By Bjorn Fehrm
January 3, 2022, © Leeham News: When the COVID-19 Pandemic started, it was tough to predict its impact on world air travel and how long the downturn would last.
The aircraft OEMs are at the top of a supplier pyramid of hundreds of companies and millions of parts. The prediction of airliner output at the end of this chain is critical for all, but most for suppliers. The suppliers have strained their liquidity to expand the production at the demand of the OEM.
A downturn in deliveries means less money, which forces sensitive suppliers into a liquidity crisis. Brake moderately, and the suppliers can handle it. Brake hard, and they can’t, or brake a bit and then harder, and it’s as bad.
Airbus managed the reductions well, and with an intact supplier chain, 2022 will be about how hard to step on the throttle as the Pandemic isn’t done yet.
Dec. 22, 2020, © Leeham News: If you get a chance over the next few weeks – in between binge-watching The Queen’s Gambit, putting up the 79 extra feet of Christmas lights you ordered this year and figuring out how to buy surprise Christmas gifts for your spouse when you have a joint Amazon account – you should take 90 minutes to watch this video from our friends at the International Association of Machinists District Lodge 751.
The Machinists on Dec. 8 hosted (on Zoom, of course) a high-level panel discussion about the state of the aerospace industry and Washington state’s role in it, featuring a whole bunch of Brand-Name People Who are Smarter Than Me(c).
They shared their insights for those of us coffee-drinkers who are trying to read the tea leaves to divine what Boeing’s next moves should be as it tries to get back on its feet – and what the implications are for its home state.
The problems for Boeing are obvious, and the solutions are pretty clear – but doing the smart thing would require a major cultural shift from an executive team that’s locked into a 1990s vision of how business gets done.
By Bjorn Fehrm
April 22, 2020, ©. Leeham News: With the COVID-19 meltdown of airline traffic and aircraft deliveries, we place a special focus on the airliner industry supply chain in the next months.
Hexcel Corporation reported its 1Q2020 yesterday. In addition to the absence of MAX deliveries for a year, the mounting COVID crisis meant revenue was down with 11% year on year and profits 40%. The merger with Woodward Inc. is off. “This is the time for crisis management, not a merger,” said management.
By Bjorn Fehrm
November 6, 2019, ©. Leeham News at Aviation Forum Munich: The second day of Aviation Forum Munich had an interesting presentation from Boeing’s VP of Sourcing, Jody Franich.
He described the One Boeing approach for Manufacturing and Sourcing and how Boeing is moving away from its supply chain Partnership for Success program, with the supplier cost down focus replaced by a more long-term cooperation model with a mutual benefit focus.
By Bjorn Fehrm
November 5, 2019, ©. Leeham News at Aviation Forum Munich: The Aviation Forum kicked off in Munich today, a yearly production and supply chain event started by the Hannover based Institute for Production Management nine years ago.
Today’s conference themes were How the OEMs benefit from Supplier Innovation, Additive Manufacturing trends and discussions around Outsourcing and Insourcing.
By Bryan Corliss
May 10, 2019, © Leeham News: Senior officials of Mitsubishi Aircraft Corp. said they’ll announce a new concept to replace their proposed MRJ70 at next month’s Paris Air Show. But they’re keeping details to themselves until then.
“We’ve got a couple rabbits in our hat,” said Alex Bellamy, the chief development officer for the MRJ program. “We’d like to keep them in our hat for now. But rabbits have a habit of bouncing.”
Bellamy spoke with a handful of industry reporters Friday at a roundtable following the formal grand opening of Mitsubishi Aircraft Corp America’s new office in Renton (WA). The event – which included the ceremonial opening of sake barrels with hammers–attracted senior executives from MITAC’s headquarters in Nagoya, Japan, and local business and government leaders.
Mitsubishi is flight-testing the 92-seat MRJ90 in the skies above Moses Lake (WA). But in Nagoya, engineers are working on a clean-sheet design for a 76-seat, three-class regional jet.
It’s what the market is calling for, Bellamy said, and right now, there’s a declining number of competitors willing to provide it.
March 14, 2019, © Leeham News: Airbus’ effort to slash supply costs for A220 production is “an ongoing exercise at this point,” Joe Marcheschi, Airbus’ head of procurement in North America, told LNA in an interview last month.
“There are no specific, let’s say, achievements yet,” he said. “We are working closely with our supply chain.”
It takes time to squeeze cost out of the supply chain, he said. “We only took over July 1. That’s when we got full knowledge of the existing contracts.”
In January, Philippe Balducchi, head of the Airbus-led venture overseeing production, told journalists that the aerospace giant aims to realize “significant double-digit” percentage cost reduction. He indicated that most of the savings likely would come from the supply chain, according to news reports.
“Look, the airplane is absolutely fantastic—it just costs a lot of money,” Marcheschi said. “Now, we have to find a way to reduce the cost.”
By Bryan Corliss
February 19, 2019, © Leeham News: Machinists Union members who work at Cadence Aerospace-Giddens in Everett, WA, voted overwhelmingly to approve a new three-year contract with the company.
Ninety percent of those who voted Monday were in favor of the deal, according to the IAM’s District 751. (IAM 751 typically does not release vote totals in its contract elections, only the percentage voting in favor or against.)
IAM 751 President Jon Holden called the contract a “positive agreement.” The union’s negotiating committee called the deal “one members can be proud of and can continue to build upon into the future.”
Oct. 16, 2018, © Leeham News: Puget Sound-area Boeing suppliers are anxiously awaiting an Oct. 30th meeting at the Lynnwood Convention Center. The aerospace giant has invited dozens of suppliers to the meeting.
Attendees have been required to sign non-disclosure forms in advance, though Boeing has been tight-lipped about what exactly it plans to discuss with them. Each company has been limited to sending only two representatives, according to several suppliers attending the meeting.
“It doesn’t matter if you’re a machine shop or a big (tier one supplier), you can only send two people,” said an executive at a Puget Sound-area supplier. The supplier spoke on condition of not being named for fear of losing business with Boeing.
Boeing has indicated that the conference is to discuss sweeping changes to how the terms and structure of its supply chain contracts. But it has revealed few details, according to executives at two suppliers.
“You know it’s bad if they won’t tell you what it’s about,” one of the executives said.