What Manufacturers Lose When They Outsource Production

Fifteen years ago, developing a new technology product often followed a familiar playbook: design in Silicon Valley, manufacture overseas. But rising tariffs, geopolitical tensions and China’s growing technological capabilities are prompting many companies to reconsider that model.

For Will Hasting, co-founder and CEO of Cincinnati-based Angel Aerial Systems, keeping production in-house has been a priority from the start. The company designs, engineers and manufactures commercial drones and autonomous aerospace hardware under one roof—a deliberate strategy shaped by Hasting’s experience developing components at GE Aviation.

“Even with all the resources of GE behind us, the moments when manufacturing was physically separated from engineering created friction that slowed learning and limited what was possible,” he says. “The engineer who can walk out onto the shop floor, pick up the part, see exactly how it came out of the machine and immediately iterate on the design—that engineer builds a fundamentally deeper understanding of what’s achievable.”

In a conversation with Chief Executive, Hasting explains why he sees in-house manufacturing as a competitive advantage, what makes Cincinnati an attractive location for advanced manufacturing and how his experience managing nuclear operations in the Navy shapes his leadership philosophy.

Why must deep-tech and aerospace companies maintain control of their physical manufacturing pipelines instead of contracting them out?

One reason China has done so well in modern manufacturing is that their factories are physically close to their engineers. When you separate those two functions, even within the same company, you lose something critical and hard to quantify.

I learned this firsthand at GE Aviation, where I led the design of the first-ever composite structural fan frame for the GE9X engine, the powerplant behind the Boeing 777X. This is one of the most advanced commercial jet engines ever built, we’re talking about a component that took months of precision machining and cost over half a million dollars per unit.

Even with all the resources of GE behind us, the moments when manufacturing was physically separated from engineering created friction that slowed learning and limited what was possible. The engineer who can walk out onto the shop floor, pick up the part, see exactly how it came out of the machine and immediately iterate on the design—that engineer builds a fundamentally deeper understanding of what’s achievable. That knowledge compounds over time.

At Angel Aerial Systems, keeping manufacturing in-house isn’t a cost decision, it’s a capability decision. It lets our engineers understand the process and its limits, shave out unnecessary weight and design for ease of manufacture, which directly drives down cost and increases our ability to scale.

There’s also the supply chain reality: Smaller companies get deprioritized by contract manufacturers when a bigger customer comes along. We can’t afford that. And finally, in-house manufacturing means we can actually support our customers in the field after delivery. Bottom line: Vertical integration makes us better engineers, builds better products and makes us a more resilient business.

Tell us why Cincinnati is such a good location for both developing technology and producing it.

There’s a saying I heard Don Valentine say once that captures the venture capital mindset perfectly: “The Catholic Church is wrong. The earth is flat, and when you go past Denver, you fall off the edge into a technological oblivion.” It’s funny, but it says everything about how the traditional VC world has historically viewed opportunity outside Silicon Valley. And look, it’s undeniably easier to raise institutional capital in San Francisco.

But here’s what that idea misses entirely: The cost of developing technology in the Valley is extraordinarily expensive. The wisdom back in 2010 was to design in California, produce in China. For a while, that worked. In the early 1960s, Fairchild Semiconductor began outsourcing silicon production overseas, and Silicon Valley gradually shifted away from being a hardware-centric place. Designed in California, manufactured cheaply abroad was the model.

But China has since moved from low-cost producer to high-technology designer and competitor. The low-hanging fruit is gone. To create truly world-changing products now, you need to design and produce in the same location—so you have optimal knowledge of the systems, and you can apply American ingenuity with an ever-increasing depth of understanding.

That’s exactly what we’re doing in Cincinnati. And Cincinnati is a remarkable place to do it. The city has deep roots going back to the Wright brothers and the American machine tool industry. Within an hour of our facility, you have Wright-Patterson Air Force Base, the Air Force Research Laboratory, GE’s turbine heritage and some of the best precision manufacturers in North America, often behind completely indescript signs in what looks like cornfields.

The technical talent here is extraordinary, and the cost of living means we can pay our people a real wage, attract top engineers who are actually living well and keep our burn rate low. For the long term, particularly as drone cost becomes a deciding factor in modern warfare and public safety, that combination of design, manufacturing and talent depth under one roof is an absolute strategic advantage. That’s why we’re staying in Cincinnati.

Describe your transition from managing nuclear operations in the Navy to navigating public markets and running a commercial drone company.

The Navy taught me an enormous amount in terms of discipline. It really formed the technical and business foundation of my entire career and instilled a push to always improve.

What people may not realize is that being a “Navy nuke” is very different from the rest of the military. Enlisted personnel and junior officers are actively encouraged to speak up if something is wrong, which runs counter to the typical top-down military structure. That culture of speaking up is a foundational reason the naval nuclear power program has gone without a nuclear accident since 1954.

I’ve brought that same principle into Angel Aerial Systems. The boss is not the final say; the truth is the final say. It forces us to make data-driven decisions and creates a culture where even technicians and workers can surface ideas. We’re not executing a single vision from the top; we’re firing on all cylinders because the best idea wins.

What’s next for Angel Aerial Systems?

We have a product in the field that flies four times longer than anything else in its class, at a fraction of the cost of the alternatives. We are ramping up on both the military and public safety sides, delivering on our current orders and building toward broader deployment. More capable tools mean increased mission effectiveness for our customers, that’s what we’re focused on and what we’re executing toward.