Charles Edwards Management Consulting

Heartfelt thanks to Joanna Speed for a tremendous inaugural Raw Material Edition of The Aerospace Event! Speakers, panelists, and audience members shared and discussed views on raw material supply constraints, willingness to invest in capacity, pressures from other industries, enduring labor challenges, the need for financially healthy subtiers, and technological change, all of which are occurring against the backdrop of long term industry cycles and a shifting geopolitical environment. #theaerospaceevent #aerospace #rawmaterials

AeroOutlook authors Cliff Collier and Peter Zimm are featured speakers at The Aerospace Event's Raw Material Edition in Beverly Hills next week! #TAE2024 #TheAerospaceEvent #rawmaterials

Join me for an in-depth discussion of the titanium market, aerospace raw materials, and other trends impacting the aerospace supply chain. Thanks to Sheila Kahyaoglu at Jefferies for the invitation! Register at: https://lnkd.in/g4K-MEHq #rawmaterials #aerospace #aerospacesupplychain

The Alaska Airlines door plug panel failure is at least partially the fault of the market environment created by Boeing and Airbus. We do not yet have a complete accounting of the cause, but the detection of loose bolts on other aircraft is in and of itself a failure of the production process. The commercial aerospace production system has been under significant stress for the past decade, particularly in aerostructures which is where recent problems have been found. Loose bolts in doors, loose bolts in rudder systems, improper shimming of fuselage joins, to name a few in just the past twelve months, have plagued assemblies. Why is this the fault of the market structure that Boeing and Airbus have created? Beginning early in the last decade, both OEMs embarked on a cost reduction strategy that effectively, and it was effective in aerostructures, shift margin from the suppliers to the OEMs As someone who was part of that process, I can confidently assert that the discussions were primarily around who deserved the margin more, the OEMs who said they bore all of the platform risk or the suppliers who bore a much different risk that Boeing and Airbus never recognized. Both parties knew there was no viable path to take enough cost out of aerostructures to leave the original margin for the suppliers intact. Suppliers did what they needed to try to obtain a margin that would cover what I would argue is a much more significant risk than Boeing or Airbus faces. After all, they are part of a duopoly. Aerostructures suppliers are in a highly competitive market. This included cutting staff such as front-line supervision and above the shop floor technical support, gutting training programs and holding down wages and benefits. Assembling large structures is hard. There are thousands of parts to assemble with even more fasteners to install to assemble them. Although automation exists for some of this, a high percentage are done by hand. These tend to be the hard ones with bad access, multiple parts to fit up, etc. These are assembled by human beings. Unlike automobiles, the production rates in aerospace are quite slow and the number of different tasks per worker are higher per unit because planes are big. This means the opportunity for on the job learning is limited. I have always used two years as my guide for how long it takes to become a good assembler.  But do we really want aircraft assemblers to learn on the job with overstretched supervision? Boeing and Airbus told the supply chain that prices would have to go down to keep airplane sales growing. Perhaps it is time to ask for enough money from the airlines to build the planes safely. The suppliers need to have the wherewithal to hire more floor supervisors and provide more robust training. Money should be devoted to that, and the suppliers should be accountable for providing it.

PANEL SPOTLIGHT: Aerospace Raw Materials Market — Views from Leading OEMs and the Industry Aircraft production rates continue to rise, yet supply and quality disruptions still bedevil the recovery. Hear from a panel of experts including Peter Zimm, Nicolas Lemoine, Jeff Carpenter, Mesh Feigenbaum and Michael Wagner discuss the aerospace recovery, supply chain challenges and the outlook for aerospace raw materials in this informative, interactive session. https://lnkd.in/gcgJHkpw #tae2024 #theaerospaceevent #aviationindustry #aerospace #aerolambda