Every successful business has discovered one secret key which has remained its pivot for sustenance come rain, come shine. Business enterprises like Ford Motor Company, McDonald’s, Cessna, General Electric, and Pratt & Whitney have simply stuck to a singular trade since their establishment. This specialized consistency has made them outlast their peers who chose to diversify at one point or the other. Could this secret possibly be one of the reasons why Boeing does not make engines?
The Boeing Company does not make aircraft engines because it has chosen to specialize and focus on manufacturing aircraft frames where it has carved a niche for itself! There is also an operational law in the United States known as the “anti-trust” regulation that is binding on all aviation companies in the country that prohibits the manufacture of aircraft frames and aircraft engines by a singular company.
Besides, the aviation business is highly complex, such that taking up the production of aircraft – a very sophisticated and capital intensive industry with airframe production may only prove counterproductive for Boeing.
Grab a cup of coffee and let us go on a brief, yet interesting journey to see the reasons why Boeing after almost a century of its existence does not make aircraft engines.
Table of Contents
Why Boeing Does Not Make Engines
Boeing is not into the manufacture of aircraft engines for the following reasons:
Anti-Trust Regulation
In the early 1900s when aviation was the new kid around the block, the US was making frantic efforts to break up “trusts” so much that Teddy Roosevelt and others were being called “trustbusters”. By 1916, William Boeing created an aircraft company. Some years later, Frederick Rentschler created an engine company as part of the Pratt & Whitney Machine Tool Company (P&WMT).
Later on, Rentschler separated the Pratt & Whitney (P&W) engine company from P&WMT. In 1925, Rentschler and Boeing merged the independent P&W engines into the Boeing Aircraft Company to form the United Aircraft and Transport Corporation (UATC). UATC went ahead to buy several other aircraft companies, propeller manufacturers, and other airlines. So, this big corporation manufactured engines, made aircraft frames for the engines, carried freight, transported passengers through its airline service, and also operated the US mail service.
Some government authorities started to grow suspicious of Boeing growing into a monopoly for fear they could later become a thorn in the flesh of the government. They could possibly blackmail governments and customers. So the government would not permit private businesses to grow too much to avoid political and economic imbalance.
Furthermore, conspiracies between airlines in the “Air Mail Scandal“ of 1934 led the US Government to establish an anti-trust regulation forbidding aircraft or engine makers from operating airline service and aircraft manufacturers from manufacturing engines. This forced UATC to split into what later became United Aircraft Corporation and today known as the United Technologies, Boeing, and the United Airlines Company used for commercial air transport.
Boeing subsequently started a Turbine Division with the plans of providing turbines for APUs and helicopters. Unfortunately, this initiative was closed down around the time of the great Boeing layoff in 1970 as the Turbine Division did not yield viable profit despite the fact that it produced technically competitive products. Boeing stated the antitrust situation as part of the reasons it shut down the Division.
The personnel from the defunct Turbine Division became the core of Boeing’s propulsion division saddled with the responsibility of analyzing engine designs and fabrications. This further led Boeing into building nacelles and inlets and re-evaluating engines from the manufacturers.
These corporations still exist today, though with different names and capacities. United Airlines remains the same United in operation today. Some of the propeller companies such as Hamilton Standard, and Pratt & Whitney, an engine company, are still owned and operated by United Technologies. The Boeing Company today stands tall through the storm, by forming business alliances and prudently dissolving into subsidiaries. This way, it remains one of the two outstanding producers of large transport aircraft.
It Makes No Business Sense
Asides the anti-trust history, Boeing would probably not consider manufacturing engines today because there is really no point re-inventing an effectively functional wheel. The top engine manufacturers are doing an amazing job, so there is no point for Boeing to decide to join them. It is almost a rule of thumb today, unlike an earlier era for airliners to purchase engines from the various manufacturers based on their design demands.
Since the advent of the jet engine, only Bristol Siddeley, Rolls Royce, Pratt and Whitney, and General Electric have successfully grasped and mastered the technology for very large turbofans. They were the companies that received from the British Government about seventy-five years ago, the prototype of Sir Frank Whittle’s engine. To show how tough the engine industry is, Bristol Siddeley after a while, could not step up despite recording some streak of success and eventually merged with Rolls Royce. There is hardly anything that can beat specialization and advanced technology that has evolved over several decades.
