Typically for the East European industry, Romaero's base at Baneasa Airport in northern Bucharest consists of pockets of activity interspersed with large areas of empty factory floor. On the one hand, there is the lively Pilatus Britten-Norman Islander assembly line, or the busy section of an otherwise empty production hall dedicated to the production of the Canadair CL-415 cockpit. On the other hand, there is the ghostly silence of the "Rombac" One-Eleven assembly hangar, where a dusty, near-complete, freighter stands forlorn and abandoned, with the fuselage of what would have been the first upgraded, Rolls-Royce Tay-powered Airstar 2500 variant. The best future that now awaits these relics of an unfulfilled dream is a place in a museum.
The "Rombac" programme - which was once seen as the mainstay of the Romanian civil aircraft industry - has now been declared dead, to nobody's great surprise. Romaero's efforts in recent years to secure funding for the upgrade programme, without which further production made no sense, met with little support from the aircraft's design authority, British Aerospace, and the programme faced 100-seater competition from well-established Western manufacturers, against which Romaero would have struggled to compete.
As a result, Romaero chairman and chief executive Dumitru Cucu adopted a pragmatic strategy which has cut the workforce by two- thirds in six years, and turned the company into a subcontractor and maintenance centre claiming small, but increasing, profits.
In 1990, Romaero employed 4,010 people on its 36Ha (88acre) site, and was planning to produce 16-20 One-Elevens a year, with an eventual workforce of about 10,000. "We were the perfect orphanage," says Cucu, explaining that unemployment was forbidden by law under the old Communist regime. Anyone found jobless could be jailed, and the Government decided the levels of employment in the nation's industry, regardless of the state of the market.
This all changed after the bloody ousting of Romania's despotic former leader Nicolae Ceausescu. By the time Cucu was appointed to his current post, Romaero was allowed to carry out the necessary restructuring of the company more or less unhindered.
Staff levels now stand at 1,400, having hit a low of 1,200 in 1994. In that year, says Cucu, the company was stabilised and began to attract new business. Under today's strategy, employment levels will rise to no higher than 2,000 in the foreseeable future.
Cucu has been with the company since 1962. He had worked his way up to the position of technical director by the time the political and social upheaval at the end of 1989 threw him back down to the position of "basic engineer". He then worked his way back up through the management levels, taking on his present appointment in 1994. Practically all the senior managers of Romaero have spent their entire working lives with the company.
Cucu's strategy is twofold. The first goal is to establish a maintenance centre for Western-type aircraft, with approval from the US Federal Aviation Administration and European Joint Aviation Authorities (JAA). The second aim is to secure more manufacturing subcontracts for the company, from "well-established companies" abroad.
As far as licensed aircraft production is concerned, however, Romaero's ambitions do not go beyond the continued assembly of the Islander and its Defender 4000 derivative. The "Rombac One-Eleven" saga has clearly left a sour taste in Cucu's mouth.
"We are mature enough to change our approach," says Cucu. "We know where we stand, we can see how the global aerospace industry is developing, and to suggest that we can compete with Boeing and Airbus in promoting a 100-seater is ludicrous."
LOOKINGAHEAD
By mid-1997, the factory space formerly dedicated to One-Eleven production will be made available for other work. Alongside continuing projects, the company is negotiating two new maintenance programmes.
The first will be a joint venture with US-based leasing company C-S Aviation. An agreement between the two companies was signed at the Farnborough air show in September 1996, aimed at forming a new 50:50 joint venture, to be called C-S Romaero. The operation is to be based in Bucharest, and will offer heavy maintenance services to European operators for narrowbodies including the Airbus A320, Boeing 727 and 737 and the McDonnell Douglas DC-9 and MD-80.
"All documents related to the joint venture are already finalised as far as we are concerned," says Cucu. The companies are now waiting for official state approval, which Cucu expects by the end of April.
C-S Romaero will be the first of a kind of partnership which the Romanian company hopes will lead to its eventual full privatisation. "Our plans are to find new investors and to organise joint ventures by capital addition. This way, the capital added to the company will remain with the company to help us finance our future programmes," says Cucu.
