China’s Western aviation recuitment alarming

The news that China’s AVIC is recruiting Western executive talent for its aerospace subsidiaries is alarming.

Long-time readers of this column and our main website know that we’re concerned about Western technology transfer by Airbus, Boeing, Bombardier and Embraer to China, Japan and Russia as the Big Four pursue outsourcing. We’ve seen each of these countries produce regional airliners and China and Japan announce plans for a 150-seat jet.

None of the regional airliners are likely to be commercial successes, but we think China’s ARJ-21 and Japan’s MRJ are probably proving grounds for the larger jets. Japan’s Heavy Industry that are industrial partners to Boeing’s 787 program openly said they are using 787 wing technology they developed for the MRJ and the planned 150-seat jet.

Granted, China’s airplanes are unlikely to find much of a market outside China but the country is a major customer of Airbus and Boeing–and every indigenous plane ordered by the airlines is one less ordered from Airbus and Boeing, both of which have long counted on the reliability and strength of the growing China air traffic to bolster order books.

Now with this news that AVIC wants Western executive talent for 13 subsidiaries, this is more than ominous. Not only will this further help AVIC develop a 150-seat jet, its subsidiaries are military suppliers to China’s growing armed forces. There simply is no way that China’s military base will not benefit from this commercial talent.

We know the Chinese culture reasonably well. We’ve been to China many times and have studied its growing Blue Water Navy plans, as well as some of the historical geo-political issues that shaped its view of the West. The Chinese take a long view of development.

It used to be a cliche that while American financial markets are concerned about the next fiscal quarter, the Japanese are concerned about the next quarter century.

The Chinese take a view for the next century.

With all the layoffs and anticipated layoffs in the West’s aerospace industry, hungry talent may well be attracted to a growing Chinese aviation industry.

Mark our words: this is a threat to the West’s commercial aviation industry and a way for the Chinese to build its military industry. This is an incredibly smart move by the Chinese. But the West needs to think twice about it.

2 Comments on “China’s Western aviation recuitment alarming

  1. The major western producers made their moral decison on this with their balance sheets instead of their brains and concience.

    Now individuals in the industry get to make the same choice, and my feeling is that they will simply make the same call but for different reasons.

    Having seen their livlyhoods given away, the prevailing atttiude may well be, ‘screw them, the chinese are offering me what my own company is and has been taking away for years.”

    The Aerospace industry may well suffer a brain drain due to disaffection in the enginerring and technical ranks. Loyalty is a 2 way street.

    On the executive/managerial side, the same will happen for a different reason: It will just be business as usual. Money talks.

  2. Judging from this BBC article, the Obama Administration is concerned as well.
    “The president promised to roll back tax cuts for the very wealthy and businesses that move jobs overseas.
    http://news.bbc.co.uk/2/hi/business/7910335.stm

    If this happens it will likely remove the incentive for all these “superstar” CEO to outsource jobs in pursuit of quarterly profit targets. Good grief! Some of these “wunderkind” may be forced to plan for the long term!

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