Flush with orders, aerospace industry retools for future
By Alwyn Scott
PARIS (Reuters) - As airplane makers gathered outside Paris to show off their newest high-tech jetliners on Monday, a less-heralded technology story was unfolding back home on the factory floors of the world's leading aerospace firms.
The planned introduction of at least half a dozen new plane designs that push the boundaries of flight performance has given the industry its biggest opportunity in a decade or more to automate factories, add new techniques and reduce costs.
In five years, airplanes entering service may have an engine with parts delicately fabricated by an industrial 3-D printer, a paint job applied by a robot and rivets installed by machines.
"The big next leaps will come on the production side - how do we actually produce these airplanes faster, more efficiently, with more automation?" Ray Conner, CEO of Boeing's (BA.N: Quote) commercial airplane division, asked at the Paris Air Show on Monday.
Unlike the car industry, aerospace has been slow to automate. Relatively low production - Boeing and Airbus EAD.PA produce about 1,200 jets a year - often does not justify the big investments required. Complexity and regulation also limit change, meaning much of a jet is still handmade.
But now, flush with a record number of jet orders, the industry is gearing its factories to produce at high volume and low cost. More than 35,000 jets worth $4.8 trillion will be sold in the next 20 years, according to Boeing's forecast.
Cutting costs is the only way to improve margins in a business where steep price discounts can mean selling at slim profit or a loss to win orders.
Since 60 percent to 70 percent of a plane's materials come from suppliers, manufacturers also are pushing them to innovate, and rewarding those that do by splitting the gains. Continued...