The Phaserl


When Flight Safety Gets Outsourced To China

by Wolf Richter, Testosterone

Aircraft maintenance was a highly paid blue-collar job that required education, training, manual skills, and brains. It was one of the perfect American middle-class jobs with generous healthcare, retirement, and vacation benefits; and free flights! They were working for icons like Delta, American Airlines, Continental, TWA, or Pan Am. Icons indeed!

After endless rounds of Wall Street engineering and tough competition, they all went bankrupt, some of them twice. High wages and generous fringe benefits of maintenance mechanics got whittled down. Then the actual jobs, these well-paid blue-collar specialty jobs that required a lot of training and brains, the bedrock of the American middle class, were outsourced to cheap countries, including China.

Specifically to one company. It started in 1997 when Boeing announced that it would acquire for $11 million a 9.1% stake in an outfit that had opened for business the year before: Taikoo Aircraft Engineering Co. (TAECO), based at Gaoqi International Airport in Xiamen, China. Its largest shareholder is Hong Kong Aircraft Engineering Co. (HAECO); among the other shareholders are Cathay Pacific and Japan Airlines. TAECO does “heavy maintenance” on aircraft, a labor-intensive job that takes around four weeks per plane – if you have enough mechanics. And cheap labor makes a huge difference for Boeing and its airline customers.

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