Costs
For Boeing to venture into aircraft engine production, it would have to compete with existing engine companies like Pratt & Whitney, Rolls Royce, General Electric and so on who have spent billions of dollars in the research, manufacturing, and development of jet engines for close to a century or more now. Boeing would waste vast resources and may simply never catch up!
Moreover, Boeing cannot feasibly make enough profits to cover the expenses incurred in establishing the engine manufacturing company because they would be the only company using the engines for their aircraft. The cost implication of starting from ground level to develop a competitive engine that would rival exceptional and seasoned competition is simply a mountain that is near impossible to scale.
Certification Issues
Then there is the certification issue with all of its complexities that Boeing would have to deal with. Certification is very crucial in the aviation industry and requires a lot of time – years which Boeing cannot afford in a fast-moving industry like aviation where time is money.
There also lies the problem of split focus that an aircraft manufacturer will face by trying to also manufacture engines. It is hard enough to be in the airframe-making business, making engines too would only terribly worsen the difficulty of staying in business. Making modern turbine engines is hard, to put it in a mild way. It requires the use of specialized knowledge, tools, and materials, plus experienced expertise which Boeing apparently does not possess at the moment.
If the aircraft engine manufacturing industry was that easy, it should be flooded with different competitive companies by now. There are only a small number of companies in the world that can deliver powerful and efficient jet engines. In the entire world, we have just the big four: Pratt & Whitney, General Electric, Rolls Royce, and CFM International.
In summary, venturing into the engine business would raise business risks to a point beyond what the Boeing shareholders can accept. Needless to say, the Boeing franchise would collapse if major shareholders withdraw their stakes.
However, if Boeing cannot start their own engine company for fear of measuring up to the standard of existing companies, why can’t they just buy one of the existing ones?
Why Can’t Boeing Just Buy an Existing Engine Manufacturer?
There are certain limitations that Boeing would face if they consider the option of buying an existing engine company. Some of these challenges include:
International Pride
The problem would be that Boeing would be strictly restricted to very few markets in Europe if they decide to buy one of the engine companies. For instance, if Boeing buys Rolls Royce or General Electric, their sales in France would crash. The aviation business is complicated, such that including the airframe/engine mix is equivalent to swimming in deep political and economic waters.
Undue and Unhealthy Competition
The four major aircraft engine companies are constantly trying to outshine each other. It would be an instant dead loss for Boeing to try to enter into such fierce competition. Boeing could potentially face hostilities from rival companies, customers, and regulators. Rival airliners could also form alliances with suppliers to crush Boeing. There is nothing more frustrating than a leading competitor like Boeing becoming an underdog.
Finally, fundamental economic lessons warn against the investment of huge capital in a large business venture that is impacted by the same fluctuating market dynamics that affect the base business. Both businesses would suffer great losses in the eventuality of any misfortune.
The Boeing Engine Makers
Nowadays, most engine manufacturers present two or three variations of engines from which aircraft companies choose to satisfy the unique requirements for each aircraft model family. Engine makers face challenging demands for reliability, efficient engine performance, and power production suitable for thrust to be generated. These manufacturers also strive to deliver products to meet deadlines given by their customers.
There are few major companies and some joint ventures between them in the business of manufacturing jet engines for Boeing. The “big three” companies are General Electric, Pratt & Whitney, and Rolls Royce.
General Electric
- CF6 series used in Boeing 747 and 767.
- GE90 series used in Boeing 777 with the GE90-115B model being the world’s most powerful jet engine.
- GE9X (largest jet engine ever built), so big that the entire cabin passenger of the Boeing 737 MAX could fit inside.
- GEnx series used in Boeing 787 and Boeing 747-8i
Pratt & Whitney
- JT8D series used in early Boeing 737
- JT9D series used in Boeing 747 and 767
- PW2000 series used in Boeing 757
- PW4000 series used in Boeing 747, 767 and 777
Rolls Royce
- RB200 series used in Boeing 747 and 757
- Trent 800 series used in Boeing 777
- Trent 1000 series used in Boeing 787
And the big joint venture is:
CFM International (a joint venture of General Electric and Safran Aircraft Engines) with the CFM series used in Boeing 737
Conclusion
Every successful business organization thrives by focusing primarily on its strength. The axiom “Jack of all trades, master of none” remains valid till date. Boeing’s strength as evidenced by its state-of-the-art and world-class aircraft models is in the manufacture of aircraft frames. Boeing realized long ago it was better to let customers make their choice demands, leave engine fabrication to the experts, and simply design its aircraft around the specific engine requirements.
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