Más contenido relacionado La actualidad más candente (20) Similar a BOEING 787 US's Dreamliner Or Nightmare-Liner? Who will Ultimately Win the Aerospace Race: US, Europe, China or Russia? (9) Más de France Houdard (20) BOEING 787 US's Dreamliner Or Nightmare-Liner? Who will Ultimately Win the Aerospace Race: US, Europe, China or Russia?1. BOEING 787 – US’S DREAMLINER OR NIGHTMARE-LINER?
Who will Ultimately Win the Aerospace Race:
US, Europe, China, or Russia?
Copyright © 2013 Exolus. All rights reserved..
2. Contents
Dreamliner 787 – Overly Globalized? Outsourced? 2
Boeing’s Evolution of Globalization/Outsourcing Aircraft 3
Dreamliner 787: Over-Globalization of Frame Production? 4
Boeing’s Aggressive Global Sourcing Strategy – Illustrative China Case 5
Highly Complex Global Supply Chain Leads to Major Challenges 11
Airbus Globalization 17
Airbus 350XWB – Globalization Strategy 18
Airbus A350XWB - Frame Production Concentrated in Europe 19
Airbus 350XWB: Globalization of Supply Chain 22
China and Russia’s Unique Models: “Glocal-ization” Strategies 29
China Market: Foreign Investors: … hunger for China Opportunity 30
Road Forward: China Focusing Initially on Single-Aisle & Regional Jets 41
China’s “Glocalization” Strategy 42
China / Russia Partnership for Aircraft Development/Production? 45
The Ilyushin Il-96 46
Considerations for the Future of Aircraft Production 48
Competition in the Global Supply Chain Immense – USD100 billion 49
1
3. Dreamliner 787 – Overly Globalized? Outsourced?
Copyright © 2013 Exolus. All rights reserved.. 2
4. 1. Boeing’s Evolution of Globalization/Outsourcing Aircraft Production/Development
Parts built by the IAM union of Boeing workers
1967 – (737 Classic)
2009 – (787 Dreamliner)
1969 – (747 Series)
Copyright © 2013 Exolus. All rights reserved.. Source: A Wing and a Prayer Outsourcing at Boeing, Reuters 3
5. 1.1 Frame Production: Overly-Globalized? Overextended?
CHINA SOUTH KOREA JAPAN UNITED STATES
COMPANY ENGINEERS COMPANY ENGINEERS COMPANY ENGINEERS COMPANY ENGINEERS
Chengdu Aircraft Korean Air: NA Kawasaki Heavy Spirit Aerosystems (Wichita, Tulsa): 670
Industrial Group: NA Industries: 190
Nose section
Rudder Wing tips Midfuselage (Wichita, Kan)
section
Tail Cone Engine pylons
(Wichlta)
Fixed trailing edge Fixed leading edges (Tulsa, Okla.)
Shenyang AUSTRALIA
Aircraft Group: NA
COMPANY ENGINEERS Movable leading edges (Tulsa)
Fuji Heavy Industries: 130
Vertical fin Boeing’s Hawker
Leading edge De Haviland unit: 80 Vought (Charleston): 100
Center “wing box”
(Dallas): 300
fuselage section
Hafei Aviation Movable
trailing edges Rear fuselage sections
Industries: NA Mitsubishi Heavy
(Chovlestan, S.C)
Industries: 250
Wing to body
Fairing panels Goodrich Aerostructures: 160
Inboard flaps
Nacelles (Chuta Wista, Caly)
CANADA Boeing: 95
ENGLAND
wing box
COMPANY ENGINEERS COMPANY ENGINEERS Vertical fin
Boeing Canada (Wing-peg): 60 Messier Dowty: 30
(Boeing Everett plant):
Wing to body fairing
Total Engineers: 250 TOTAL ENGINEERS: 4,925
assembly Main landing gear Plus 200 support staff (Everett)
Aft pylon fairings FRANCE
Nose landing gear
ITALY
COMPANY ENGINEERS COMPANY ENGINEERS
Wing to body Latecoere: NA Alenia: 770
fairings SWEDEN
COMPANY ENGINEERS Midfuselage
Main landing gear Aft passenger doors
Saab: 30 sections
doors (body)
Aft cargo door Forward
Forward cargo door passenger doors Horizontal
Main landing gear
stabilizer
doors (wing)
Numbers of engineers are projections for the end of 2005 made by Boeing’s first-tier partners, and may not include all engineering specialties. Production workers are not included.
Copyright © 2013 Exolus. All rights reserved.. Source: Boeing 4
6. 1.1 Systems Development/Production: Overextended Risk Sharing Partnerships?
Highly Diverse Group of Partners Integrated in 787 Collaborative Development
SYSTEMS
Air Conditioning /Pressurization
Autoflight
Communications
Electrical Power
Equipment/Furnishings
Fire Protection
Flight Controls
Fuel
Hydraulic Power
Ice and Rain Protection
Indicating/Recording Systems
Landing Gear
Lights
Navigation
Oxygen
Pneumatic
Vacuum
Water/Waste
Diagnostic and Maintenance
Information Systems
Nitrogen
Auxiliary Power
Cargo and Accessory
Compartments
Copyright © 2013 Exolus. All rights reserved.. Source: Boeing website 5
7. 1.1 Global Sourcing: Overextended? Overly-Globalized?
