At a basic level, Engineering can be considered a “service” and thus readily outsourced to the low bidder. However, in our business of designing and manufacturing jet engines, we deal with complex products that also include a public commitment regarding significant safety and reliability expectations. And since our business is highly competitive, advantage accrues to those companies that can design and produce better jet engines faster; doing this with a reasonable return on investment satisfies the business equation.

Within this context, Engineering assumes a strategic business role of identifying, developing, and qualifying new technologies that enable continued advancement in jet engine performance and reliability that can be produced and supported economically. In order to do this, there is a large body of core technical competencies that must be maintained within the company so that new engine designs, and improvements over current designs, can be readily accomplished in response to market demand. Another strategic role of Engineering involves continued improvement in design methods and tools so that new technology can be introduced with high confidence.

Therefore, outsourcing of engineering work is not done for the short-term benefit of lower cost. Outsourcing must fit within the strategic framework for Engineering--this applies to domestic as well as global outsourcing. And there are instances when outsourcing is more expensive, but still offers an advantage, such as providing a means to even out the peaks in internal Engineering work. Furthermore, we recognize that we cannot afford to maintain world-class expertise in every technology area used in the turbine engine; and consequently we are willing to team with strategic partners who are expert in those areas that we set outside of our core competencies. This presents the opportunity to leverage another organization’s world-class expertise, as well as to accelerate further technology development.