A Harbinger of things to come

A joint venture (JV) with Chinese partners – Airbus holds a 30 per cent stake – it manufactures and assembles composite elevators, rudders, maintenance doors and belly fairing parts for the A350 XWB and is the sole supplier for these components. Also assembled at Harbin are elevators for the single-aisle A320 family. In June, the facility delivered its 1000th A320 rudder.

Why Harbin? The reason is historical, says head of HMC, Olivier Guillon.

“Airbus was looking for a partnership to create a joint venture (JV)… Airbus Helicopters had been working with the Hafei Aviation Industry Company Limited (HAI) in Harbin for probably 15 years on helicopter programs. This is why it was decided to create a JV with HAI.

On top of that, Haileinjong province where Harbin is located is a province which wants to develop industry and was already quite industrialized.”

HMC, explains Guillon, started in 2011, the result of a commitment taken by Airbus several years before to allocate 5 per cent of the aerostructures of the A350 program to China. HMC is responsible for 80% of that commitment. The remainder, building spoilers and droop panels, is carried out by Commercial CAC, a subsidiary of Chengdu Aircraft Corporation.

At Harbin, there has been a strong ramp up in production over the past few years.

“In three years, basically we have multiplied the turnover of the company by eight. This year we should have some $80 million of turnover. We were doing only $10 million in 2014 and if everything goes well, in 2019 we should be around $150 million per year of turnover.”

During that time staff has also doubled to around 700 and the size of the facility has been increased by 7,000 square metres to 42,000 square metres, with some $25 million being spent on state of the art composite manufacturing machines and all the jigs for the assembly.

“We are far from finished. Today, we are producing seven sets of A350 parts every month but the final rate expected is around 12 so we have another step to achieve. This will be done in the coming two years. On the single aisle rudder, we are now delivering at the rate of 48 a month when we were averaging four per month three years ago. We have significantly increased the production of the company and the quality is fully comparable with that in Europe.”

In the factory at the Harbin plant, with highly trained Chinese workers painstakingly building up layers of composite material to form the parts which will ultimately be cooked in large ovens and fully assembled ready to fit, composite shop floor manager Antonin Alamelle is clearly proud of the work that is being done. He says Aviation Industry Corporation of China (AVIC), the state-owned aerospace and defence conglomerate, has described HMC as the most advanced composite parts producing facility in China. He explains that the finished product is taken from Harbin to the port of Dalian some 900 kms away to be shipped to Europe by sea.

Altogether, the shipments take two months to get to either Cadiz in Spain or Hamburg, Germany where they are transferred to assembly lines in Toulouse (for the A350 and A320) or Hamburg (for the A320). If there are any problems or delays they can be sent by rail in just one month because Harbin is on the Trans Siberian rail line. However. this is a far more expensive alternative and has rarely had to be done. Shipment by air is not possible because items such as the A350 rudder are too large.

Interestingly, says Alamelle, some of the elevators that go to Europe will end up being shipped back to China to be fitted on planes at the A320 assembly line in Tianjin, east of Beijing.

Guillon says the development of the company, which is not an Airbus subsidiary but a majority Chinese owned joint venture, has been strongly supported by teams of industrial experts coming from Airbus, bringing industrial maturity and helping it capitalize on their experience.

“We have also deployed the state of the art industrial processes which are deployed elsewhere in Airbus so everything revolves around Airbus Operating Systems (AOS), with Airbus AOS experts helping us to make it part of the DNA of the company.”

There is also a strong training and certification path for Chinese employees.

“We have hired 350 people in the past two-and-a-half years. To get these people able to manufacture such complex assemblies you really need to train them efficiently so we have qualification programs and also a lot of exchanges with the Airbus plants in Europe. We send people to Europe to get complementary training and bring back the knowledge to China.”

The running of the company is also increasingly coming under Chinese management. There are now only six expatriates in key operational positions such as quality assurance and head of operations but the company is currently in a transitional phase with these senior positions being transferred to local managers.

As for the future, HMC has even bigger things on its agenda, with the potential to produce composite parts for companies other than Airbus, including possibly the planned Russo-China wide-body C929.

“We didn’t have until now a clear direction on this topic but from the top management of Airbus they are now ready to consider any opportunity,” says Guillon.

“In the future how do we position our business on the market? We need to be cost efficient compared to European providers. We will never be as cheap as the low-cost companies that you find in Asia so what we basically propose is to have the best cost solution on the market where there will be savings in terms of cost but nevertheless we are still able to deliver the level of service and quality which is requested by Airbus. It’s a real Airbus environment. A low risk solution.”

It’s a real Airbus environment. A low-risk solution. Olivier Guillon

For Airbus, Harbin and the HMC have become a key link in its chain of interests in China. The total value of industrial cooperation between Airbus and the Chinese aviation industry in 2012 was some US$295 million, US$500 million in 2015 and is expected to grow to $1 billion by 2020. Little wonder, China represents 22% of all Airbus deliveries and it has over 1,480 aircraft in service on the Chinese mainland flying with 28 Chinese customers (airlines and lessors).

In 1995 Airbus held only 6 per cent of the in-service Chinese fleet. Now it has 49 per cent and the company’s operations in China employ some 1,800 people.