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Airbus May Set Up Assembly Line In China  
User currently offlineLumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Posted (8 years 9 months 3 weeks 2 days 20 hours ago) and read 5836 times:

From Bloomberg:

Airbus to Expand in China; May Set Up Assembly Line (Update1)

This adds a whole new dimension to the outsourcing issue. Part of Airbus' new globalization strategy? I realize that the A320 is selling like crazy and Airbus can hardly keep up with the demand, but this is the first time that I've head of either Airbus or Boeing outsourcing the actual assembly of the airframe. I'd love to see Boeing set up a parallel assembly line in Japan for the 787 to "strike proof" this aircraft the next time the machinists contract comes up for negotiation.

Quote:
Airbus SAS, the world's largest commercial aircraft maker, said it may open a factory in China for assembling its single-aisle, A320 series of planes as part of a plan to expand operations in the country.



"When all is said and done, more will be said than done".
46 replies: All unread, showing first 25:
 
User currently offlineAirFrnt From United States of America, joined Jul 2004, 2826 posts, RR: 42
Reply 1, posted (8 years 9 months 3 weeks 2 days 20 hours ago) and read 5823 times:

This should be good for 50 A380s.

User currently offlineLumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Reply 2, posted (8 years 9 months 3 weeks 2 days 20 hours ago) and read 5774 times:

Perhaps this is what Noel Forgeard really meant by a "chinese copy"?  Yeah sure


"When all is said and done, more will be said than done".
User currently offlineHS748 From , joined Dec 1969, posts, RR:
Reply 3, posted (8 years 9 months 3 weeks 2 days 19 hours ago) and read 5735 times:

A sound plan for ensuring the Chinese buy many more aircraft from Airbus. Good on them!

User currently offlineMarshalN From Hong Kong, joined Sep 2005, 1521 posts, RR: 0
Reply 4, posted (8 years 9 months 3 weeks 2 days 19 hours ago) and read 5734 times:

Didn't MD, back in the day, set up a line in China too?

Yeah, there's certainly politics involved, but when it's a market this big, I'm sure Airbus (or Boeing) will be happy to do what they can do make it work.


User currently offlineLumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Reply 5, posted (8 years 9 months 3 weeks 2 days 19 hours ago) and read 5715 times:

Quoting HS748 (Reply 3):
Good on them!

Indeed. I wonder where the wings will be made? Wink

Speculation. Do you think there will be a side agreement to this deal that says Airbus won't develop a successor to the A320 for x number of years, to allow a significant production run in China? Could be an incentive for Boeing to accelerate the replacement for the 737NG....



"When all is said and done, more will be said than done".
User currently offlineA319XFW From , joined Dec 1969, posts, RR:
Reply 6, posted (8 years 9 months 3 weeks 2 days 19 hours ago) and read 5709 times:

Quoting Lumberton (Reply 5):
Indeed. I wonder where the wings will be made?

Airbus has already signed a deal to make 4 wingsets a month in Xian, so if you can add 2 and 2 together, there's your answer!


User currently offlineGigneil From United States of America, joined Nov 2002, 16347 posts, RR: 84
Reply 7, posted (8 years 9 months 3 weeks 2 days 19 hours ago) and read 5706 times:

Quoting Lumberton (Thread starter):
Part of Airbus' new globalization strategy?

It isn't "new". Airbus has been a global company for quite a while now, to a greater extent than Boeing.

The 787 is Boeing's first "global" product.

Quoting Lumberton (Thread starter):
I realize that the A320 is selling like crazy and Airbus can hardly keep up with the demand, but this is the first time that I've head of either Airbus or Boeing outsourcing the actual assembly of the airframe.

They haven't, but MacDac made MD-80s in China and Embraer has also made ERJs there.

N


User currently offlineLufthansa From Christmas Island, joined May 1999, 3213 posts, RR: 10
Reply 8, posted (8 years 9 months 3 weeks 2 days 19 hours ago) and read 5676 times:

If i remember right the MD problem came down to some tricky technology transfer laws.

