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Airbus’ A320 MSN1 fl ight test aircraft took to the skies for the fi rst time in its “Flight Lab” confi guration on June 3, 2016, as part of the Clean Sky research program.


the automated assembly of the circumferential joint between forward and aft fuselage. Two adjustable-height robots with six-axis capability drill more than 2,000 individual holes in the circumferential joint and install the rivets. The new A320 production line will launch operations in mid-2017 and increase its output gradually. As a result of manufacturer consolidation and market exits, the aircraft industry is notably concentrated. The top nine com- panies—Boeing, Airbus (formerly EADS), Lockheed Martin, Bom- bardier, Finmeccanica, Dassault, Embraer, Textron (Cessna and Bell Helicopter), and General Dynamics’ Gulfstream unit account for 90% of industry revenues. Most of these


example of this trend, although the program’s endless delays imply that Boeing went much too far in outsourcing the design work (but manufacturing outsourcing still looks like a good idea).


The top nine global aerospace companies account for 90% of all industry revenues.


players have absorbed several smaller players over the past decades, increasing their shares of a growing market. Yet this market share growth and industry consolida- tion is somewhat deceptive. Although prime contractors have increased their dominance at the top end, they are also increasing the amount of work they give away through outsourcing. Manufacturers have always outsourced 50-60% of the value of any given aircraft (engines, avionics, systems, interiors, etc.). But today, primes are partnering with second tier companies for major airframe structures. The primes seek to spread new program risk and costs, and focus on top end product integration and marketing. Boeing’s 787 is the best


contractor arena.


Many airframe subcontractors are current and former air- craft manufacturers, fi nding themselves in a different position as prime contractors in the industry and bidding on additional aircraft-related work. Stork’s Fokker unit, Saab, and Kaman are the best examples of these. Barriers and Entrants


Harry Stonecipher, ex-CEO of McDonnell Douglas, once


famously remarked of the jetliner business, “If we weren’t in this industry, we’d be trying to get into it.” This was basically a pipedream, as evidenced by McDon- nell Douglas’s subsequent exit from that market (and the en-


Due to this outsourcing, the industry has seen the growing power of subcontract players specializing in aircraft struc- tures. The structures industry, too, is relatively concentrated. The major second tier companies include Spirit AeroSystems, Vought Aircraft, Finmeccanica, and Japan’s Mitsubishi, Kawasaki, and Fuji Heavy Industries. All of these in- creasingly important manufacturers are sited in high cost production areas, implying barriers to entry that are just as high as in the prime


23 — Aerospace & Defense Manufacturing 2016


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