Dietmar Schrick, 德国航空航天工业协会
Release Date: 2009-01-30
How has the German aerospace industry evolved since the reunification of East and West Germany in 1990?The development of aerospace in Germany is quite unique. We employed 95,000 people before the fall of the Berlin Wall. We were facing hard times until the mid-1990s, but since then, German aerospace has had steady growth in turnover, which is now roughly €20 billion, and employment, which is now at 88,000 people.
Currently, there are 160 companies within the BLDI – comprising all important OEM and supplier brand names and big employers of the branch in Germany, but also quite a number of smaller companies, which are not so well known, but have internationally market-leading products, which are essential in the supply chain of aeronautic industry. Sixty to seventy percent of the turnover of our members stems from civil aviation, and the rest is divided between defence and space-related activities.
How have global shocks like 9/11 impacted this growth?
The upward trend in civil aerospace activity has been so steady that even 9/11 did not have a long-term negative effect. That's why I'm optimistic no matter what the outcome of the current global financial crisis will be. Emerging economies and markets like e.g. China and India create a demand for air travel which will globally grow on a long-term basis.
How is BDLI organized to accommodate the needs of its diverse membership?
Our Board of Directors is headed by the President, Dr. Thomas Enders, who is also Airbus President and Chief Executive Officer. He has been in this position for three years now. We have the rule that the President is elected for a three year term which can be extended every three years if the member companies decide so.
In addition, we have four Vice Presidents with a well-balanced Board of directors. Companies like EADS, MTU and Diehl have now stepped up into positions of leadership at BDLI. Our Vice Presidents run the top BDLI forums, which meet three or four times per year. All in all, more than 300 employees from our member companies are involved in forums and working groups air transport, equipment, space or defence. BDLI forums give reflect the point of view of our member companies, which enables us to communicate in favour of our member's interests in the best-possible way.
BDLI is also responsible for organizing the biennial Berlin Air Show (ILA), one of the world's largest and most important aerospace exhibitions. ILA is Europe's oldest Air Show and dates back to May 1909. The latest ILA in May 2008 was a great success as it broke records for exhibitors and attracted 250,000 visitors. ILA mainly competes with the UK's Farnborough rather than with Le Bourget in Paris. We have a partner country for each ILA – it was India in 2008 and Russia back in 2006. We saw a big Indian representation, showing technologies, aircraft, and helicopters. It was a great success and we look to build on it as we just started preparations for the German participation in Aero India 2009 and for ILA 2010.
Do you already have a short list of potential partner countries?
Yes, but I don't want to disclose on that right now, because we're still in the midst of organisational and strategic talks. One year prior to the air show will be early enough for planning with our partner to be.
The world's best air shows certainly have roots which are firmly entrenched in tradition. The UK stakes claim to a 'flying culture' and adds as proof of their pioneering role in aviation that the Short Brothers were the first true aviation company ever and that Rolls Royce, the world's leading aircraft engine innovator, is a UK icon. When most people think of Airbus, they think of France, which also claims many first in aviation. What would you like to highlight about the tradition of aviation in Germany?
There is no doubt that Germany is a country of pioneers and world's first in aviation. The first officially recorded flight belongs to a German, Otto Lilienthal, and took place in Germany. As already mentioned, ILA is the oldest aviation show in Europe 1909, which debuted months before Le Bourget and Farnborough. And of course, there were quite a number of famous aerospace companies in Germany in the past: Messerschmitt, Junkers, Heinkel, Dornier, Fock-Wulf, just to name a few. Path-breaking technologies like jet-powered aircraft were first industrialized in Germany. As you know, after the end of World War Two, the German aeronautic industry came to a factual stand-still. Rocket-scientists and engineers continued their work abroad. It was not until the mid-1950s, when the industry in Germany started to regain ground in at least two centres, Hamburg in the North – with Airbus today – and MBB (Messerschmitt Bölkow Blohm, today Eurocopter) and MTU in the South. Civil aviation was mainly concentrated in the North, whereas military activities were bundled more in the South.
