Meet The Billionaire Who Built A Fortune ‘Price-Gouging’ Customers Like The Pentagon by Jeremy Bogaisky
hosted by a business partner, private-equity investor Will Thorndike. “That was likely the best on-the-ground practical business experience I received in my life,” Howley said of Lansdowne, where he operated machine tools and got his first taste of management and finance.
When an aircraft is under development, parts makers compete to win a place on it. That holds down prices. Companies may lose money or scratch out thin profits selling components to Boeing and Airbus during the initial production runs. But they have a freer hand in selling replacement parts to airlines and other operators — the so-called aftermarket. Planes can keep flying for decades after they’re no longer produced.
Prices and manufacturing costs have been redacted in reports the Defense Department releases to the public, but for a, House Democrats revealed that the inspector general found it cost TransDigm $173 to make a quick-disconnect coupling that it sold it to the Pentagon for $6,986. that the 15% profit limit the inspector general’s report set is arbitrary and the review’s methodology was flawed because it excluded legitimate costs.Here are five types of spare parts TransDigm sold to the Defense Department with profit margins as high as 4,436% over what the Pentagon inspector general deemed a fair level , according to a 2019 report.
TransDigm’s counterargument is that the expense and effort it puts in to deliver reliable parts quickly, so planes don’t languish idle on the ground, is worth the sting of higher prices. “Customers should not have to worry about our product and if they’re going to get it when they need it,” said Henderson, the retired TransDigm executive. “That comes with price.
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