Not So Fast, Comac: C919 is DOA, But Boeing and Airbus Duopoly Dead Anyway

by Lisa Reisman on

Never in the four years since we launched this site have we seen such a flurry of spirited debate over multiple stories that appeared last week. To prove the case, when we see someone take issue with one of Nate’s pieces we have to assume Mars went into retrograde or at least something like that. Many of the comments came as a result of Stuart’s story last week, Boeing and Airbus Put on Notice: China’s Comac Breaking Up the Duopoly Party.

The comments ranged from my own (“I wouldn’t set foot on a Chinese plane until China had a long history of a strong safety record”) to “It should not be all that difficult for them [China] to overtake America in many fields, considering that it [US] can’t wean itself off a cumbersome medieval measuring system. Boeing’s much-delayed Dreamliner is a perfect example of what happens when you outsource precision work to metric countries that have neither the feel nor a clue about that obsolete anachronism. Airbus has no problem manufacturing in China and outsourcing around the globe because they speak all the same measurement language” — along with a slew of comments in between the two.

The “measurement comment on first blush appeared outrageous to us, so we placed a few calls to industry contacts to gain better insight into the validity of that argument. One industry veteran said, “This was a national topic, I believe in the 70s. I wish we had converted then. We would be through the pain by now. It does create issues, but many foreign companies have been successful at providing goods based on our medieval system. Or else we would not have accumulated the huge trade imbalance!

David Yoho, a senior vice president at Vulcanium Metals, a titanium supplier to the aerospace industry, gave us his thoughts on the C919. “The C919 will not compete with the 737 or A320,” he said. “The C919 uses mid-80s Airbus technology and serves fundamentally as Comac’s ‘learning curve.’ The real question becomes the next plane. The A320neo, Bombardier C-Series, or 737 re-engine would make far better sense to a world-class carrier as evidenced by the current backlog.”

Yoho also shared with us that it took about two years for MIG production to shift from Russia to China. In addition, China’s high-speed trains “are a nearly exact copy of Japanese technology, though he acknowledged the trains had a few cosmetic changes along with a tweaked engine. Business planning cycles in China, like the rest of the world, span decades into the future, according to Yoho. With regard to China, Yoho said, “Although I don’t see China having the luxury of the next ten years to get their quality figured out, global consumers do have patience. The Chinese have studied the Japan/Russian models to competing globally and will certainly have their nuances, but have business cases to learn from.

Certainly both Boeing and Airbus recognize that China will have its own aerospace production industry. Both firms already have some level of manufacturing in China today, according to Yoho. “A political element exists for these firms as they need to create jobs in those markets to sell planes in those countries.

As for the comment on America’s archaic measurement system, Yoho had this to say: “Boeing is a leader in global supply chain management. The comment below has no basis in reality. [I] Suggest he picks up a copy of the ËœWorld is Flat’ by Thomas Friedman.

–Lisa Reisman

Comments (5)

  1. eric says:

    Re industry veteran: “It does create issues, but many foreign companies have been successful at providing goods based on our medieval system. Or else we would not have accumulated the huge trade imbalance!”

    Sorry, I have to disagree with you. The main reason for America’s huge and never shrinking trade imbalance is that metric countries are not interested in buying inch based goods. Let me give you one simple example why. No farmer in a metric country would buy an American harvester, or any other inch based piece of machinery for one good reason, if a bolt breaks, he has to go to the supplier of that machine because his nearest hardware store does not stock inch screws. If it is a metric machine/appliance it is readily available. Your astronomical trade imbalance stems predominantly from imported goods made in metric countries (China, Germany to name but two) that are dumbed down for Americans into inches. To wit, your automotive industry changed to metric in the mid 70’s, but you would not know that if you read their advertising material?

    “As for the comment on America’s archaic measurement system, Yoho had this to say: “Boeing is a leader in global supply chain management. The comment below has no basis in reality. [I] Suggest he picks up a
    copy of the ‘World is Flat’ by Thomas Friedman.”

    Well, well, that is the typical answer of a man/woman closing his/her eyes to reality. Get real, if Boeing is a leader in global supply chain management is sets a dismal standard, as the Dreamliner testifies. Face the fact, Boeing had its time in the sun when no one was around to show them how its done and that my friend you can apply to most American companies. For example cars and what have you. Sadly, your defence of Boeing seems to be based on patriotism rather than fact.

    And please don’t start me on Milton Friedman and any other Nobel price winning American Economist, they just confirm that Homo sapiens is an evolutionary misfit!

    1. admin says:

      Eric, you certainly raise some interesting points. I wasn’t in the thick of the metric debate back in the 70’s but I know that both John Deere and Caterpillar are major US based exporters, Caterpillar, especially. I think it would be very interesting to see if one could determine the key causal factors (as opposed to correlated factors) that have led to our trade deficit. My hypothesis is that the deficit has more to do with our insatiable consumer demand fueled by loose monetary policy and the ability of the consumer to borrow as much as he/she pleased and second, by undervalued currencies relative to the dollar, particularly China and finally, our lack of domestic fuel options which force us to import oil to meet our requirements.

    2. Paul says:

      I am sorry Eric but you are full of it, Cat does great every year and the main thing pushing their growth up is exports to China and Europe. You quite literally are putting way too much weight into something that doesn’t carry much weight at all.

  2. eric says:

    Thanks for your reply and my apology for being late.
    Yes, John Deere and Caterpillar are prolific US exporters because their products are almost fully metric. As to your TRADE deficits, they increased steadily from the 1970 ‘s on, long before China swamped your market with cheap goods. In those days America bought most of its capital goods from Japan and Germany like cars, machine tools, audio equipment and a host of other products. You had a recession in the mid 70’s and there was serious talk as to which economic model America should adopt, the German, or Japanese one? It was at that time that some bright Americans realised that the world was not interested in inch based goods and initiated a push for metrication to make exporting to the metric world easier. It started quite well, but its implementation was watered down with ever more exemptions till the road contractors finally killed the original bill with the help of some people’s representatives altogether in the late 80′.
    The irony in all this is that America can’t function properly without the metric system, so why stick to an outmoded measuring mode that disadvantages everyone and especially your children? One US study done many years ago by Richard Phelps shows that US school children are about a year behind in mathematics compared to their metric peers and all that at great financial cost. So why burden your children with learning a cumbersome measurement hodgepodge that wastes a lot of their precious time only to find out later on that hardly anybody around the globe understands their medieval measurement language? Trade deficit

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