EconoBoy From United Kingdom, joined Mar 2004, 157 posts, RR: 0 Posted (9 years 3 months 3 weeks 3 days 15 hours ago) and read 2084 times:
In their rush to win bragging rights regarding aircraft orders in the developing markets of India, China, aren’t Airbus and Boeing in danger of giving away their family silver?
Usually, the really big orders come with strings attached, like the setting up of an assembly line in the country buying the planes. Airbus has apparently agreed to move the wing assembly from UK to China as a condition of the recent order for A320s (bad news for British workers, if true). The wings are probably the highest technology part of a plane (after the engines), and so what if the technology is more than twenty years old? It still gives the Chinese a huge push up the steepest part of the learning curve.
Maybe Asian countries need to buy planes from the west at present, but how long before A & B are being undercut by A320 and 737 clones, all made possible by the technology so freely given away? Surely, for their own sakes, A & B need to take a long-term view of how things will pan out, instead of being beguiled by short-term gains and obsessed with winning a glorified p*ssing contest?
N328KF From United States of America, joined May 2004, 6517 posts, RR: 3
Reply 1, posted (9 years 3 months 3 weeks 3 days 15 hours ago) and read 2051 times:
Quoting EconoBoy (Thread starter): In their rush to win bragging rights regarding aircraft orders in the developing markets of India, China, aren’t Airbus and Boeing in danger of giving away their family silver?
Did Boeing put a 787 assembly line in China? No.
When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' T.Roosevelt
Breiz From France, joined Mar 2005, 1932 posts, RR: 2
Reply 2, posted (9 years 3 months 3 weeks 3 days 15 hours ago) and read 2045 times:
The airliner industry is not exception in the present economical environment.
The balance was, is and will always be between the interest of the companies and the interest of the workers (nothing new).
When some companies, like Airbus, were partly state owned, the influence of the workers was stronger. Now, it is balance sheets which matter.
This being said, the next step is the strategy to maximize the results.
Companies do not even wait for big contract like the Chinese 150 A320s to outsource work to cheaper labour countries.
If we take this case of a potential assembly line in China, there is several things to consider:
- China is a market big enough to sustain its own production,
- Chinese technology, at least on airliners, has not reached the level of A&B,
- China could most probably do with second rated airliners, but that would be at a cost and certainly not fast enough to go along their booming rate these days,
- an assembly line is not a research, manufacturing unit. It only puts together elements fabricated elsewhere (abroad or locally),
- to assemble Airbus wings in China does not mean to outsource the knowledge on how to design wings,
- to assemble A320 in China does not mean to give China the A350/B787 level technology,
- China may develop a clone of the A320 but that would be outside any commercial agreement or practice (a sort of Il-2) which would send very strong negative political signals. That may be a choice in the future, but not according to today's politics,
If Airbus go along with this assembly line in China, it means a better door to the Chinese market (past examples show that one must not foul oneself on bright futures), a controlled potential competitor (which is also a giant in all Asian questions at least).
It is anyway a gamble as nobody knows what the Chinese will do in 10 or 15 years (not even the Chinese!)
These are just a few lines thrown on this white space in a matter of minutes.
Pardon me if it is not reflected enough.
NAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 3, posted (9 years 3 months 3 weeks 3 days 15 hours ago) and read 2045 times:
Fair question, EconoBoy, and worth a discussion. But I don't see that either firm has much alternative, for three reasons:-
1. It is almost impossible to keep technology secret, even in the military field - leave alone the civil field. Leaving aside the option of just attracting some of your staff to work for them instead, the developing countries could probably learn most of what they needed to know just by buying and analysing your aeroplanes.
2. The key issue is to keep costs competitive. Technological superiority is only one part of the marketing game. If you try to keep your technological lead by 'building local', you may succeed for a time; but inevitably your competitors, by being able to offer their (adequate) products cheaper, are likely to overtake you in the market anyway, just on price.
