Aerospace Giants Launch Internet Trading Exchange for Aircraft Parts and Supplies

A major breakthrough in the aerospace industry has been announced, as four of the world's largest aerospace and military concerns, The Boeing Company, BAE Systems P.L.C., the Raytheon Company, and the Lockheed Martin Corporation, are teaming up to launch an Internet trading exchange. This innovative platform will allow the companies to buy and auction parts and supplies for commercial jetliners, missiles, and jet fighters, while also allowing suppliers to bid, buy, and auction original airplane parts and replacement parts. Commerce One Inc. will run the venture, with the four companies initially taking equal ownership. The exchange aims to drive down purchasing costs, improve the availability of parts, and streamline production for the global aerospace and military market, which has sales exceeding $400 billion annually.

Key Takeaways:

• The Boeing Company, BAE Systems P.L.C., the Raytheon Company, and the Lockheed Martin Corporation have formed an Internet trading exchange to buy and auction parts and supplies for aircraft and aerospace equipment.
• Commerce One Inc. will run the venture, with a 5 percent stake owned by the company.
• The exchange aims to drive down purchasing costs, improve the availability of parts, and streamline production for the global aerospace and military market, which has sales exceeding $400 billion annually.
• Companies will also be able to trade and buy supplies unrelated to their products, such as computer printer paper, pens, and janitorial cleaning solutions.
• The exchange will begin operating by midyear, with a potential sale of shares in the venture taking place next year.
• Boeing and its partners will initially take equal ownership in the venture, with 20 percent set aside for employees and future partners.
• The stakes in the new company will be adjusted based on the flow of electronic commerce in the first three years of operations.

Statistics:

• The global aerospace and military market has sales exceeding $400 billion annually.
• The four companies involved have combined market share as some of the world's largest aerospace and military concerns.
• The exchange will begin operating by midyear.
• A potential sale of shares in the venture could take place next year.
• The four companies involved have formed an alliance to drive down purchasing costs and improve the availability of parts.

Sources:

• The Boeing Company
• BAE Systems P.L.C.
• The Raytheon Company
• The Lockheed Martin Corporation
• Commerce One Inc.