Illustrative Boeing China Sourcing Activity*
Hafei Aircraft Industries
787 upper and lower body panels for
wing-to-body fairings, single source;
Quick Electronics vertical fin parts
•Print hardware, servers in support of
Boeing IT hardware Harbin Shenyang Aircraft Company
Aircraft •737 aft fuselage subassemblies
Baoji Group Ltd. Industries •787 vertical fin leading edge, single
•Titanium ingot, plate & sheet source
Hong Yuan Aviation Forging & Shenyang
BHA Aero Composites Company, Ltd.
Casting Industry Company Aircraft Shenyang •737 composite panels and parts
•747 titanium forgings since 1984 Industries (flight deck, close out panels, dorsal
fin, wing – to – body fairing, cover
Xi’an Aircraft Company Beijing panels, wing fixed trailing edge, wing
•737 Next Generation vertical fin Shaanxi fixed leading edge, tail cone, interior
•747 trailing edge ribs, floor beams, Aircraft Tianjin parts, secondary composite
detailed parts, and subassemblies
Company structures)
•747-8 trailing edge flaps •747 miscellaneous composite parts
Hanzhong and structures
Xi’an •767 and 777 wing fixed tailing edges
Chengdu Aircraft Industries Aircraft Shanghai and dry bay barriers; empennage
•737 forward entry and over-wing exit Shanghai panels, interior parts, secondary
Company Xi’an Aviation
doors (a subcontract from Vought composite structures
Aerospace, USA) Chengdu
Industry Co. •777 flight deck interior panels
•747-8 ailerons and spoilers, single •787 trailing edge panels for the
Chengdu Changhe
source; horizontal stabilizer parts and Jingdezhen vertical fin, interior parts, secondary
subassemblies (a subcontract from Aircraft Chongqing Aircraft composite structures
Vought Aerospace, USA) Company Company Nanchang
•787 rudder, single source (sole Xiamen
provider of this assembly) Shanghai Aviation Industry Company
Hongdu •737 horizontal stabilizers
Aviation
Southwest Aluminum Industry Taikoo Aircraft Engineering Company
•747 aluminum forgings Ltd. (TAECO)
•747 parts, subassemblies
•747 boeing converted Freighter
modification program
* June 2007
Copyright © 2013 Exolus. All rights reserved.. Source: Boeing, “About us: Boeing in China.” 6
8. 1.1 Dreamliner 787: Overly-Globalized and Overly-Outsourced?
Problems with 787 Launch
Boeing tried to outsource 90% of frame, but …
failed to achieve such a high a level of global deployment
“In retrospect, our 787 game plan may have been overly ambitious, incorporating too many
first all at once – in the application of new technologies, in revolutionary design-and-build
processes, and in increased global sourcing of engineering and manufacturing content” –
Boeing CEO Jim McNerney
Break in Communication Ling between Chicago HQ and Seattle Operations …
and, Within Operations, Outsourced Jobs Results in Loss of Critical Tribal Knowledge
Loss of Tribal Knowledge. Aggressive global outsourcing results in significant reduction of
key staff in Final Assembly and enormous loss of Tribal Knowledge. Tribal knowledge is key
to producing airplanes. Acquired on job over long time, it is the key ingredient in the
development of a new plane. It is the shared method of performing countless daily tasks
efficiently and in coordinating with colleagues. In short, it is the grease that cuts frictions
through the assembly process.
Broken Communication/Management Link Chicago Headquarter and Seattle Operations.
Headquarter moved to Chicago after 85 years in Seattle. Labor unions complain the move
drove a wedge between executives in Seattle-are rank and file. But the benefit is being in
international city, for sales, hiring and so forth.
Copyright © 2013 Exolus. All rights reserved.. Source: Reuters 7
9. 1.2 USD14 billion Launch Costs: Drives Global Subsidies, Global Partnerships
Not Possible for Boeing to Finance alone the USD13.6 bn Project Launch Costs
Given that 2 models are being built, the launch costs are covered by domestic and foreign subsidies,
as well as Boeing's risk-sharing partners.
Funding Source Amount Form Item Aid Type
Washington State $3.2 billion B&O Tax Reduction Final Assembly Production Subsidy
Interest Free Bond, 20-
Kansas State $200 million Nose & Cockpit Interest Free Bond
year
States Bidding on Subsidy for retrofitting Production
$500 million Production Subsidy
FAL 747 to carry planes Transport
State of Washington $16 million 787 Rail Barge 787 Rail Barge Production Subsidy
Wing &Fuselage
Japanese Subsidies and loans to (35% state in
$1.6billion Production Subsidy
Government MHI, KHI, Fuji frames)
Subsidy to Alenia from Rear Fuselage (13%
Italian Government $590 million Production Subsidy
Italian Government state in frames)
International Non-airframe Non-Recurring
$3.1 billion Risk-sharing contribution
System Suppliers suppliers Costs
Boeing Contribution $4.2 billion 787 Launch Funding Self-Financed
Total $13.4 billion
Copyright © 2013 Exolus. All rights reserved.. Source: Canada-US Trade Center Occasional Paper No. 28 8
10. 1.2 Challenges and Delays: Increase Costs from USD10 bn to USD13.5 bn
Challenges and Delays add an Additional USD4 – USD5 billion in Costs
Delay in 2007 – shortage of bolts, flight control software.
Delay in 2008 – 58 day strike
Later – major problems with suppliers in South Carolina
2010 - No availability of Rolls-Royce engines
October of 2010 – another two week delay with horizontal stabilizers from Alenia
November 9, 2010 – emergency landing on test flight due to a fire due to foreign
debris in electrical cabinets. Electrical systems and power panel are built by
Hamilton Sundstrand.
