TPT January 2016

Global Marketplace

› Yet another Airbus executive to strike a strongly proactive note was co-CEO Tom Enders, who led an unsuccessful attempt by parent company EADS to beat Boeing for a $35 billion aerial tanker refuelling contract from the US Air Force, in 2011, and would perhaps relish a re-match. “We are a large aerospace company,” Mr Enders observed in a televised interview in Mobile. “And should the situation arise where we have something competitive to offer the US Air Force, for instance, this would certainly be a site where we’d consider doing something.” Manufacturing A German programme to bolster its factory owners is at risk of eclipse by a similar initiative led by US tech companies “There’s great concern that a Google or an Apple might master the manufacturing world. It’s important that we try to do it ourselves while we still have the opportunity.” Heinz-Jürgen Prokop, head of development at Trumpf, a family-owned maker of metalworking machinery that is participating in a programme known as Industrie 4.0, was expressing sentiments being heard more and more in German industrial circles. These concerns were examined by Alex Webb of Businessweek in the broader context of Germany’s plan to jump-start web-linked factories, now facing some unwelcome competition. (“Can Germany Beat the US to the Industrial Internet?,” 18 September) The German government in 2013 launched the Industrie 4.0 alliance of companies, academics and political leaders to encourage the small enterprises at the heart of the economy – what Germans call the Mittelstand – to embrace new technologies. Then, in 2014, AT&T, Cisco Systems, General Electric, Intel and IBM set up a similar initiative: the Industrial Internet Consortium, or IIC. As described by Mr Webb, both groups aim to streamline communication among the machines in factories throughout the companies’ supply chains. A typical goal is to reduce downtime through timely notification of when a factory will have spare capacity or need replacement parts. According to global consultant McKinsey, built-in sensors collecting data for better allocation of resources could help manufacturers cut energy use by as much as 20 per cent and labour costs by 25 per cent. What is at stake, wrote Mr Webb, is no less than “the health of German manufacturing,” which employs 15 million people – some one-third of the workforce. By 2020, according to PricewaterhouseCoopers, Industrie 4.0-related projects will account for half of capital investment by German manufacturers, or some $45 billion. Another US consultancy, Wikibon, estimates that global investment in the industrial Internet will have topped $500 billion a year by 2020, up from $20 billion in 2012.

Airbus and Boeing A new $600 million plant in the Gulf Coast city of Mobile gives Europe’s Airbus a springboard to expansion in the lucrative American market “We expect to get about half that total, if not more.” The total cited by Allan McArtor to the Seattle Times is 4,800 – the number of single-aisle aircraft that North American airlines will likely be buying over the next two decades. With this confident assertion of his own company’s prospects in that market, the chairman and CEO of the North American subsidiary of Airbus was taking aim at Boeing Co on its rival’s own turf. The hometown newspaper of Boeing’s original headquarters city termed the plan “an aggressive move” on the part of the European aerospace company, which commands about 20 per cent of the US market. While that will reach 40 per cent when carriers including American Airlines take delivery of Airbus planes on order, the US market has traditionally favoured Boeing even as the two manufacturers share the global market 50/50. Airbus made plain its intentions for the US with a $600 million plant for single-aisle airplanes, inaugurated recently in Mobile, Alabama. As noted by the Seattle Times reporters Julie Johnsson, Andrea Rothman and Matthew Miller, the factory is only the second such plant built by the plane maker outside Europe. The other is in China, which is poised to eclipse North America as the world’s biggest market. (“Airbus Guns for Boeing with New Alabama Factory,” 15 September) Airbus president and CEO Fabrice Brégier, who according to Aviation Week & Space Technology (11 September) has long advocated for an international footprint for the French-based group, said that its first US facility had been years in the making. It is, he said at the opening ceremony in Mobile, “the most significant, game-changing incident in US aerospace in decades.” Most of the jets built in Mobile will be delivered to North American customers, Airbus said. Deliveries are due to start early this year, with production rising to four aircraft a month by 2018. The company holds an option to double the 116-acre site to accommodate expansion. › The Seattle Times reported that the first two aircraft taking shape in the new facility are A321s, the largest single-aisle model and the one Airbus is counting on to wrest market share from Boeing. The jets, seating upward of 200 passengers, are becoming a mainstay of transcontinental routes flown by American, Delta and JetBlue. Asked if he were planning a new midsize plane to counter the 757 replacement on Boeing’s drawing boards, Mr Brégier nodded to the A321. “The aircraft exists already,” he said. “You don’t need to reinvent it.”

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J anuary 2016