Where does that leave the capital city, Berlin, where BDLI has its headquarters, and its surroundings? You defined the role of Hamburg and Bavaria, but what about the rest of the country? Do they play any critical niche roles?
It is not a question of niche roles. For us as industrial association, Berlin as the political centre is the key focus of our lobbying and parliamentary work. But also industrial wise, Berlin has gained importance and has developed into a centre of engine manufacturing.
Nevertheless, there are several other regions of Germany, which play a role in the industrial network. Diehl, a large supplier in aviation and defence, has created two aeronautic centres near Lake Constance and in the Nuremburg area. Additionally, quite a large number of specialized SMEs are spread throughout Germany.
BDLI members have enjoyed outstanding growth over the last decade or so, but isn't there some concern about Airbus' newfound corporate strategy to diversify the supply chain globally?
Nearly 70% of the value added from Airbus is being subcontracted, and as Airbus grows, so will the percentage of subcontracted work. But, as they restructure their supply chain, the German supply chain will also have to restructure to get more systems competences. For example, Airbus recently sold the Laupheim plant, which does cabin interior systems, to Diehl and Thales. Diehl is already working on lighting systems for the aircraft interior, so there are good synergies. Thus, under the name Diehl Aircabin, competence for cabin interior activities is emerging and concentrating in Germany.
Complex aerostructures are also a topic in Germany due to the stated intention of Airbus to sell off those activities. Three Airbus aerostructure plants - in Augsburg, Nordenham, and Varel - have been packaged into a newly created separate legal entity, Premium Aerotec, in preparation for mid-term sale to a new investor or shareholder. What has been formed by means of Premium Aerotec, is a very competitive company with more than 7,000 employees with an expertise in metal structures as well as carbon fibre composites (CFCs) for the design, manufacture, and assembly of aerostructures. These are examples of objectives for our equipment and supplier industry coming up with a more and more global market for all system vendors. Generally speaking: in the global competition, we must focus on specialized centres of excellence to stay competitive.
Is enough priority being put on developing the next generation of specialized engineers, who can allow the country to go into these specialized areas? Isn't there concern that there will be human resource bottleneck?
In deed, we have a bottleneck with regards to specialized employees - not only with regard to programme or development engineers, but also concerning qualified technicians. At ILA 2008, we conducted a poll which showed that there are 2,000 vacant positions in Germany. This is quite a high number considering total industry employment of 88,000. Despite the negative impact of the financial crisis, our member companies are still looking for additional people. This is how we differ from the car industry. Despite the global financial crisis, our industry's order book is full for the next five years. If order cancellations will not increase further, we will have a steady business and that's why companies are and will be looking for skilled workforce.
A lack of human resources may be a bottleneck for growth, as we cannot 'produce' additional workers with right skills in just two years. For challenging tasks like industrial ramp-ups of new programmes or for their management, you need three to five years to have specialized teams in place. The BDLI collaborates with several universities to push students to pursue more technical studies. The initiative shows that there's a growth in students going into those technical areas, but it will take some time before those students enter the job market.
What are some other hot topics at BDLI forums at the moment?
Environment is a challenge for the industry, too. Here in Germany we've set up a program that we call Eco- Efficient Flying which aims to find a road to eco-efficient flying by 2050 through the development and implementation of new technologies. This is very much in line with the European Union's Aeronautics Technology Platform, ACARE, which funds research programs related to the target of more fuel efficient aircraft within the next generation of aircraft. Clean Sky JTI, spawned by ACARE, gives this agenda ten years to take root. We are not talking about the 787 or the A350 which are modern aircraft. Any real progress in reducing CO2 emissions will have to come from a different kind of technology, including alternative fuels and new engine concepts. This will take some time. Only the next generation of civil aircraft will reflect this progress, but we have to do the work today to find the way.
The UK has its own oil and gas industry, which has banded together with engine makers like Rolls Royce to test out the possible fuels of the future. Where can the German industry make its mark?