3. Most managers are on a fairly short leash. The 'life expectancy' of an executive who fails to deliver a reasonable level of commercial success, year on year, is probably three years or less. So it's a bit hard to ask them to 'take a longterm view' by turning down opportunities to sell aeroplanes, and at the same time lower costs and increase profits, because the policy might have undesirable consequences ten or twenty years hence.
[Edited 2005-12-07 14:22:26]
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
Scbriml From United Kingdom, joined Jul 2003, 13429 posts, RR: 46
Reply 5, posted (9 years 3 months 3 weeks 3 days 15 hours ago) and read 2020 times:
If, and it is still a very big if, Airbus does establish an A320 production line and wing manufacturing plant in China, they will hardly be giving away the family jewels. By the time it happens, the technology involved will be over 25 years old. It's European plants can then move on to producing whatever new technology is involved with the A320 replacement.
Boeing's position is slightly different in that they have shared out work on their latest project. Offshoring wing production to Japan is a bigger "risk" IMHO, since it gives Japan free access (well OK they bought some 787s) to the very latest in wing technology.
Time flies like an arrow. Fruit flies like a banana!
Pihero From France, joined Jan 2005, 4799 posts, RR: 77
Reply 7, posted (9 years 3 months 3 weeks 3 days 14 hours ago) and read 1989 times:
You are posing a very valid question which concerns both Airbus and Boeing.Technology transfer is and will be even more part of all the contracts with upcoming countries and some which lag behind in terms of a particular technology .
Just a few examples : the high speed train technology transfer to South Corea allows the RSC to bid on international markets with their own product...Japan which has gone from some time on designing local airplanes so far without any exports but they will be learning...India is coming along with technology both from western Europe and Russia...China, which has now become the leading exporter of computer components...
In my opinion, one has to make a difference between a/ design and b/ manufacture and go even further between a/ assembling techiques and b/ advanced manufacturing process.
The A-320 technology is now more than 20 years old and that's what the chinese will get with an assembly line. They won't have access to the latest wing technology nor the advanced manufacturing processes (advanced airfoil computer designs, composites, bonding techniques...etc...)
In all the examples I cited above, the top end of a product, i.e. R&D has been retained by the most advanced industrial states (Microsoft is making 15 times more money on each software CD than Taiwan...through copyrights, mainly ).
As a matter of opinion, Boeing is running more risks with the 787 than Airbus with this contract. The reason is that Boeing has, for cost reduction purposes, given the design of major structures to foreign countries (for composite structures, to Italy and Japan).Though immediately profitable, in the long term the economics do not seem too sound as these parts will appear on the US balance of trade as imports, and that without counting the loss of technical R&D in the US, nor the manufacturing jobs lost.
It has been estimated that the chinese market for single aisle airliners will be in excess of 1500 in the next 20 years and I understand that the China assembly line will cover that need. Please also note that the contract is for [b]assembling[/] not for complete manufacturing, the way car makers are doing with low wages countries.
Finally, as BAe is one of Airbus major shareholders, I really do not think they would run the risk of a major industrial dispute on the delocalisation of the Broughton plant.
My opinion is that they are already thinking of the next technology generation they could sell after 30 years to China, after they've made a lot of profit.
Barbarian From United Kingdom, joined Aug 2005, 54 posts, RR: 0
Reply 9, posted (9 years 3 months 3 weeks 3 days 12 hours ago) and read 1920 times:
The offload of work to China is of little risk to the UK site's. The original agreement was to enable rates that would have required a disproportionate amount of investment in buildings and tooling to complete at Broughton. The design and technology is 25 years old, and with the successor to the Single Aisle family just around the corner, freeing up resources to manufacture in the UK is a must.
A agree with some of the earlier comments on the 787 in Japan, whilst it is designed by Boeing, the manufacturing technology and skills will be lost, and if this happens on their next product how long before Boeing lose that manufacturing capability and become victim to a Asian competitor? Much more of a risk than the Airbus strategy IMHO