The executive has 40+ years experience in aerospace with over 35 years at Aviall, Boeing-owned parts distributor, and Boeing. The executive managed supplier relationships at Aviall throughout the 1980-90's before working on insourcing strategies at Boeing Global Services.
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I don't know. I think it's stalled out in terms of the big growth strategy. When Stan Deal was in charge of it initially, they had a mission to go from $20 billion to $50 billion. There was no plan. Several senior people in the organization said that even at a high level, they still don't know the plan to get from here to there. It was a 10-year plan, we were two years into it, and we still didn't have any idea. We're going; the ship is sailing, and you might be able to get to $30 billion if you did some really smart things, but they were losing their focus. Now it's completely lost. I think there's a possibility that Boeing will declare victory and spin off some or all of Aviall, and maybe KLX, and some of those other pieces that they bought with high hopes but lost, completely forgetting why they bought them in the first place.
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Yes, but again, they were very naïve, much like how they were with GoldCare. They went to other distributors and found some that would do it, but the distributors were like, if we're going to be consigning this inventory, we have no idea how long it's going to take to sell it, so we're going to have to mark the price up by 50%. So for this hundred-dollar part, now Boeing, you'll pay $150. Boeing goes, okay. Boeing puts their margin on it and then says there's a 10% fee for management, so now the customer is paying almost 2X the price they previously paid for this VMI part.
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That was Aviall's whole sales pitch. Here's the value we bring to you, and you'll give us a cut of your margin, but we're going to take all your inventory off your hands. We'll give your customer a 95% to 98% service level, availability, and your customers will be happy. We will take the risk. If we buy too much inventory, that's on us, not you. We'll give you a long-term order book so your factories can run efficiently, you can make these things at lead time, you won't get hit with all these unexpected demands. Some manufacturers said I like it; let's do it. But Boeing didn't think about it holistically. They just said, we'll go out, and they'll give us discounts, but they didn't. The same thing happened with IMM; they thought, of course, everybody will want to participate.
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The executive has 40+ years experience in aerospace with over 35 years at Aviall, Boeing-owned parts distributor, and Boeing. The executive managed supplier relationships at Aviall throughout the 1980-90's before working on insourcing strategies at Boeing Global Services.
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