3 Year of Delays Resulted in an Estimated
Additional Development Costs of
USD 4 - 5 billion
Copyright © 2013 Exolus. All rights reserved.. Source: The Seattle Times 9
11. 1.3 Aggressive Weight Reduction Strategy: Overly Ambitious?
Advanced Composites in Aircraft
55
787 A350XWB
50
Boeing
Airbus
45
A320
40
Other B737
A400M SUCCESSOR
35
30
MRJ
A380
25
20
A321
15
A340 A340-600
A320-200 A330
10 A310-200 777
MD-11 MD-90 ARJ21-700
A300 A300-600
5 767
737 747 MD-80 757 747-400
DC10 737-300
0 DC9 L1011
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
Copyright © 2013 Exolus. All rights reserved.. Source: Bauhaus Luftfahrt 10
12. 1.3 Aggressive Weight Reduction Strategy: Overly Ambitious?
Benefits: Lighter … More Durable … Reduced Corrosion/Fatigue & Maintenance
Copyright © 2011 Exolus. All rights reserved.. 11
13. 1.3 Carbon Composite Weight Reduction: Nice in Theory, Very Difficult in Practice
Carbon Composite Challenges
According to Spirit, composite material lay-down rates are far below projections
• The initial goal was 100 lbs/hr with a single-head machine
• Production started at 8-9 lbs/hour
• Efficiency gradually increased to 19 lbs/hour
• The rate is expected to increase to 30 lbs per hour once a new dual-head
machine on order arrives.
• The rate of 100 lbs/hour now is a mid-term goal.
Copyright © 2013 Exolus. All rights reserved.. Source: Boeing 787 Lessons Learnt, October 2008, Airbus 12
14. 1.4 Hyper-Global Outsourcing /Partnerships: Nice in Theory, Possible in Practice?
Poor: Documentation, Oversight, Integration, Supplier Capabilities
Very Poor or Lacking Documentation
• Production records on deferred work were found to be incomplete or lost in transfer resulting in a
loss of configuration control
Assembly work was found to be completed incorrectly only after assemblies reached the Final Assembly
Lines. Root causes …
• Oversight not adequate for the high level of outsourcing in assembly and integration
• Qualification of low-wage, trained-on-the-job workers that had no previous aerospace experience
• Significant amount of change engineering work
• Inadequate supplier capabilities in design, e.g. Vought had no engineering department when
selected
• Oversight not adequate for the high level of outsourcing in detailed design
• Weight growth and subsequent weight saving changes
• Late Definition
• Boeing admitted responsibility for a shortfall in wiring shipments
• Late specification indicated by supplier as root cause
Copyright © 2013 Exolus. All rights reserved.. Source: Boeing 787 Lessons Learnt, October 2008, Airbus 13
15. 1.5 Hyper-Global Supply Chain: Possible to Manage a Fully Global Supply Chain?
Major parts traveling to Everett
City of Everet
origin t
Pieces traveling to be assemblies into larger parts
FROM ASIA FROM EUROPE
Vertical fin leading edge and rubber Horizontal stabilizer flown
Shipped from China to Frederickson from Italy to Everett
Wing to body fairing panels shipped from China to Winnipeg
Main landing gear flown from Derby to Everett
AVIC (Shenyang)
Tail cone shipped from
South Korea to Everett
SWEDEN
CANADA
Forward cargo door from Linköping
Pylon fairing to Wichita
Linköping
and main
landing gear Wing-to-body
Wings flown from doors moved by fairing ENGLAND
Derby
After cargo
Gloucester door from
Japan to Everett Everett rail to Everett assembly
Nose landing gear Linköping to
Winnipeg moved by rail FRANCE
Italy
to Charleston from Gloucester to Toulouse
Harbin Wing box Vertical fin Frederickson Wichita ITALY
assembled UNITED Loggia
assembled in Passenger entry doors
Shenyang STATES Wichita
Frederickson and Grottaglie
JAPAN shipped from Toulouse to
trucked to Everett Tulsa Charleston
Nagoya Fixed leading
Chengdu
Nacelles sent from Chula Vista
Charleston
edges shipped Chula Vista* to Fuselage sections from
CHINA Wing-tip from Tulsa to Everett FROM THE SOUTHEAST Italy flown to
pieces Japan FROM THE MIDWEST Charleston
shipped Mid-and rear-fuselage sections
from Nose section assembled in assembled in Charleston and flown to
South Wichita and flown to Everett Everett
Korea to Rear –
Engine pylons moved by rail from fuselage
Japan assembled
Wichita to Everett Mid-fuselage
assembled
Movable leading edges moved by
Fuselage sections flown rail from Tulsa to Everett
from Japan to
Charleston
FROM AUSTRALIA
AUSTRALIA
Movable trailing
edges and inboard
Melbourne flaps from
Melbourne shipped
to Everett
Copyright © 2013 Exolus. All rights reserved.. Source: Boeing 14
16. 1.5 Global Supply Chain: Process Riddled with Challenges and Gross Mistakes
Problems with 787 Launch
Corroborating source believed to be Vought internal (Design News, 1st March 2008)
• “Ship 2 went to Seattle 2 months late from last schedule change”
• “Several 1000 parts short and no insulation, wrong hardware, no system components, full of FOD
and unworked discrepancies generated by Vought”
• “Stringer wrinkles and delaminating going undetected by Vought quality”
• “No inventory control oversight and accountability”
• “Inability to attract competent technicians to the facility”
• “Novice student inspectors, no competent management organization in-house”
• “Ships 3, 4, 5, and 6 all have more defects than the fatigue model“
Delivery delayed 5 weeks due to damage sustained in production at Global Aeronautica
• Incorrectly installed fasteners, non-compliance by temp worker
• Ad-hoc FAA inspection highlighted FOD issues and workers bringing in their own tools
• Spirit S41 structure 100% complete
• Center fuselage systems installation targeted to be 50% complete on delivery
• Vought aft body section S47/S48 structure 98% complete, systems 87% complete, including THSA as
well as potable and waste water tanks
Copyright © 2013 Exolus. All rights reserved.. Source: Boeing 787 Lessons Learnt, October 2008, Airbus 15
17. 1.6 Summary of Challenges with Hyper-Globalization of Boeing 787
3 Years of Delays … USD4 billion overrun … FAA stops flying in Jan 2013
Challenges and problems in the 787 model resulted in 3 years of delays, approximately $4
billion additional costs … FAA orders Boeing to stop flying the 787 in January, 2013
4 major strikes in the past 2 decades caused loss of 200 days of production. Machinists in South
Carolina, a right-to-work state, voted against IAM representation.