There was some equipment that was developed of military use that ended up being transfered to the chinese plant and the US government apparently had a major problem with it.

I also recall a problem with some sort of guidence chip used in some 738s or something, which was also used by the USAF...and therefore there was another big issue.... so it could be tricky... but from a business point of view, if they can get the quality right (and my, it is a nightmare in China... sure you can do it, and achieve it but it is no small feat) it could work really well.

We may end up seeing airbus set up plants all over the globe. Can you imagine seeing A350s roll out in Seattle, A319s in Shanghai and A380s in france? Throw in a few government contracts and it could happen yet.


User currently offlineA319XFW From , joined Dec 1969, posts, RR:
Reply 9, posted (8 years 9 months 3 weeks 2 days 19 hours ago) and read 5661 times:

Quoting Lufthansa (Reply 8):
Can you imagine seeing A350s roll out in Seattle,

You mean a KC-30 roll out in Mobile.... But that is up to the Pentagon.


User currently offlineLumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Reply 10, posted (8 years 9 months 3 weeks 2 days 19 hours ago) and read 5654 times:

Quoting Lufthansa (Reply 8):
We may end up seeing airbus set up plants all over the globe. Can you imagine seeing A350s roll out in Seattle, A319s in Shanghai and A380s in france? Throw in a few government contracts and it could happen yet.

I agree with your point, Lufthansa. However, didn't Airbus select a site in Alabama for their U.S. production site--if it ever materializes? This is the reality of manufacturing today, especially in an industry as fiercly competitive as this. Offsets have been part of the equation for years, but if the size of the market can justify it, assembly makes sense. Might cause some political fallout in the country (ies) of origin, though.



"When all is said and done, more will be said than done".
User currently offlineLumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Reply 11, posted (8 years 9 months 3 weeks 2 days 14 hours ago) and read 5440 times:

More info on this topic from this article:

Airbus eyes China factory

Quote:
n Beijing, the official People's Daily has quoted Airbus officials as saying the company will shift all production of high-technology wings for the A320 narrow-body jet to China from Britain within seven years.

Noel Forgeard, a co-president of the European Aeronautic Defence and Space Company (EADS) which controls 80 per cent of Airbus, said recently that EADS did not rule out building a complete assembly line in China.

Mr Humbert said at the Dubai air show recently that technology transfer was necessary to achieve industrial cooperation. "The question is, how much of the latest technology are you able to transfer?" he asked.

"You have to make sure that you are the master of the newest technology and not give away technology which might work against you tomorrow, with competitors copying you later."

The MD-80 production in China has been referenced in previous posts on this thread, but I believe those aircraft were destined solely for the Chinese domestic market. This article, with its reference to all wing production for the A320 being shifted to China in 7 years, seems to indicate that the contemplated A320 assembly in China will be for export as well.



"When all is said and done, more will be said than done".
User currently offlineAtmx2000 From United States of America, joined Oct 2004, 4576 posts, RR: 37
Reply 12, posted (8 years 9 months 3 weeks 2 days 14 hours ago) and read 5420 times:

Quoting Lumberton (Reply 11):
The MD-80 production in China has been referenced in previous posts on this thread, but I believe those aircraft were destined solely for the Chinese domestic market. This article, with its reference to all wing production for the A320 being shifted to China in 7 years, seems to indicate that the contemplated A320 assembly in China will be for export as well.

I can't help but feel that this an indication of the time frame for an A320 successor launch. 7 years from now is 2011, a long time from now. I would expect the succesor to be in market a few years of that. Otherwise, I can't see the UK being particularly happy about the loss of wing manufacturing.



ConcordeBoy is a twin supremacist!! He supports quadicide!!
User currently offlineLumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Reply 13, posted (8 years 9 months 3 weeks 2 days 14 hours ago) and read 5402 times:

Quoting Atmx2000 (Reply 12):
Otherwise, I can't see the UK being particularly happy about the loss of wing manufacturing.

