Analyst warns: Boeing squeeze on suppliers could be ‘self-inflicted wound’

Aerospace analyst Richard Aboulafia is referring to Boeing’s “Partnering for Success” program. The company has been touting the program as a partnership with suppliers intended to make both the company and its aerospace suppliers competitive and profitable, but some suppliers consider it an unfair invasion.

Aboulafia, a senior aerospace analyst for the Teal Group outside Washington, D.C., in his March briefing message said he thinks Partnering for Success may prove to be a “serious self-inflicted wound” for Boeing Co. (NYSE: BA). In his analysis, he points to Boeing’s tactic of taking companies off the list of potential suppliers if they don’t meet Partnering for Success (PFS) standards, a practice that Boeing CEO Jim McNerney has called a “no-fly list.”

“Since the Orwellian-sounding PFS began last year, I don’t think I’ve met a supplier who wasn’t either angry about, or scared by this initiative,” Aboulafia wrote. He added that the tactic is removing from consideration some seasoned suppliers such as UTC Aerospace Systems, which builds the landing gear for the current 777 but will be replaced for the 777X.  Aboulafia  made similar points in his annual presentation  during the Pacific Northwest Aerospace Alliance annual convention in February, before an audience of somber local and international suppliers.