Some 70%of the company is in the hands of the Government-run State Ownership Fund, with roughly 30% in the hands of parliament, through a so-called "private-ownership fund". Early privatisation attempts by the post-Communist Government placed a total of 1.5% of the company's shares in the hands of some 2,000 private citizens - mostly current and former company employees - but the wheels of this "mass privatisation" plan soon ground to a halt, and are only now being set in motion again by the recently-elected administration of President Emil Constantinescu.
Cucu says that the State will now try to find "one or two strategic investors" to take over the Government's stake in the company. "If this does not happen, our intention is to press [the Government] to put these shares on the market for sale to private interests - although we would prefer it if the state could find strategic investors, because they will come with business plans for future programmes," says Cucu.
On 5 February, the company signed an agreement with Lockheed Martin aimed at establishing a repair centre in Romania for thrust reversers and nacelle components for the General Electric CF6 turbofan. Constantin Dinischiotu, executive director for sales and marketing, says that the company hopes to have this new centre up and running "by the second half of this year".
"We see a lot of potential for this work, because these reversers are on the Boeing 747 and 767, and on the Airbus A300 and A310," he adds. Romaero will become a Lockheed-Martin authorised repair station, and Dinischiotu hopes that it will also interest Middle Eastern customers attracted by Romaero's relatively convenient location.
MAINTAINING HOPE
Romaero says that it also intends to push for the contract to maintain the Romanian air force's new fleet of Lockheed Martin C-130 Hercules transport aircraft. The air force has already taken delivery of four ex-US Air Force C-130Bs and the defence ministry says that it is planning a follow-on order for an unspecified number of C-130Hs in tanker and transport roles, and possibly an airborne-early-warning version.
Romaero already maintains Boeing 707s and 727s for international customers such as C-S Aviation, Omega Air and Tarom; BAC One-Elevens for Jaro International, Romavia and Tarom, and it still carries out maintenance on Soviet-built Antonov An-24s and An-26s operated by the Romanian military.
Key production programmes include wing and fuselage subassemblies for the Boeing 737 and 757, which the company has been manufacturing since 1994. Romaero expects more 737 work once Tarom places an expected order for four 737-700s and four -800s, now awaiting Government clearance.
The company also hopes that its manufacturing work for Canadair will eventually include the entire CL-415 fuselage, rather than just the cockpit section now being built in Bucharest. Dinischiotu adds that the company also has an agreement with Israel Aircraft Industries for the manufacture of jigs and tools for the Israeli Astra Galaxy business jet.
Having manufactured 540 Islanders for Pilatus Britten-Norman since 1969, Romaero believes that there is still potential for a further 160-200 aircraft over the next decade, boosted by the new Defender 4000 surveillance and patrol version of the aircraft, which won its first sale - to the Irish police - in December. Dinischiotu predicts that this version will account for 12 to 15 out of about 18 aircraft expected to be produced annually from now on. Until now, Romaero has been producing subassemblies for the Defender 4000, but is due to move to full production in September.
CHANGING FORTUNES
As recently as 1993, 80% of Romaero's work was for the domestic market, with 20% for export. Now, the situation has been reversed, with 78% of Romaero's work going abroad.
It claims "with some pride" that it has no debts, and has been modestly, but increasingly, profitable for four years. According to Dinischiotu, 1996 turnover amounted to about $55-60 million - 22% up on 1995 - with a profit margin of 7%, compared with 5.2% in 1995.
Romaero is now aiming to achieve ISO 9000 certification in the third quarter of this year, and the company hopes it will be an increasingly attractive potential partner and subcontractor, combining quality with low labour costs.
It believes that it will be able to keep this edge over other Eastern European manufacturers for at least a decade as the Romanian economy develops. By this time, it should have established itself in long-term international partnerships, and found a niche in what will no doubt be a radically changed global industry.
Source: Flight International
