Question one
There are several reasons, which apply economically with reference to the selling or holding of the spin-off Wichita asset (plant) by the Boeing. Some of these reasons are:
First, the problem of the possibility of suffering a severe market recession-The first idea that supports the sale of the spin off Wichita can be influenced by the possibility of making drastic losses. After the attacks that took place on 11 September 2011, there was an evidence of political influence on the performance of the firm. Numerically, there is a probability that the operations may lead to a negative figure with reference to losses. Numerically, it is rated that there could be a cumulative loss of 10 billion dollars. That is, the business may record a fall of finances.
Secondly, selling the plant would play a vital role in enhancing Boeing to be able to achieve its goals. The plant is in dire need of having new projects. These projects involve assembling of airplanes that are objective for commercial purposes as well as designing them. The company intends to do this in order to ensure that the value of work is rated higher.
Third, the sale of the plant relieves the company the load of employee retrenchment. It is an idea that the new operators may be in a position to manage the employees and wipe out their currently created environment of future collapse of the firm. Besides, the new owners may be in a position to create admirable supplies and tasks in relation to other firms.
Question two
Should Boeing sell or spin-off Wichita? List three reasons against selling Wichita.
Selling the Spin-off Wichita may also be viewed as a poor strategy of dealing with the assets. Some of the factors that discourage the disposal of the asset are:
First, the sale of the plant due to an expected recession would be unrealistic economically. The speculations may be invalid and hence the situation that the result of selling off the plant may lead to a massive retrenchment of the laborers. This is despite the fact that the new firm has the final decision with regard tithe employees to retain and those to layout.
Secondly, following the history of the previous trends of the plant after first being sold off, the problems that it faced forced it to form a merger with the company. In a sympathetic bid, the plant might be of a disadvantage to the new possessors.
Third, Selling off the plant can indicate the impatience of the company on the investment. Owing to the fact that the company sees the advantage of selling the plant in order to invest in a different development may result to unpleasant results against the expectations.
Question three
Do you agree or disagree with the Stonecipher’s strategy of only doing design and final assembly of commercial airplanes?
I disagree with the strategy to have a design and final assembly of commercial airplanes.
It is a great idea that the company makes a decision to carry out these activities domestically. There are additional costs that are engaged in the exercise. These costs may be poorly accounted for or even not at all accounted for. Besides, there could be delays in operations because of transport of parts for assembly. This in return results to delay costs.
Question four
What are the benefits for aircraft manufacturers from applying the modularization in designing and manufacturing airplanes? How would modularity change the competition and structure of the commercial aircraft manufacturing industry?
The aspect of modularization enables the firms to come up with a functional and well-installed aircraft. This means that the manufacturers enjoy additional benefits in case the product that is derived matches with the methodology applied. Because of matching the methodology and the modulation of manufacturing the aircraft, then the manufacturer derives competitive advantage.
Question five
What happened to Boeing? Did the company actually spin-off its Wichita site?
Boeing was not in a position to make sales of the plant. This was because of the differences that were portrayed by the engineers the company.