FAA had concerns about the heat dissipation through the composite skins.
Parts shortages: insufficient supply of frames, clips, brackets, and floor beams. Root causes are:
NDI (non-destructive inspection) / QA not supporting production rate demand.
Lack of NDI / QA personnel and equipment at T-2 and T-3 suppliers.
Deferral of NDI testing from T-2 and T-3 to Tier-1 partners to expedite pre-assembly
Repeated NDFastener shortages, primarily affecting but not limited to Mitsubishi. Root causes:
Late changes to sleeved fastener design for lightening strike protection
Alcoa unable to meet demand in time
To tackle the parts shortages Boeing has now taken a consolidated approach to inventory
management across the supply chain.
Rumored that GE GenX and Rolls-Royce Trend 1000 both missed SFC by a 2 – 4%
I testing at FAL due to all of above
Copyright © 2013 Exolus. All rights reserved.. Source: A Wing and a Prayer Outsourcing at Boeing, Reuters 16
19. 2.1 Airbus 350XWB – Regionally-Focused Globalization Strategy
Cost Reduction + Risk Sharing Partners
Reducing costs by divesting from non-core to future requirements:
1) Those that make lower level composite component, or
2) Employ older “metal bending” fuselage assembly technologies
The risk-sharing partners expected to absorb $2.5 billion of the A350 development
costs
Critical aspect for risk-sharing partners to be successful: Ensure they have the financial
and technical capabilities, along with the engineering workforce available to design and
build composite structures.
Conditions for risk-sharing partners are that they need to pay for component
development costs, as well as be completive in terms of recurring costs (production) in
US$ terms.
Looking at 10 potential risk-sharing partners from Europe, Asia, the US and Latin
America.
MOUs are already in place for China, South Korea, and Russia.
Source: Strategic Destruction of the North American and European Commercial Aircraft Industry: Implications of the System Integration
Copyright © 2013 Exolus. All rights reserved.. Business Model by David Pritchard and Alan MacPherson 18
20. 2.2 Airbus A350XWB - Frame Production Largely Concentrated in Europe
CHINA GERMANY FRANCE
Rudder Aft Fuselage
Harbin Hafei Airbus Airbus Deutschland Fixed Leading Edge
Harbin | China Stade | Germany Spirit Aerosystems Europe
St Nazaire | France
Forward Fuselage
UNITED STATES Premium Aerotech Nose Section
Nordenham | Germany Aerolia
Center Fuselage
Meauite | France
Spirit Aerosystems
Kinston | US
Movable Leading edge
GKN Aerospace De Pylon
Munich | Germany Airbus France
Toulouse | France
Horizontal Stabilizer
Rockwell Collins
Vertical Tailplane
Cedar Rapids | US Keel Beam
Airbus Deutschland
Air France
Stade | Germany
Nantes | France
Wing Box
Landing Gear Nacelle
Messier-Dowty Goodrich
SPAIN Air France
Nantes | France
Kinston | US Chula Vista, US
Horizontal Tail plane
Aernnova
Getafe | Spain
AUSTRIA ENGLAND
winglets Fixed Trailing Edge
FACC Rear Fuselage Tailcone
Airbus Spain Airbus Spain GKN UK
Ried | Austria
Getafe|Spain Getafe | Spain Filton | UK
Copyright © 2013 Exolus. All rights reserved.. Source: Airbus 19
21. 2.2 Airbus 350XWB: Supply Chain Largely Focused on Europe
Hamburg, Germany
Sub assembly line for
UK aft fuselage
Rudder: Harbin → St Nazaire
2
Belly fairing: Harbin → St Nazaire
Wing cover: State →
Broughton Nordenham
Broughton 1
Wing leading edge: St Nazaire Forward fuselage
Hamburg (equipping in
Harbin → Broughton Winglets/wing spoiler: Ried → Broughton Stade Hamburg)
Wing cover:
Getafe →
Broughton Gloucester Bremen Vertical
Wing box assembly in Tail plane
CHINA 4 5 Bremen, Germany assembly
Broughton, equipping in and
Filton Bremen Sub assembly line for equipping
wing
GERMANY
MeauiteNose: Meauite →
3 Nazaire Munich
Inboard & Outboard landing flaps: Munich →
Nantes Broughton AUSTRIA
Ried
Doors (MLG/Nose): Corona → St Nazaire
St Nazaire
St Nazaire, France Front fuselage assembly and equipping: forward fuselage and
Sub assembly line for nose
front fuselage and
centre fuselage FRANCE
Center fuselage: Kinston → St Nazaire
After fuselage assembly and
US Toulouse equipping: U/L shells and Tailcone
Corona Cedar Rapids
Chula Vista Toulouse, France
Kinston •Final assembly line
SPAIN •produce Pylon.
