Preparing for a possible industry downturn makes good business sense - even though the credit crunch has yet to bite. Yves Leclère, Safran’s executive VP and CEO of the French giant’s equipment branch, says there is no sign yet of any reduction in the manufacturing backlog and so far no major cancellations.
“Some people in the industry have said that up to 25% of the order books of both Airbus and Boeing could be at risk if the global economic downturn worsens and if the oil price remains at around $140 per barrel, or maybe increases. However, although we are preparing ourselves for a downturn in our industry by continuing to be a lean company and preparing defensive action if needed, we believe our strong base and healthy order book is good protection.”
Responsible for a range of well-known Safran Group equipment companies such as Messier-Dowty, Messier-Bugatti, Labinal, Aircelle, Hispano-Suiza and Teuchos, Leclère says the group is so strong because the vast majority of its equipment is on active aircraft.
“When older aircraft are grounded or parked it has little or no impact on our business,” he says. “Indeed, it can even be a boost because it frequently results in new, more economic aircraft being bought or leased which is good for us.”
 |
|---|
He also believes that there is no threat to Safran’s business from other PMA manufacturers challenging in the aftermarket arena. “We certainly don’t expect any serious challenge now or in the future and this is a plus. The vast majority of the equipment we manufacture is simply too technical for others with PMA status to come in and threaten our business.”
Leclère also points out that Safran equipment companies now have manufacturing sites in more than 40 relatively recent locations worldwide including the US, Mexico, China, Morocco, Poland, Turkey and India in addition to western Europe. This, he says, is a good example of the company adapting its footprint to take advantage of some lower-cost manufacturing areas while still concentrating on quality.
“We are putting a new supply chain mechanism in place and although this is not sufficient to cut costs, it does mean that we will be making the most of our supplier base and protecting ourselves through being lean and more of a ‘just-in-time’ company.”
Safran is also moving some of its R&D departments to low-cost countries, including India (400 engineers) and Morocco (200 engineers) to support the parent company’s existing businesses but also to develop activities and relationships with other multi-national companies such as PSA Peugeot Citroen, Renault and Michelin.
Leclère hints that there will be some big announcements from Safran companies at Farnborough, including the results of competitions to supply the main gearbox on the R-R Trent XWB and the carbon brakes for the Airbus A350XWB itself.
There may also be an announcement from Boeing about fitting the 737 NG range of single-aisle airframes – the last major airliners still retaining steel brakes - with carbon brakes for the first time. According to Leclère, the weight saving would be in the range of 300kg per aircraft and would be worth “several billion US dollars to Safran”. Also expect good news from Aircelle on the nacelle front.
Source: Flight International
