This is the second of a two part series. The first post can be found here.
The second major trend allows us to stay with Bombardier’s C Series for illustration of how the shift of first minor components like forgings and semi finished metals, then sub components like doors and hatches, and now major components like whole fuselages are moving eastwards. Encouraged by the twin drivers of demands from emerging markets to manufacture a certain percentage of new programs in country in order to qualify for sale to state airlines along with the lower labor costs of assembly in such markets aircraft makers such as Bombardier, Airbus and others are setting up production facilities in China. The production fuselage for the CSeries will be built in Shenyang, China by Shenyang Aircraft Corp. (SAC), a subsidiary of the state-owned China Aviation Industry Corp. (AVIC) who already has aspirations to manufacture their own 70-100 seat regional jet called the AJ-21.
The move to joint ventures with Asian wannabee aircraft makers is expanding into research and development and design. While the major metals manufacturers like Alcan currently have dominance of metal supply that too will change as emerging market mills develop comparable alloys that meet international aerospace norms. Forging, casting and extrusion mills in China, Russia and Brazil have done it, rolling mills are not far behind. Distributors have not been slow to realize this trend and have moved in to service local demand in emerging markets. Ryerson and Thyssen among others have had successful distribution operations in China for a number of years.
The process is unstoppable. As manufacturing has globalized, aerospace has remained dominated by western companies. Considered an integral part of the knowledge it has not been seen as under threat from developing countries but while Boeing and Airbus are not about to decamp from Seattle or Toulouse to set up shop in Shanghai there will be a growing trend to source ever more complex components from Asia and to build Asia’s aircraft in Asia. With Asia and the Middle East providing the vast majority of new aircraft sales what does that say for the future of aerospace manufacturing and exports from North America and Europe?