According to an agreement signed in 2007 between Airbus and the Chinese government, Airbus agreed to allocate 5% of the A350 XWB airframe to be manufactured in China. The work packages to be carried out by HMC are a significant part of the five per cent.
The Harbin Hafei Manufacturing Centre, set up in 2009, is already producing work packages related to the Airbus Single Aisle programme (elevators, rudders and HTP spars) and started in September to deliver the first major part to the A350 XWB program.
In addition to helping Airbus compete better in Chinese markets, another reason for outsourcing to China is one of cost as there is, at present, a considerable cost difference between labour in China and in Europe. “Depending on what they do, the cost per hour of Chinese workers on the aeronautical side is between 2 to 3 times cheaper,” explains Airbus China COO Gonzalez-Ripoll.
“This is not just a factor of wages but from the fact that Chinese workers work longer hours. Currently, we have yet to realize all these cost advantages at Harbin, as the facility is still ramping up. However, once the process is mature, then it will be more efficient.”
However, he also issued a word of caution that this cost advantage may not remain in place forever. “While salary increases in Europe currently average around 1-3%, those in China are increasing around 10% per year – which will begin to erode this differential.”
Other factors may change too – not least the development of a new indigenous Chinese airliner. “Today we compete only with one major manufacturer,” says Gonzalez-Ripoll. “In the future we may be one of several manufacturers in the market. But what matters is that we can compete.”
HMC inagurated in 2011 state-of-the-art new facilities.
The Chinese edition of America´s Fortune Magazine has ranked Airbus twice as the most valuable brand in China and the Chinese Central Television has awarded Airbus as the international company better known in China.
Airbus appears confident that the move into China is a ‘win-win’ situation for both itself and for China. “Airbus is in China to stay,” states Rafael Gonzalez-Ripoll, who previously worked for Airbus in Spain and was appointed COO of Airbus China in January 2013. “When Airbus first moved into China in 1985, our market share was 6%,compared to 71% from Boeing and 23% from other manufacturers. By 2013, Airbus’ share has risen to 49%.”
Based on the press release “Harbin Composite Manufacturing Centre delivers 1st major A350 part.”