Airbus globalises production with China plant

[Naveed Yaseen]

PARIS: European aircraft giant Airbus will take a major step towards the globalisation of its production on Sunday with the opening of a new assembly line in the Chinese port of Tianjin.

The plant is the firm’s first outside of Europe and gives Airbus a foothold in a market hungry for new planes and hotly contested by its US rival Boeing. “Our goal is to produce four planes per month by 2011, but I would not be surprised if we achieved this earlier,” Airbus CEO Thomas Enders said recently. The Tianjin plant was constructed 100 kilometres (62 miles) outside Beijing in a port city and is a carbon copy of Airbus’ site in Hamburg, Germany, which assembles the A320 jet, the group’s family of single-aisle airliners.

Work began on the site in August, but the official opening was delayed so as not to clash with the Beijing Olympics. Airbus sales have been under pressure from the recent strength of the euro against the dollar, rising fuel prices and the economic downturn. Breaking into the huge Chinese market, where strong domestic growth has helped insulate the economy from the chaos on the world market, has been identified as key to keeping the European supplier competitive with Boeing.

The American manufacturer has historically dominated in China, but Airbus has a growing market share and has stolen a march with the Tianjin plant. Boeing makes aircraft components in China but has no assembly lines outside the United States. Nevertheless, Airbus’ global expansion strategy has worried European unions, which fear the outsourcing of jobs to cheaper regions, and concerns have been raised about the transfer of high-technology knowhow to a strategic competitor.

But these doubts are overblown, experts insist. Firstly, Tianjin is not designed to replace exports to Airbus’ existing markets, but to supply China, which the firm estimates will soak up 2,800 planes over the next two decades, 11.6 per cent of global demand. Secondly, the plant is an assembly line for components manufactured elsewhere, a process which represents only a small part of the work.

“Psychologically it seems important to see a plane roll off the production line, but the line represents only three to four per cent of its total value,” estimated one expert in the sector. The new factory represents a powerful political gesture in a promising market, but does it create a risk that Airbus’ cutting-edge engineering will be pirated by Chinese competitors.

After all, in May the Commercial Aircraft Corporation of China (CACC) opened its doors. By 2020 it plans to be building a 150-seat airliner, a direct competitor to the A320, at a plant in Shanghai. Industry experts, however, are unconcerned.

“Theoretically, by dismantling the components that are sent them with the wiring already attached, the Chinese could get access to technology they have not yet mastered themselves,” said Aviation Author Pierre Sparaco. “But, in principle, they could just as easily do that to an A320 already flying in their fleet,” he added.

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