You and me both. I speculated earlier that there may be a side agreement though, that would allow the Chinese to produce this aircraft for awhile and that Airbus won't produce a successor to the A320 (Reply#5). Otherwise, wouldn't the Chinese look kind of foolish? I still think this deal will force Boeing's hand to develop the follow on to the 737NG.

[Edited 2005-12-05 00:13:57]


"When all is said and done, more will be said than done".
User currently offlineLeelaw From , joined Dec 1969, posts, RR:
Reply 14, posted (8 years 9 months 3 weeks 2 days 14 hours ago) and read 5362 times:

Quoting Lumberton (Reply 11):
Mr Humbert said at the Dubai air show recently that technology transfer was necessary to achieve industrial cooperation. "The question is, how much of the latest technology are you able to transfer?" he asked.

"You have to make sure that you are the master of the newest technology and not give away technology which might work against you tomorrow, with competitors copying you later."

Gustav, relationships based on trust are a beautiful thing!  Wink


User currently offlineAbba From Denmark, joined Jun 2005, 1343 posts, RR: 2
Reply 15, posted (8 years 9 months 3 weeks 2 days 14 hours ago) and read 5340 times:

Quoting Lumberton (Reply 13):
You and me both. I speculated earlier that there may be a side agreement though, that would allow the Chinese to produce this aircraft for awhile and that Airbus won't produce a successor to the A320 (Reply#5). Otherwise, wouldn't the Chinese look kind of foolish? I still think this would force Boeing's hand to develop the follow on to the 737NG.

You seem to presume that if Airbus is going to develop an aircraft to succeed the 320 then that aircraft will not be produced in China. I think that Airbus' idea of having production in China is simply in order to save money. Everybody move production to China - so why not aircrafts? I don't know what an assembly line worker will get in French or Germany (or the US), but in China a good guess is that the monthly salary will be around US$ 250 - and then I have added a huge premium compared to what is usually offered to more ordinary workers. As the production of the 320 class aircraft is rather low margin business it certainly would make good sense to look for cheaper production so as (at least for some time) get that margin up.

Abba


User currently offlineLumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Reply 16, posted (8 years 9 months 3 weeks 2 days 14 hours ago) and read 5325 times:

Quoting Abba (Reply 15):
As the production of the 320 class aircraft is rather low margin business it certainly would make good sense to look for cheaper production so as (at least for some time) get that margin up.

You bet it would, Abba. But the workers in Germany, France, and the UK probably have a different take on this. When Boeing was negotiating offsets in the 80's and 90's, the unions howled. Why would this situation be any different?



"When all is said and done, more will be said than done".
User currently offlineGeorgiabill From United States of America, joined Mar 2003, 580 posts, RR: 0
Reply 17, posted (8 years 9 months 3 weeks 2 days 14 hours ago) and read 5322 times:
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I thought it was MD90's that were assembled in China! This didnot bring additional business to the company except for China Eastern no other Chinese airline purchased the MD11 or MD90. This mat help airbus,but certainly will help the Chinese to further develop their own aircraft.

User currently offlineAtmx2000 From United States of America, joined Oct 2004, 4576 posts, RR: 37
Reply 18, posted (8 years 9 months 3 weeks 2 days 14 hours ago) and read 5313 times:

Quoting Abba (Reply 15):
You seem to presume that if Airbus is going to develop an aircraft to succeed the 320 then that aircraft will not be produced in China.

Apparently you missed the part Humbert was saying about not transferring the newest technology to potential competitors. The A320 wing is primarily metal. The A320 successor's wing is likely to be mostly composite. Composite winged commercial airliners are new technologies, and I don't see Airbus transferring that technology to China.



ConcordeBoy is a twin supremacist!! He supports quadicide!!
User currently offlineMymorningsong From United States of America, joined Sep 2005, 98 posts, RR: 0
Reply 19, posted (8 years 9 months 3 weeks 2 days 13 hours ago) and read 5276 times:

http://news.yahoo.com/s/afp/20051204...oDMTBjMHVqMTQ4BHNlYwN5bnN1YmNhdA--

Interesting article. China about make an order for about 100 A320's right after Airbus agrees to move production to China. You scratch my back...