Nacelle: Chula Vista → Toulouse
Tailcone: Getafe →
Getafe Hamburg
Illescas
Horizontal Stabilizer: Cedar Rapids → Getafe
1. Forward fuselage: Nordenham → Hamburg
2. Upper/lower shells: Stade → Hamburg
3. Center wing box and keel beam: Nantes → St Nazaire
4. Fixed trailing edge: Filton → Broughton
5. Landing gear: Gloucester → Filton
Copyright © 2013 Exolus. All rights reserved.. Source: Airbus 20
22. 2.2 Systems Development/Production: US/European Risk Sharing Partnerships
Airbus Key Systems Suppliers
SYSTEMS
Air Conditioning /Pressurization
Autoflight
Communications
Electrical Power
Equipment/Furnishings
Fire Protection
Flight Controls
Fuel
Hydraulic Power
Ice and Rain Protection
Indicating/Recording Systems
Landing Gear
Lights
Navigation
Oxygen
Pneumatic
Vacuum
Water/Waste
Diagnostic and Maintenance
Information Systems
Nitrogen
Auxiliary Power
Cargo and Accessory
Compartments
Copyright © 2013 Exolus. All rights reserved.. Source: Airbus 21
23. 2.2 Global Sourcing: Globalized, but Less than Boeing
Airbus Strategic Sourcing in China*
Harbin
Aircraft Hafei Aviation Industry Co., Ltd.
Hong Yuan Aviation Forging & Casting Industries •HTP leading edge ribs and
•Titanium forging parts Harbin torsion box
Xi’an Aircraft Industry Company
•Access doors for wide-bodied aircraft Shenyang Shenyang
•Wing fixed trailing edges Aircraft
•Medium air ducts Industries Shenyang Aircraft Company
•Produces and assembles emergency
Shaanxi exit doors
Aircraft •Manufactures:
Company -Fixed leading wing edges and ribs
-A320 cargo doors
Hanzhong -Skin plates
Xi’an
Aircraft Shanghai Shanghai
Company Xi’an Aviation
Chengdu
Industry Co.
Aircraft
Company Chengdu Guizhou
Changhe
Aircraft
Company Nanchang
Chengdu Aircraft Industrial Company
•A320 rear passenger doors Hongdu
Aviation
Industry
Guizhou Aviation Industrial Group
•Maintenance jigs and tools
* July 2007
Copyright © 2013 Exolus. All rights reserved.. Source: Airbus S.A.S., “Airbus in China;” Airbus S.A.S., “ Airbus in China: Milestones” 22
24. 2.2 Yet … A Great Leap Forward: Airbus Moves Final Assembly of A320’s to China
Migration of Assembly Functions to China
Company: Airbus
Total Investment:
• USD1.2 - 1.5 billion
Labor Force
• 1,000 employees
Functions:
• Final Assembly for A320
Investment Site and Joint Venture Partners:
• Tianjin. Three-party joint venture with Tianjin Free
Trade Zone and Aviation Industry Corporation of
China (AVIC).
Operational Commencement
• September 2008
2010 Production Output/Sales
• 37 A320 planes for eight Chinese airlines
2011 Assembly (Planned)
• 36 A320 planes
Copyright © 2013 Exolus. All rights reserved.. Source: All Publically Available Information; Tianjin Economic Development Area (TEDA), Company Website 23
25. 2.3 Aggressive Weight Reduction Strategy: Equal to Boeing - Overly Ambitious?
