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China's Aerospace Ambition
00:02:29
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| I was sitting in the office with the Under Secretary of Commerce for Technology, and we had representatives from Vice Senior President from Boeing, Grumman, all the major aerospace industry guys. | |
| And I sat in that room and said, China is going to eat your lunch in aerospace. | |
| They said, you're telling me a country that doesn't have indoor plumbing in 90% of the homes is going to eat our lunch in the marketplace. | |
| And I said, yes, sir, they are. | |
| They said, you're an idiot. | |
| Everybody knows by classic MBA that the barriers to entry are too large. | |
| What that means in MBA language is the amount of finances required to go into that industry is so large nobody else can do it. | |
| Because the amount of money it takes to build an aerospace industry is massive. | |
| You know, just the facilities are large, the testing and things like that. | |
| I said, they're going to do it. | |
| And we basically knew how they were doing it, which looks at a technology strategy. | |
| From a technology strategy point of view, they don't go in one day and say, okay, we're going to build an airplane. | |
| They go in and say, you know what? | |
| We're going to come up, we're going to acquire the technology. | |
| And we'll come back to the acquire. | |
| This is China. | |
| Right. | |
| And say, we're going to build the little wingtips on the wings for the next plane for Boeing. | |
| And we'll go to Boeing and say, we want to build the wingtips. | |
| And Boeing will say, do you have the technology? | |
| And usually China would say, nah, we don't have it. | |
| Could you give it to us? | |
| And they'll say, sure. | |
| You got cheap labor. | |
| We now cut our costs by 0.01%. | |
| They got the wingtips. | |
| Do a great job. | |
| They deliver it at less cost than they said they were. | |
| It's perfect. | |
| Wingtips. | |
| Boeing managers looking at going, geez, guess what? | |
| We made more money this month. | |
| I get a bonus. | |
| Can you guys do the struts? | |
| Yes, sir. | |
| Give us the technology. | |
| Here's the technology. | |
| So what they do, and actually, I put together two graphics that showed them doing this with the platforms, the entire plane, and the engines. | |
| And we showed, and we had the names of the organizations that were going in and going, this, getting that technology, doing this technology, this. | |
| So what they do is they very slowly piecemeal it together. | |
| Well, if we can do the wingtips, next week, you know, a couple of years later, we'll do the entire wing. | |
| And we'll either cut your costs more, but we need the technology. | |
| So they systematically maneuver. | |