China To Build Its Own Large Jetliner

Hugh Pickens writes "China's domestic airlines will need to buy an estimated 4,330 new aircraft valued at $480 billion over the next two decades to meet demand in commercial aviation. Now the LA Times reports that the Commercial Aircraft Corp. of China expects to begin producing its 156-seat C919 by 2016, competing with the Boeing 737 and Airbus A320. China has staked billions of dollars and national pride on the effort but what may surprise some Americans worried about slipping US competitiveness is that some well-known US companies are aiding China, putting US and European suppliers in a tough spot: Be willing to hand over advanced technology to Chinese firms that could one day be rivals or miss out on what's likely to be the biggest aviation bonanza of the next half a century. 'If they launch a commercial aviation industry, you've got to be part of it,' says Roger Seager, GE Aviation's vice president and general manager for China, whose company has garnered contracts worth about $6 billion for the C919. 'You can't take a pass and come back in 10 years.'"

Comments

Re:What's the adage?

[advocate_one]

The firm my mother worked for put itself out of action by selling large hydraulic presses to the Russians to use in factories that were to produce large hydraulic presses...

always knew there would be comebacks for letting the Chinese do your manufacturing for you as they would learn your technology and use it against you

China can just "borrow" other airliners, no biggie

[acidradio]

China's turboprops in the modern era are all Russian designs. The ARJ21 is a ripoff of the MD90 http://en.wikipedia.org/wiki/Comac_ARJ21. The C919 is an Airbus 320 20 years too late. There is no innovation here, just borrowing. That's OK though, right?

Read Airframe

[Goffee71]

The novel by the great, late Michael Crichton, explains all of this in enjoyable detail....

Re:What's the adage?

[TheRaven64]

I went to a talk back in 1996 by a Professor of Sinology at Cambridge, who was discussing the fact that it was Chinese policy to invite western corporations in with large incentives, then learn their business methods and create government-funded clone companies. The case study that he provided was Cocoa Cola, which was already quite an old example there. He wasn't talking about his latest research, just about a current trend.

Given that this has been pretty widely known by anyone who bothers to look for about 20 years, I am amazed that any company would be stupid enough to move manufacturing to China. I'd expect a shareholder lawsuit for any that tried. Unfortunately, Wall Street has been selecting in favour of CxOs who avoid long-term planning for quite a bit longer than China has been an economic threat.

Re:Gold for salt.

[chrb]

It always made me wonder why they didn't just pay gold, even if it was an incredible amount, for the knowledge to secure their own salt.

You're talking about the Trans-Saharan gold and salt trade. The salt the Mediterranean traders brought came from salt mines in North Africa, not from the sea. I guess that the amount produced by evaporating salt water was tiny compared to mining, and thus commercially unviable.

Well, this is not a surprise actually

[balaband]

Chinese have already (successfully) copied fighter planes. Take a look at J-7 (Mig-21), J-8 (Su-15), J-10(Eurofighter), J-11 (Su-27, Su-33). So only thing that is actually new - is that they are making* a new, civilian airplane.

* When I say making, I think about using blatant copy of some existing design

Re:Well, this is not a surprise actually

[Richard_at_work]

The J-10 was not a Eurofighter copy, it was a carry on from the Israeli Lavi project, which was itself built on the F-16. There was a lot of criticism of Israel after they handed the Lavi project lock stock and barrel to China despite it containing lots of classified American technology.

Re:Quality control?

[antifoidulus]

Um, yeah, they did actually produce planes, they just never were all that competitive with Airbus and Boeing.

Re:What's the adage?

[xonar]

From Rolls-Royce's website "Rolls-Royce wins $1.2 billion order from China Eastern Airlines and agrees environmental partnership"

http://www.rolls-royce.com/civil/news/2010/101109_china_easter_order.jsp

Re:What's the adage?

[arivanov]

It has little or no oil or iron for that matter.