100% 3 3 2 2 4
7 3 8
9
90% 13 12 5
6 6
6 5
5 5
80% 14
4 7 15 18
70% 22
60%
50%
53
40%
75 73
68 67
30% 61
20%
10% 19
0%
A300 A310-100 A320-200 A340 A380 A350 XWB
Aluminium Composites Titanium Steel GLARE Miscellaneous
Copyright © 2011 Exolus. All rights reserved.. Source: Airbus: Metal Materials in Airbus A380 24
26. 2.3 Aggressive Weight Reduction Strategy: Airbus Composite Evolution
Within primary structures
Composites Introduction
A350 XWB
+ Outer Wing, Fuselage
A380
+ Rear Fuselage, Center Wing
Box, Wing Ribs
A340-600
+ Rear Pressure Bulkhead,
A330/340
Keel Beam
+ HTP as Fuel Tank
A320
+HTP, Flaps, Ailerons,
Spoilers
A310-300
Fin, Rudder, Elevator
1980 1990 2000 2010
Copyright © 2013 Exolus. All rights reserved.. Source: Airbus: Composite in Airbus: A Long Story of Innovations and Experiences 25
27. 2.3 Aggressive Weight Reduction Strategy: A350 XWB Structures
Copyright © 2011 Exolus. All rights reserved.. Source: Airbus: Composite in Airbus: A Long Story of Innovations and Experiences 26
28. 2.4 Regional Supply Chain: Outsourced and Integrated Logistics Model
Airbus Outsourced Integrated Logistics
KUEHNE+NAGEL
Transformation Plan during implementation (i.e Toulouse)
September 2008 September 2008
BLAGNAC BLAGNAC
JLL JLL
ST ELOI ST ELOI
SEOR SEOR
TIT TIT
CLEMENT ADER CLEMENT ADER
L. BREGUET ATHOS L. BREGUET ATHOS
HARDWARD & FASTENERS HARDWARD & FASTENERS
7P2 BOOKING 7P2 BOOKING
EUROCENTRE EUROCENTRE
Take over of over 360 employees (providers & AIRBUS) in one year with 4 different collectives agreement and 5
different HR policies
Smooth transition with 0 day of work stoppage
Copyright © 2011 Exolus. All rights reserved.. Source: Kuehne+Nagel AIRBUS Case Study, Paris 2010 27
29. 2.4 Regional Supply Chain: Outsourced and Integrated Logistics Model
Airbus Flight Hour Services & Total Support Package
Maintenance & Engineering domains
Airframe FHS – TSP:
maintenance
Line & light maintenance
Fleet engineering
IT and engineering services
Engineering Airbus FHS full component
Component FHS Component:
repair
FHS Airbus vendor: Component stock,
Pool access, logistics and
Component Component stock, pool access, logistics Repair for all components
spare parts And repair for Airbus LRUs only Including Airbus LRUS
and logistics
Engine
maintenance
In-House Airline’s outsourcing policy Outsourced
Copyright © 2011 Exolus. All rights reserved.. Source: Airbus: Airbus Material, Logistics and Suppliers,, MOR Conference in Dallas, 2009 28
30. China and Russia’s Unique Models: “Glocal-ization Strategies”
Copyright © 2013 Exolus. All rights reserved.. 29
31. 3.1 China Market: Foreign Investors … Hunger for the China Market
230% Increase in Aircraft Needed in China by 2028
New Deliveries 2028
Existing Fleet 2010
Existing Fleet and New Deliveries (2010 - 2028)
12,000
10,000
5,000
8,000
Aircraft (units)
6,000
4,000
6,567
3,165
2,000
1,150 1,100
1,050 1,000 550 500 480
1,383
826
600
702 423 447 387 507 544 479
0
US China UK Germany India Russia Ireland Australia Japan Brazil
Copyright © 2013 Exolus. All rights reserved.. Source: Airfleets, COMAC, Boeing, EIU 30
32. 3.1 Driven by: Growth Spike in China’s Travel Volume
China World’s 3rd Highest Traffic Volume by 2020
Foreign Inbound & Chinese Outbound Travel Volume
250 237
Inbound, Foreign Outbound, Chinese
225
200
167 million
175 Traveler
USD millions
Increase
150
125
100
69
75 CAGR 11.8%
51
50
21
25 13
0
Copyright © 2013 Exolus. All rights reserved.. Source: China National Tourism Association (CTNA); World Tourism Organization (UNWTO) 31
33. 3.2 China: … also hungers for Opportunity, However
China Fleet 99% Foreign Airplanes
China Civil Aircraft Fleet China Aircraft Fleet
(2010) Boeing 736
Airbus 500
China Other Foreign Other 133
Aircraft, 10%
Domestic Domestic 14
Planes Total Aircraft 1,383
1%
Airbus
36%
Boeing
53%
Copyright © 2013 Exolus. All rights reserved.. Source: All Publically Available Information , Company Website 32
34. 3.3 Therefore: … China developing own Suite of Domestic Aircraft
2010 Stage 1 – Regional Jet (2010): ARJ21
• Aircraft Type: 70 to 90 Seat Twin Turbo-Fan
• Development: CIVIC drawing on foreign suppliers for nearly all research and
development, production for sub-systems, local partner providing facility, sub-contracting
• Schedule: First Flight - November 2008 and in-service 2010/11
2015 Stage 1 – Regional Jet (2010): MA 700
• Aircraft Type: 60- 70 seats
• Development: Xian Aircraft Corporation
• Schedule: Launch 2009 and in-service 2015
2013 Stage 2 – Single Aisle (2013): C-series
• Aircraft Type110/130 , Single-aisle - Twin-Turbofan
• Development: : Fuselage Build by AVIC’s, Shenyang Aircraft Industries Group ,
Bombardier
• Schedule: First Flight in 2011 and In- Service in 2013
2016 Stage 2 – Single Aisle (2016): C919
• Aircraft Type: Single-Aisle Narrow Body (156 Seat, 168 Seat and 180 Seat)
• Development: COMAC and joint ventures with foreign suppliers to jointly research and
develop the platform systems
• Schedule: First Flight in 2014 and In- Service in 2016
20XX Stage 2 – Single Aisle (201X): CS2010
• Aircraft Type: 150-200 Seat- Single-aisle - Twin Turbofan
• Development: Guangdong Prosperous Airline
• Schedule: First Flight in 20xx and In- Service in 20xx
Copyright © 2013 Exolus. All rights reserved.. Source: Chinese Aerospace Market Research 33
35. 3.4 Road Forward: China Focusing Initially on Single-Aisle & Regional Jets
