The reorganisation of BAE Systems Airbus into the UK arm of the integrated company provides an interesting case study
Max Kingsley-Jones/BRISTOL
The UK blinked first when Europe's aerospace players were discussing a collaborative airliner project at the end of the 1960s. Fortunately, the UK Government's decision to withdraw as a paid-up partner in Airbus Industrie, which was announced in April 1969, did not discourage Hawker Siddeley (HS) from linking up with the consortium as a private venture to design and build the wings.
Thanks to the foresight of the Hatfield-based company, which became part of British Aerospace (now BAE Systems) on its creation in 1978, every Airbus wing has been designed by UK engineers and built in UK factories. Ten years on, HS's private deal would also provide a way back into the Airbus consortium for the nationalised BAe, and the company's Airbus work now contributes a healthy return to its bottom line.
Airbus UK
Wing-design responsibility for Airbus aircraft lies with the Filton plant near Bristol, while wing final assembly is performed by the former HS plant near Broughton. In anticipation of the restructuring, these two plants, which constitute BAE's Airbus division, have been renamed Airbus UK. These plants will now become part of the Airbus Integrated Company (AIC), with the former division's 9,000 employees transferred accordingly. As they are no longer BAE staff, they have had to relinquish their BAE share options, but they have been allowed to retain their BAE pensions.
"What we have created [with the new Airbus] is a matrix organisation," says Airbus UK managing director Tom Williams. "We will have challenges to change the thinking on how things used to be done. We have to change the mind-set to that of a single company."
Williams warns, however, that the company must remain focused on its operational performance: "It would be easy to get distracted by trying to create the perfect organisational model."
The Filton and Broughton sites are now stand-alone from their former parent in every sense; even the old "BAE Systems" signs have come down at the plants' entrances. Managers now refer to the Airbus partners as "the shareholders", and swear allegiance to Toulouse rather than BAE's headquarters in Farnborough.
"Lots of work has been done over the last 12 months to see clarity on all our contracts with other BAE plants," says Williams. "We have restructured all the inter-company trading agreements so that we now have proper 'arms-length' trading relationships."
Cost-saving opportunities
Cost savings is one of the AIC's key goals, and Williams says national fiefdoms that were "ring-fenced" by various partners to protect their position should now be opened up. "We are looking at areas where we can redistribute to remove non-added value - there are lots of opportunities here for cost savings."
So-called "value-creation savings" are targeted, which Williams says will result from a rethink on how work will be distributed. "We will look at the most sensible way to act. It has in the past been dictated by workshare. It will now be decided by business case analysis."
Airbus UK's engineering director, Iain Gray, adds: "We are now all pulling in the same direction, as opposed to fighting against each other because of national interests."
A common procurement policy across all of its European plants is one of the "new" Airbus' priorities - as it should be, according to some of its suppliers. Williams' predecessor, Ray Wilson, has been appointed to head that department in Toulouse.
There was a technical design competition among the various partners on all new Airbus aircraft until the A380, says Gray. This resulted in competing teams undertaking unilateral studies of new wing designs. This competition ensured that the best possible design was adopted for each new Airbus, but it also saw the UK's position on wing design threatened.
"We didn't set out to be the wing centre of excellence, but 25 years on, that's what we are," says Gray. With the Airbus sites across Europe now having clearly defined roles. "What Airbus must try to do is replicate the benefits of the competitive bid process, without the duplication that the old method had," says Gray.
Airbus UK's director of manufacturing, Brian Fleet, says: "When the A300 programme began in the early 1970s, Broughton was a jack of all trades." At that time, the plant's primary task was to produce the HS125 business jet, and the A300 wing work was tucked away in a corner. "We've gone from being a cottage industry with low production rates to a massive high-tech plant built upon key skills, producing upwards of 400 units annually," says Fleet.
Airbus' two UK plants manufacture wing skins, spars ribs and stringers. "Filton is the 'powerhouse' behind Broughton - it is the fabrication shop - a centre of excellence for wing manufacturing," says Fleet.
Two policies have been adopted for the UK's share of the wing manufacturing. Wings for the widebodied types (A300, A310 and A330/A340) are assembled at Broughton and flown by Beluga to the EADS Airbus plant in Bremen for equipping with control surfaces, before travelling to the assembly line in Toulouse. Wings for the single-aisle models (A319, A320, A321) are fully equipped by Broughton and despatched straight to the assembly line in Toulouse or Hamburg. Since the A330/A340, BAE has also been responsible for programme management of landing gear systems.
Wingsets from the UK
The A380's wing will be designed, built and partially equipped by Airbus UK. Broughton will install hydraulic, air and electrical systems on the wing, and it will go directly to Toulouse (by ship to the port of Bordeaux and then by barge and truck). Flying-control surfaces will be installed on the final assembly line in Toulouse.
The foundations for Broughton's 8ha (20 acre) A380 wing-assembly hall will be laid in the third quarter of this year. The building, which will be 500m long, will be up and running by 2003 and will eventually be able to produce 48 wingsets a year.
A more immediate challenge for Airbus UK is managing the ramp-up of A320 family wings as it increases to a record 30 a month by next year. This has required investment in additional jigs at Broughton, but Williams says: "The real issue is to make sure that the supply chain can come up to speed on time."
Some wing fabrication has been sub-contracted to Chinese suppliers and Williams says he would like to see their participation increase. There has been talk that China could eventually produce entire Airbus wings.
"We have enough capacity between ourselves and our suppliers for A320 wings," says BAE Systems chief operating officer Mike Turner. "What matters is how much we keep in-house and how much we put out. It's important we only keep in-house what we think we can sustain through a downturn. We don't want a hire and fire cycle - we want stability," he adds.
"China is taking some of the A320 wings but that will be a long slow build-up, which will take many years and has set milestones - that's agreed," says Turner who adds that former Airbus UK MD Ray Wilson recently completed the negotiations of the the next stage of the deal. "We are not going to get the Chinese to order Airbus aircraft unless we are in there, like Boeing," says Turner.
At Broughton, contractors represent about 1,700 of the 4,300 employees, which gives Airbus UK some flexibility in managing the boom-bust cycle. The company is in the process of switching a number of its contractors on to permanent contracts, which will see the tally reduced to around 1,100 contractors:"We will retain around 10% of our workforce as contractors, to hedge against a softening of the market," says Williams.
Off the agenda
In the early days of the single-aisle programme, there was some talk of a UK final assembly line. Such a development is now clearly off the agenda - while assembly is arguably the most glamorous part of aircraft production, the Airbus manufacturing technique of supplying fully equipped sub-assemblies to the line means that it represents just 5% of the entire process in man-hour terms.
As such, BAE has no wish to make the huge investment needed simply to have the prestige of a final assembly line.
Source: Flight International