[Edited 2005-12-05 01:29:48]

User currently offlineAbba From Denmark, joined Jun 2005, 1343 posts, RR: 2
Reply 20, posted (8 years 9 months 3 weeks 2 days 11 hours ago) and read 5192 times:

Quoting Lumberton (Reply 16):

You bet it would, Abba. But the workers in Germany, France, and the UK probably have a different take on this. When Boeing was negotiating offsets in the 80's and 90's, the unions howled. Why would this situation be any different?

Valid point! However, I do believe that the unions is Europe do not have the power they used to have - in particular not in the UK after the Iron Lady. So even if this in the past would have been a major issue, it might not be such a big problem today.

Quoting Georgiabill (Reply 17):
I thought it was MD90's that were assembled in China! This didnot bring additional business to the company except for China Eastern no other Chinese airline purchased the MD11 or MD90. This mat help airbus,but certainly will help the Chinese to further develop their own aircraft.

But wasn't the MD90 not already on its way out when (some of) its production was moved to China? I do not think that you can save a product by moving the production of it to China!

Quoting Atmx2000 (Reply 18):
Apparently you missed the part Humbert was saying about not transferring the newest technology to potential competitors. The A320 wing is primarily metal. The A320 successor's wing is likely to be mostly composite. Composite winged commercial airliners are new technologies, and I don't see Airbus transferring that technology to China.

I saw that. However, when the production is moved (seven years from now) and a successor for the 320 is developed (I don't believe that this is going to be in the very near future), I wonder if these productuion techniques which today are all new will be considdered that new any longer? There might then be "new things" in parts (and in how they are designed) that will remain outside of China (and for Boeing's case Japan).

You could also well imagine that aircrafts at that time is build even more in elements than the 787 will be and that the final assembly will be kept in Europe but the production of big and labour intensive units will take place in China?

Finally there is also the point that Airbus by including China is also changing the rules of the game so that production techniques that will be appropriate in the West because they save labor will be much less interesting when production is taking place in places where labor costs are very low.

I think that this is a very complicated matter! Like to hear your comments!

Abba


User currently offlineN79969 From , joined Dec 1969, posts, RR:
Reply 21, posted (8 years 9 months 3 weeks 2 days 9 hours ago) and read 5130 times:

Quoting Atmx2000 (Reply 12):
I can't help but feel that this an indication of the time frame for an A320 successor launch. 7 years from now is 2011, a long time from now. I would expect the succesor to be in market a few years of that. Otherwise, I can't see the UK being particularly happy about the loss of wing manufacturing.

I agree with this idea. Airbus is not going to move any cutting edge production to China and nor can they afford to offshore jobs from EU countries without some sort of protections. There is also a problem of intellectual property protection if they were to transfer the latest and greatest to China. This could be a good move for Airbus. I wonder what the labor unions will say though.

Who knows...20 years from now A320s could be rolling out of Chinese factories the way the VW bug kept rolling out of Mexican factories for many years...


User currently offlineGrantcv From United States of America, joined Apr 2005, 430 posts, RR: 0
Reply 22, posted (8 years 9 months 3 weeks 2 days 8 hours ago) and read 5101 times:

If production of airliners moves to China, then what will China buy from the west to try and even out the balance of trade? I sometimes wonder how this is all going to wind up eventually - all manufacturing in China, all service jobs in India. Maybe we should look into outsourcing CEO's to China.

User currently offlineAbba From Denmark, joined Jun 2005, 1343 posts, RR: 2
Reply 23, posted (8 years 9 months 3 weeks 2 days 8 hours ago) and read 5083 times:

Quoting Grantcv (Reply 22):
If production of airliners moves to China, then what will China buy from the west to try and even out the balance of trade? I sometimes wonder how this is all going to wind up eventually - all manufacturing in China, all service jobs in India. Maybe we should look into outsourcing CEO's to China.

