As technology has developed, there was a feeling that it made the world smaller. We can see now, however, that it’s the same size…just very interconnected. The last two weeks of news have made us feel that more than ever and at the extremes of good and bad news.
In Aviation news, Boeing now has hundreds of 737Max planes on backlog including its biggest order ever for 200+ planes. that order came just after an $18 billion order for Boeing 777s. In the space of 10 days, Boeing booked orders for more than the entire state of Ohio exports for all manufacturing goods in one year. Should anyone not see the direct and strategic importance of Aviation to USA jobs, they need only review these two orders. The order for 737s puts boeing on even footing with Airbus on their single aisle jets but the real story is the airline, Lion Air. Not a household name for sure, Lion Air is an Indonesian airline started by very average guys. You can read more on their website if you want the details but the most striking things about Lion and the order are that a pair of guys from Indonesia are showing as much chutzpah and entrepreneurial spirit as any Silicon Valley elite might. And, that this kind of commerce, billions of bank funding and growth, are coming from a developing country whose primary religion is Islam which under some forms, prohibits interest on loans. Nevertheless, Lion is financing billions and with its new more efficient jets, not only going to serve Indonesia, but cause chaos in the entrenched Asian market.
Starting with chaos, the floods of Thailand took out a manufacturing facility at Fabrinet. Publicly traded under the NASDAQ FN, this is a company that deserves a close look. They have vertically integrated optical component manufacturing from making cases, to boards, to lasers, to packaging and testing. All under one roof – but within that roof, most of the big names in the transceiver business have small shops for their product sets. Competitors right next to each other all building in the same…building! China and Taiwan still have claim to a lot of the optical business, but Fabrinet is the clearing house. So you might think that 5’ of water in a factory that makes lasers would be bad but it isn’t to Fabrinet. They had already started work on a new factory and will have a better home in just a few months. The reports I read and saw show workers on 12 and 16 hour shifts to get the new factory running. It looks like the USA in the late 40s and 50s of last century.
There are two sides to every event. Huge orders for new efficient airplanes means existing airlines could be in trouble. A natural disaster gives rise to new state of the art manufacturing and growth. We can count on these types of events happening again and just as with optics, it will happen faster and faster.