We will make our mark in engines too through MTU and Rolls Royce, where German operations work closely with those in the UK to find new concepts for engines. Also, Airbus's Stade plant, near Hamburg, is a centre of competence for carbon-fibre reinforced plastics (CFRPs). This is where the world's largest CFC structures for commercial aircraft are being built. The dedicated Stade CFC plant has an ongoing collaboration with a local university. Airbus Stade is our champion in this field of the future. This is another competitive advantage which is being developed.
So the development of CFC expertise in Germany is being led by Airbus?
Yes, with regards to quantity. The Stade plant is fully owned by Airbus. We've got extensive industrial expertise in there. The second centre of excellence in this respect is Eurocopter, technology leader with the first full composite helicopter structures on the global market. We've got research and development within the companies and within the DLR (the German Aerospace Centre for research and development) which is actively working on new concepts in aerodynamics which will reduce aircraft weight. This is one key part of meeting our 2050 environmental goals.
Much earlier you mentioned that ILA2008 was cosponsored by India and two years before that by Russia. Does this outline an agenda of the internationalization of the German industry and possibly less reliance on Airbus?
As said before, internationalization of the Germany aerospace industry supply chain is a fact. The Augsburg plant e.g. also has contracts from Boeing. Diehl has heavy interaction with other systems companies worldwide.
One of the goals of the German supply chain is to go worldwide. Numerous companies have subsidiaries in India, Russia, or Poland. Of course, cost savings are a major part of such a move. Quite a number of German software companies have Indian subsidiaries that give them the right cost structure to be competitive.
The CACC in China is now considering which key value-added activities to outsource to foreign companies as part of their large jet development program. In which areas do you feel that your members would be the best partner?
The major topic of course is the current construction of the Airbus A320 final assembly line in Tianjin. Thomas Enders' good experience in such a major collaboration is very important. Let's see what the outcome will be. The first aircraft should be delivered from the line in 2009 and then they will ramp up to full production rates. There are good prospects and good experiences so far, and I'm convinced you have to present beyond simple aircraft sales activities in a region with such huge demand. I believe the same is valid for the entire supply chain. If you want to become a supplier to the Chinese industry in the future, you have to be present. The bigger German SMEs – in MRO and the development or production of components - must follow in building up activities in China. Then, the even smaller companies will have a chance as opportunities 'trickle down.'
But the SMEs are being hit the hardest by the financial crisis. They invested so much money in projects without having any guaranteed order volumes and timelines. Is this a major challenge for some of your members who have an excellent business model and an excellent product, but simply don't have the liquidity to fund any sort of expansion at the moment? How can this be overcome?
This is a problem for all German industry, not just the aerospace sector. A recent poll of our SME members with less than 500 employees accompanying the latest crisis showed that they are suffering because of changed credit lines as well as because of a lack of capital needed for investment in new technologies or expansion. Our role as industry association was to broadcast the problem to decision-makers on the political level and to the public.
Meanwhile, a Federal Government programme forces banks to provide credit lines to their business customers. At the same time, we are currently in close coordination with the Ministry of Economics and Technology to define the frame of a newly aerospace proposed fund which aims at helping SMEs with a good business model to restructure and grow. Funding will have to be short term in nature and should be provided by both industry and government. A similar fund of € 75 Million, already existing in France, might serve as a possible model.
Where do you see the German aerospace industry in five years?
The shape of our industry branch will not be that different, because we've got the big systems companies, that will not reshape within five years time. They're running programs and there's stability with regard to the orders which are on board. The same situation applies to their suppliers. At the same time, I believe the suppliers of the aerospace industry in Germany will be more international within five years. Our industry is striving to have a more international footprint with regard to sites, investment, and customer base. We are looking to move beyond our traditional customers. Also, if Airbus will sell PREMIUM AEROTEC, the new owners will without a doubt supply to worldwide customers like Boeing, not concentrating on Airbus anymore.
| Company: | 德国航空航天工业协会 |
| Position: | Managing Director |
| Country: | 德国 |