Many of the luxury products sold in China in its new and glittering shopping malls is produced cheeply in China and sold very expensively in China after having been a short trip abroad.

China dosn't need to do the final assembly as new techniqies are introduced (the 787). Let them do big labor intensive units that now can be engineered with more of a view to efficiency than to ease of production.

ABBA


User currently offlinePlanemaker From Tuvalu, joined Aug 2003, 6195 posts, RR: 34
Reply 24, posted (8 years 9 months 3 weeks 2 days 7 hours ago) and read 5054 times:

FYI, Bombardier is trying very hard to get Chinese government approval to have AVIC II as a risk sharing partner on the C-Series. AVIC II would be responsible for the fuselage.


Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
25 Post contains images Astuteman : The "worked example" of building sections of 787 in Japan seems to indicate that you may well be right, AirFrnt. Obviously the idea will go against t
26 Lumberton : One point that seems to have been missed in the discussion, IF Airbus transfers ALL 320 wing production to China in seven years, and launches the next
27 HiJazzey : I don't know, it might well be the end of UK manufactured wings for Airbus. Didn't BAe want out of Airbus so they can enter the American military mark
28 Post contains images Lumberton : Hello, HiJazzey. I see your point, but if that were to happen the volume of work lost couldn't be made up by military work. However, if they were to c
29 A319XFW : As part of the restructuring, BAE owns 20% of the total Airbus company, not just airbus UK it used to. Part of the deal that if BAE wants out is that
30 Post contains images Scbriml : I doubt Airbus would paint themselves in to that corner. Unless, of course, China were to purchase a ridiculous number of A320s. Say 1,000+?
31 Lumberton : Yes they are. Apparently this outsourcing is catching on, huh? I've always been taught that imitation is the highest form of flattery; undoubtedly, A
32 Bigsmile : This is interesting. I have been in many briefs at Airbus Broughton, and the only work going to Xian in china is the wingbox and various detail parts.
33 B707321C : Why should this delay the development of a successor to the A320? The auto industry are having old model production in China and other places, while
34 A319XFW : From what I hear is that the quality had to be such that they could fit the wings to any aircraft and not only ones going to China. But I guess that'
35 Barbarian : This does seem like old news warmed up. AUK has been working with China for some years to transfer Single Aisle wing boxes (not equipped) to Xian upto
36 A319XFW : I'd say they would probably be equipped wings now, as it would be foolish to getthem back to Broughton to be equipped and then back to China to be ass
37 PEK18R36L : This has been a great discussion. Just a few more tidbits to throw in from my seat here in the Middle Kingdom: 1. IIRC Boeing has been manufacturing t
38 AirFrnt : What a lot of people fail to forget is that Airbus is still at least partially owned by the governments of Europe. I would expect them to scream blood
39 Leelaw : Welcome, a fine first effort. Interesting, perhaps you could elaborate on this point?
40 N328KF : Airbus' direct ownership structure is: EADS: 80% BAe: 20% However, EADS' ownership structure is: DCX: 30.17% SOGEADE: 30.17% Public: 29.69% SEPI (Spa
41 Post contains links Stitch : The Seattle Times did a three-part series on Boeing, Airbus and China a few months back. The third and final piece talked about offshoring/outsourcing
42 PEK18R36L : Leelaw, my point is not that Chinese manufacturers cannot assemble aircraft. Of course they can - they've been doing that for years with fighters, tur
43 Eha : In all cases, it will never be presented as a transfer of production capabilities but rather additional capabilities, which makes sense given the tre
44 N79969 : Very interesting and thoughful posts. Nice work. I think Airbus has been doing their homework and studied the situation including the MDD experience
45 YULWinterSkies : And all unemployment in the Western countries. Thanks to our patriotic CEOs and shareholders!!!! However I do not think there is really too much to w
46 PEK18R36L : Things do change drastically and quickly here, to be sure. I go away for a three-week vacation and notice the changes when I return. In essence you a
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