The oil situation may change somewhat if it resolves its disputes around contentious areas with probable oil fields in the yellow sea. However even with these deemed to belong to then, online and exploited to the full it will still need to import.

As far as most metals, etc it will always have to import. So the biggest danger to China's economic boom is actually not the increase of their own living standard and costs - it is the rising competition from other countries which used to be predominantly exporters of raw materials like Brazil.

Re:What's the adage?

[Kjella]

Unfortunately, here in reality, the economics profession is a complete fucking failure of a joke. Banks are run by dipshit morons propped up by criminal politicians. Corporate accounting is a total fraud. Ridiculous models conflate assets and technology and labor along with fiat currencies that have no real measurable value. The entire bullshit field is based on a fantasyland premise of perpetual growth in "utility" along with magical non-zero-sum mathematics at odds with even basic physics.

Oh, the anger. What exactly is your problem with today's money? It's not gold backed but you can very well buy gold for dollars. Or real estate or whatever else "lasting" value you seem to think it lacks. As for the subprime fiasco it takes two to make a subprime loan, but blame it all on the lenders.

"Utility" is a personal measure of something's worth, generally it's used in pricing theory. If utility > price you buy, otherwise you don't. It's not easily measured nor aggregated, so do tell where you've ever heard that in the context of "perpetual growth".

As for non-zero-sum mathematics, specialization is a non-zero-sum game. If that was wrong, pretty much every civilization has been wrong. It's even true when one person is another's superior in every way.

Example:
Object....A...B
Person.1.50.. 5
Person.2.60..60

Even if person 1 can do both things faster, he's so much faster at making object B it's profitable for him to make Bs and trade them for As from person 2. This is just proving that specialization still holds.

Re:Big 3 aircraft engine manufacturers

[sjbe]

Most of their sales are outside the US.

Self correction. About half come from exports. Boeing by itself is about 1.5% of US exports.

Re:Quality control?

[nojayuk]

A commonly-used short-hand term in the British and Commonwealth military during the WWII period was U/S, short for "unservicable" meaning something wasn't worth repairing and it should be junked or dismantled for spare parts. It had nothing to do with the USA.

Re:Quality control?

[jrumney]

Also, they never tried to build planes, since it requires a lot more work than trains.

Mitsubishi Heavy Industries would beg to differ.

Re:Offshore maintenance

[Zak3056]

Offshoring maintenance? As in having maint done in a stopover in Hong Kong or Cyprus instead of the States? I hadn't heard of that. Any more info on that?

Worse than this. See this NPR story. Aircraft are flown from their home base to Mexico or South America for maintenance by some airlines, because the overall costs (including the rather high per hour operating costs of moving the aircraft) is cheaper than domestic. Another NPR story lists some of the problems with this. An except from the second story:

One mechanic says that just a few days earlier, he and his colleagues were replacing a kind of rivet, commonly called a Hi-Lok, along the fuselage. The airline's manual said they should use a "shear" Hi-Lok that's carefully engineered to withstand a specific amount of pressure on a specific part of the plane. But the mechanic says Aeroman didn't have the right Hi-Loks on hand, so the supervisor told them to use "tension" Hi-Loks that weren't approved for that repair.

The mechanic says he resisted, because the wrong Hi-Loks "would cause, actually, a crack in the fuselage when there is turbulence." When the supervisor pressured him to use the incorrect part anyway, "I told him no, because the manual does not allow me to do that," he says. But the supervisor ordered him "to go ahead and install it, because we were in a hurry to turn around the airplane."

Another mechanic ticked off other problems at Aeroman. Some employees don't store glues at the required temperatures, he says. That means the glues could fail — which potentially means that parts of the airplane could fall apart.

And this mechanic says some workers can't even read the airlines' repair manuals. The manuals are written in English, but some mechanics at Aeroman can't read English — including him. So, the mechanic says, "you have to ask for help [from] another colleague. And in my case I ask for help, often." The problem is mechanics are under so much pressure to finish the repairs that they don't have much time to coach their colleagues.