Alongside Tianjin airport in the north-eastern coastal Chinese city is the Tianjin Free Trade Zone, a sprawling area of flat vacant land, industrial estates and the new home of Airbus's first assembly plant outside Europe.
Two buildings, for housing Airbus aircraft parts, have been completed, as has the main assembly plant. Within that plant sits what will be the first Airbus aircraft assembled in China. The A320 sits at one end of the plant and is undergoing stage one of what is a four-stage process inside the final assembly plant.
Assembly work on the aircraft began on 18 August, but when Flight International visited in September the manufacturer had yet to install the tooling for stage two to four. This first aircraft is due to be completed June next year. Sichuan Airlines will lease the aircraft, manufacturer's serial number 3591, from Chinese lessor Dragon Aviation Leasing.
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Having an assembly line for its A320 family of twinjets in China puts Airbus on a stronger commercial footing in the country and gives the European aircraft-maker the potential to produce aircraft more profitably.
For China, having an Airbus factory demonstrates to the world the country can produce aircraft to an international standard. Airbus's plant will also attract investment from Airbus suppliers and other foreign aerospace companies.
China has extensive experience in aircraft manufacturing. It has been producing its own civil and military aircraft for decades and its state-owned manufacturing plants produce parts for Airbus, ATR, Boeing, Bombardier and other Western manufacturers.
WORK DIVISION
In terms of Airbus work, Xian Aircraft makes A320-family wing-boxes and electronic bay doors, Shanghai Aircraft makes A320-family cargo doors and Harbin Aircraft has secured a deal to make some composite parts, including parts for the Airbus A350 XWB.
China also has some experience assembling Western aircraft, with Brazil's Embraer assembling 50-seat Embraer ERJ-145s in a plant in north-east China's Harbin city as part of a joint-venture with China's Harbin Aircraft. And McDonnell Douglas in the late 1990s assembled MD-90s in Shanghai with the help of China Aviation Industry Corporation (AVIC) companies. MDC's Chinese venture was a failure as only two MD-90s were built and the residual value of the aircraft suffered because they were Chinese-built.
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Airbus Tianjin has sought to avoid the pitfalls that befell MDC by taking a different approach to aircraft assembly in China. While the US manufacturer relied heavily on AVIC to assemble the aircraft, with the Chinese partner producing the aircraft's main fuselage, wings, empennage and nose, the European airframer has decided to perform only final assembly in China.
All major parts are sent to China from Airbus's plant in Hamburg to Airbus Tianjin. The European aircraft-maker owns 51% of the joint venture, with the remaining 49% held by a Chinese consortium comprising AVIC and the Tianjin Free Trade Zone. Airbus Tianjin has taken responsibility for recruiting and training all the people that will assemble the aircraft in China.
The joint venture's general manager, Jean-Luc Charles, says only about 3% of Airbus Tianjin's workforce is being sourced from AVIC. Airbus Tianjin has more than 230 employees. At the end of this year the total is expected to reach 300 and by mid-2009 there will be 500 employees, says Charles, adding that of the 500 staff, 125 will be expatriates.
There will also be another 500 subcontractors who will be involved in support functions such as catering and cleaning.
"To ensure the quality for our product it is mandatory for starting of operations to have so many expatriates," says Charles. He says many of the expatriates will be quality inspectors who will help teach the local workforce.
Airbus Tianjin has been strict about who it employs locally, says Charles, adding that "our expectations are very high, so it has been difficult".
He says that only 1% of people who apply to work at the joint venture are successful. Applicants are interviewed and made to do written tests before being sent to assessment centres to carry out practical tests in workshops, he says.
PAINTSHOP EXAMINATION
One such test is in a paint workshop test centre, where Airbus has aircraft panels for applicants to paint so their workmanship can be assessed, Charles says, who adds that Chinese workers are sent to Toulouse, France and Hamburg, Germany for one to two years for training.
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The time overseas depends on the worker's job responsibility, he says, adding that employees who agree to the training will be bonded to the company for a number of years. He says the flightline personnel will receive the most overseas training and will be stationed in Europe for two years.
Producing aircraft in China is cheaper than producing them in Europe and the fact that the aircraft are built in China means some import duties and taxes can be avoided.
Charles declines to comment on the tax situation because this matter is still subject to negotiations between the Chinese government and Airbus China in Beijing. But buyers hoping to purchase Chinese-built A320s at lower price than those charged for the European product will be disappointed as Airbus Tianjin is adamant the sale price of its aircraft will be the same as in Europe.