China’s 3,165 New Aircraft = 12% of Future Global Demand
Future Global Aircraft Deliveries China % of Future
Aircraft Demand
(2009 – 2028) (2009 – 2028)
Global Demand 26,500
China Portion 3,165
Twin-Aisle ,
6,250 China = 12% of Global Demand
26,500
Large New Aircraft
Aircraft, 1,729 by 2028
Regional Single-Aisle
Jet, 1,500 , 16,977
Copyright © 2013 Exolus. All rights reserved.. Source: Airbus, “Airbus Global Market Forecast, von Tronchin, March 2010, other Public Sources 34
36. 3.5 China’s “Glocalization” Strategy: Frame Production / Assembly in China
China Aircraft: C919
AVIC: Harbin
Aerostructure:
•Wing/body fairing
AVIC: Shenyang Harbin
Aerostructure:
•AFT fuselage AVIC: Shanghai
•Engine nacelles Shenyang
•Tail fin Aerostructure;
•Sub-assembly line
•final assembly line
AVIC: Xi’an
AVIC: Nanchang
Aerostructure:
•Wing box Aerostructure:
•Aileron Shanghai
Xi’an •Trailing edge flap
•Trailing edge flap •Leading edge slat
•Leading edge slat
Chengdu Nanchang
•Center fuselage
AVIC: Hongdu
Hongdu
AVIC: Chengdu
Aerostructure:
Aerostructure: •Forward fuselage
•Nose
Copyright © 2013 Exolus. All rights reserved.. Source: COMAC 35
37. 3. 5 China’s “Glocalization” Strategy: Foreign Joint Ventures Set Up in China
C919 Largely Based on Joint Sino-Foreign Research & Development
Suppliers for China’s C919
Liebherr Oxygen Equipment
Parker Flight Deck Panel Assemblies
Rockwell Collins Interior Components
CFM International Engines
Eaton Corporation Lighting Equipment C919
Hamilton Sundstrand Electric Power System
Eaton Corporation Primary Flight Control
Kidde Aerospace Fire Protection
Liebherr AMS, Landing Gear
Honeywell Auxiliary Power Unit Door System
Parker Aerospace Fuel, Hydraulic, Flight Controls
Rockwell Collins Avionics
Eaton Corporation Flight Deck Control Suite
Albany Engineered
Engine Interface Control System
Composite
Copyright © 2013 Exolus. All rights reserved.. Source: Airframers, January 2011; Various Public Sources 36
38. 3.5 China’s “Glocalization” Strategy: Frame Production / Assembly in China
China Aircraft: ARJ21
AVIC: Shenyang
•Rudder
•Vertical leading edge
•Rear fuselage AVIC: Shanghai
•Tail cone Shenyang
•pylon •Sub-assembly line
•final assembly line
•Vertical stabilizer
•Horizontal leading edge
AVIC: Xi’an
•Forward fuselage
•Center fuselage
•Aft fuselage Shanghai
Xi’an
•Wings
•Nacelles
Chengdu
AVIC: Chengdu
•Nose
Copyright © 2013 Exolus. All rights reserved.. Source: COMAC 37
39. 3.5 China’s “Glocalization” Strategy: Focus on Technology Transfer to China
2010: ARJ21 Largely Based on Foreign Research & Development
Suppliers for China’s ARJ21
BE Aerospace Oxygen Equipment
Eaton Aerospace Flight Deck Panel Assemblies
Fisher Advanced Composites Interior Components
General Electric Engines
Goodrich Hella Aerospace Lighting Equipment
Hamilton Sundstrand Electric Power System
ARJ21
Honeywell Primary Flight Control
Kidde Aerospace Fire Protection
Liebherr AMS, Landing Gear
MPC Products Corporation Auxiliary Power Unit Door System
Parker Aerospace Fuel, Hydraulic, Flight Controls
Rockwell Collins Avionics
ROSEMOUNT
AEROSPACE
Rosemount Aerospace Wiper System, Windshield Heater System
Sagem Flight Deck Control Suite
Saint Gobain Windshields and Window Openers
Vibro-Meter Engine Interface Control System
Zodiac-Air Cruisers Crew Seats
Copyright © 2013 Exolus. All rights reserved.. Source: Baidu Encyclopedia, Various Public Sources 38
40. 3.6 Foreign Systems Vendors: Driving Development Aerospace Industry in China
Investment Footprint largely aligned with China Aviation Structure/Clusters
ERJ145 Assembly
EC175 design & production
Harbin A350 composite parts
Turbine NGVs, turbine
rings, compressor seals Heat shields
Beijing Shenyang
Landing gear & engine A320 Final Assembly Line
nacelle components
Tianjin
Composites manufacturing
Xi’An
Design & Production of ECS
Nanjing
Shanghai
Chengdu
Suzhou
COMAC C919 Production
Precision sheet metal
Autoclaved composite parts
Xiamen Engine parts
Landing gear components
Sensors, valves, nozzles
Copyright © 2013 Exolus. All rights reserved.. Source: AeroStrategy, 2010 39
41. 3.6 Foreign Aircraft OEM’s: Driving Development Aerospace Industry in China
Wide Variance in Strategies employed by Major Aerospace OEM’s
Aerospace OEM’s Functional Deployments in China
Embraer Diamond
Training O O O
Engineering O
Manufacturing /
Assembly O O O
Sourcing O O O O O O
Service O O O
Sales O O O O O O
Copyright © 2013 Exolus. All rights reserved.. Source: Company Information pages, EIU 40
42. 3.7 Paving the Road for the Future: China’s Twin-Aisle and Jumbo Jets …
Develop Homegrown China Aircraft –> Compete with Boeing, Airbus, Embraer
China’s Future Aircraft
(2020 – 2030)
2010 Stage 1 – Regional Jet (2010): ARJ21
• Aircraft Type: 70 to 90 Seat Twin Turbo-Fan
• Development: CIVIC drawing on foreign suppliers for nearly all research and development,
production for sub-systems, local partner providing facility, sub-contracting
• Schedule: First Flight - November 2008 and in-service 2010/11
2016 Stage 2 – Single Aisle (2016): C919
• Aircraft Type: Single-Aisle Narrow Body (156 Seat, 168 Seat and 180 Seat)
• Development: COMAC and joint ventures with foreign suppliers to jointly research and develop
the platform systems
• Schedule: First Flight in 2014 and In- Service in 2016
2020? Stage 3 – Twin-Aisle (2020 – 2025)?: C919 – Extensions?
