments constantly circulating and constantly growing and generating more activity.

Posted by TSchilling at July 9, 2007 2:24 PM

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