"The selling price is the same because it is the same aircraft," says Charles.
To ensure that buyers are fully aware of this fact, Airbus has established a company called the Airbus Tianjin Delivery Centre, which is a wholly owned subsidiary of Airbus. It means buyers will be purchasing their Chinese-built A320s from Airbus rather than Airbus Tianjin, which will transfer ownership of the aircraft to Airbus Tianjin Delivery Centre at the end of the manufacturing process. It is this centre that then transfers the aircraft title to the buyer.
Airbus Tianjin has also applied to the European Aviation Safety Agency to be an approved production organisation (POA) under the Airbus single POA, says Charles, adding that EASA officials have already started visiting Airbus Tianjin to carry out audits.
CRUCIAL CO-OPERATION
The co-operation with the Chinese authorities is also crucial to the project's success. The assembly plant itself is being built not by Airbus but by the Tianjin Free Trade Zone to Airbus's requirements. The trade zone retains ownership of the land and the buildings and leases these to Airbus Tianjin.
The final assembly plant's design, meanwhile, is modelled after the Airbus assembly plant in Hamburg, Germany. "It is a copy and paste" of the plant in Hamburg, says Charles, adding that "we have copied the Hamburg plant because it is Airbus's newest - so it already includes the quality improvements - and we have copied so as not to take risk."
Besides the assembly plant, there are other buildings such as an aircraft paintshop, two logistics centres and a building for final phase. Because Airbus Tianjin is on a greenfield site, these buildings are in the optimal position in relation to the assembly plant, says Charles.
Logistics centres, for example - where the aircraft parts are stored - are near the front entrance to the assembly plant, while the paintshop is directly opposite the rear entrance of the assembly plant.
Some of the buildings at Airbus Tianjin are still under construction and Charles says the whole plant will only be completed in May 2009. Charles says the plan is for production volume to be one aircraft a month from June 2009. The plant will then work to increase volume and reach four aircraft a month in 2011.
The factory will only be producing Airbus A319s and A320s but later it might add A321s, says Charles. Aircraft will initially all be for the Chinese market, although aircraft for other markets might later be produced at the factory.
Charles says this possibility is a long way off since China already has more than 100 A320-family aircraft on order, more than enough to cover Airbus Tianjin's eventual output of 48 aircraft a year.
Tianjin airport has agreed to grant Airbus Tianjin the slots that it requires and the airport's second runway - now under construction - will be used exclusively by Airbus Tianjin to begin with, says Charles.
He also says the Civil Aviation Administration of China has allocated some airspace that will be dedicated to Airbus Tianjin so it can use the airspace for aircraft test flights.
BROADER OBJECTIVES
Another important aspect of Airbus's investment in Tianjin is that it ties into Airbus's broader objectives. Inside the Tianjin assembly plant there are workers and experts from France, Germany and the UK assisting with this project and working alongside Chinese employees.
But despite the fact that Airbus draws on talent from around the world there is a general perception in China - and many other parts of the world - that Airbus is a French aircraft company, despite Germany and Spain also being stakeholders.
Before becoming general manager of Airbus Tianjin Charles was responsible for dealing with Chinese suppliers such as Xian Aircraft, which makes A320 wing-boxes for Airbus.
Charles says that locating an assembly plant in China is significant because "it is part of Airbus's goal to be more of an international company".
AIRBUS LOOKS TO MOVE WING MANUFACTURE
All the major parts for the aircraft are sent to Airbus Tianjin from Hamburg, but Airbus is looking at having the wings fully made in China.
China's Xian Aircraft already makes the A320 wing-box, but it then has "to go to the UK to be equipped", says Airbus Tianjin general manager Jean-Luc Charles.
He says Airbus is looking at having the wing-boxes equipped in China so they can be sent straight to Airbus Tianjin rather than incurring the expense of sending the wing-boxes via sea, initially to the UK and then from Hamburg to Tianjin.
Airbus China is now looking at whether to establish a joint venture in China to equip the wings, says Charles, adding that the other option being explored is to outsource the work to a Chinese company. Charles declines to name the parties Airbus is speaking to, but he says the work is likely to be carried out in a location between Xian and Tianjin.
If Airbus decides to have China complete all the work on the wings, it will be significant.
The wings are generally considered to be the most technologically advanced section of the aircraft. And it means China will be the first location outside the UK to do such work on A320 wings.
Source: Flight International