• Aircraft Type: Extensions of C919, possible Twin-Aisle version
? • Development: : COMAC and joint ventures with foreign suppliers to jointly research and
develop the platform systems
• In- Service: 2020 - 2025
2020? Stage 4 – Jumbo Jets (2020 – 2025)?: ?
• Aircraft Type: Jumbo Jet
? • Development: COMAC and joint ventures with local domestic suppliers to jointly research and
develop the platform systems
• In- Service: 2020 – 2030
Copyright © 2013 Exolus. All rights reserved.. Source: Chinese Aerospace Market Research 41
43. 3.8 China’s Unique Path in Building its Glocalized Aerospace Sector
China Strategy – Cost Competitive FAA/JAA Compliant A/C
Airframe Production in China: Technology Acquisition through Offsets and Acquisitions (FACC)
China’s labor costs are at least 4 times lower than those that prevail in Europe and North America …
important in light of the labor-intensive nature of certain aspects of the airframe production process
Western components are readily available to install on Chinese airframes – engines, avionics, hydraulics,
fly-by-wire systems. Result is that Chinese aircraft that are endowed with proven Western and/or
Russian systems, cheap Chinese airframes, and performance characteristics that match US FAA and EU
JAA technical and safety standards.
China starting production effort with state-of-the-art machine tools and fixtures, new materials handling
processes, Western design software, and advanced engineering procedures. As such, they will
technologically leapfrog the west.
Chinese government has the investment capital and political determination required for massive and
sustained industry support.
China will be able to pump-prime its domestic aerospace industry by mandating the purchasing
behavior of Chinese airlines. This is non-tariff trade barrier of immense significance at the global level.
Copyright © 2013 Exolus. All rights reserved.. Source: The emergence of a new international competitor in the commercial aircraft sector: The China syndrome by Alan MacPherson 42
Notas del editor Launch costs of 787 approximately USD13.4 billion (01), again development costs of USD6-7 billion for 777A380 launch cost of USD10 – 12 billion, which in some estimates could be under by USD3-5 billion.Given that 2 models are being built, the launch costs will be covered by subsidies and/or Boeing's risk-sharing partners.Multiple bidders against each other Boeing Actions• Second FAL encouraged by customers, but real bottleneck is supply chainBoeing had to ultimately buy Voigt and Alenia united States to take control of the significant operational problems in frames productionThey set up identical labs for engineers at the various companies.Cultural training, sensitivity, etc.Supplier InitiativesAlenia, Hawker de Havilland• Investing in second autoclave and further equipment to support production ramp-up.Kawasaki• Investing in new factory and production equipmentSpirit, Vought, Global Aeronautica• No investment in facilities or equipment, preparing for more gradual ramp-up• Spirit unilaterally shut down the production of CFRP fuselage barrels in January 2008. Production was slated to restart in 3Q 2008 Break from the past:-Pre-installed systems/completed subassembliesFew people 800 to 1,200Leaner assembly lineLower inventoryHigher timeJapanese now account for 35% of work share, first time Japanese have taken a lead role in mass production of subcontractors supported and funded by the Japanese government. Break from the past:-Pre-installed systems/completed subassembliesFew people 800 to 1,200Leaner assembly lineLower inventoryHigher timeJapanese now account for 35% of work share, first time Japanese have taken a lead role in mass production of subcontractors supported and funded by the Japanese government. Ergo: Eventually, Western airlines will find it hard to ignore Chinese aircraft that are fully FAA/JAA compliant – especially if they sell at a fraction of the cost of Western alternatives.Recent estimates have the C919 launch investment pegged between USD6.5 and 7.7 billion, which could have the prototype built by 2015.C919 is intended to be direct competitor to Boeing’s 737 and Airbus’s A320 models Ergo: Eventually, Western airlines will find it hard to ignore Chinese aircraft that are fully FAA/JAA compliant – especially if they sell at a fraction of the cost of Western alternatives.Recent estimates have the C919 launch investment pegged between USD6.5 and 7.7 billion, which could have the prototype built by 2015.C919 is intended to be direct competitor to Boeing’s 737 and Airbus’s A320 models Ergo: Eventually, Western airlines will find it hard to ignore Chinese aircraft that are fully FAA/JAA compliant – especially if they sell at a fraction of the cost of Western alternatives.Recent estimates have the C919 launch investment pegged between USD6.5 and 7.7 billion, which could have the prototype built by 2015.C919 is intended to be direct competitor to Boeing’s 737 and Airbus’s A320 models