Another leading company in the aerospace industry is Airbus, a privately held company based in Europe. While Airbus in considered to be one of the leading competitors of Boeing and many other companies in this industry, since it is privately owned it is difficult to compare much of the numbers. Private companies are not required to report the same information as the publicly owned companies. The company was first created in 1970 and works not only with commercial airliners but also in the defense markets. The company is made up of three segments: operations, programs, and core functions. The main goal of this company is to create the most modern and comprehensive aircrafts for its customers as well as lead with the highest standards of their products and support. The reported revenue for the company as of 2008 is $38.7B.
Established in 1929, United Technologies provides technological services to the aerospace industries and building systems. The company is number 37 on the Fortune 500 list and is a top competitor in the industry. Revenues reached over $58B in 2008 and despite the hard economy they continued to grow. The main vision for the company is to lead in quality of their products and services. Their main goals are led by their ACE mission, which stands for Achieving Competitive Excellence.
KEY SUCCESS FACTORS
If you were to ask the Executive Vice President Airplane Production of Boeing, Bob Dryden, what the Key Success Factors for a company in the Aerospace Manufacturing Industry, he would say to reduce costs and maintain access to foreign markets. Those two key factors are crucial in order to gain continued success in the global marketplace.
In the Aerospace Manufacturing driving down cost is crucial to being able to compete. Dryden states, "We must continue to reduce our costs because cost reductions will be the key to selling airplanes at prices airlines can afford.” Boeing’s ability to lower their prices enables the company to remain competitive and gives Boeing a reputation of passing along the savings to its customers. Other big competitors in the Aerospace Manufacturing Industry include United Technologies, Lockheed Martin, Honeywell International, and Northrop Grumman. The major competitors in the industry also owe their success to reducing costs and they would concur with the statements made by Dryden.
By reducing costs, companies are able to grow and this growth includes job growth and opportunity. The key to success of cost reduction is more and more important to achieve especially in economic downtimes. The Aerospace Manufacturing Industry has been very risky over the past decade and much is an effect of the struggling Airline Industry. The hardship of the Airline Industry has put even more emphasis of the need for a brilliant strategy for cost reduction.
GMP Group Conferences, a company known for hosting conferences and events, held the second series of an Advanced Aerospace Manufacturing conference this November. The focus of this conference was manufacturing, supply chain, and operational excellence for aerospace manufacturers and suppliers, particular focus will feature cost reduction initiatives and increased collaboration with channel partners in other countries.
Maintaining Access to Foreign Markets
The access into foreign markets is a huge opportunity in the Aerospace Manufacturing Industry. If competitors within the industry are able to breakthrough into the developing markets such as BRIC (Brazil Russia India and China) they will continue to satisfy the second Key Success Factor.
According to Boeings website, “Over the past five years, sales outside of the United States have accounted for 70 percent of Boeing commercial airplane sales.” Statistics and feedback of sales outside of the home country were similar among the top competitors in the industry. The growth in overseas sales brings with it a need to have continued access to foreign markets. That can mean placing work in other countries, which in turn creates more job growth.
According to this graph found on the Aerospace Industries Association webpage, foreign trade remains vital to the aerospace industry. U.S. exports of $95.1 billion in 2008 account for nearly half of the industry's customer base. Despite rising imports and aggressive foreign competition, the U.S. aerospace industry maintains a sizable trade surplus (currently $57.4 billion) — the largest of all manufacturing sectors.
Airbus has made plans to increase their productions by opening a new production line in China. This type of move is going to expand their business into the Chinese market and help Airbus meet predicted worldwide demand over the next decade. The initial costs in China will increased initially, but in the future provide airbus with protection to exchange-rate.
The F-16 also known as The Fighting Falcon was built by Lockheed Martin, a large competitor in the Aerospace Manufacturing Industry. This European fighter was in the works since 1977 and is a great example of co-production and the establishment of one of the most successful multinational consortium program in history. Countries involved in the production of this product include Belgium, Denmark, Norway, the Netherlands and the United States. Since that time, fourteen additional countries have participated in manufacturing the F-16. The multinational program continues to grow and strengthen the international partnership that now contains more than 50 industrial companies.
According to Lockheed Martin, "The F-16 is the most affordable and proven choice to meet the force structure needs and security requirements of air forces around the world.” The increased technology enhancements are a clear result of global sustainment and are the reason for the success, reliability, and safety of the F-16.
Dryden of Boeing added, “That market access can also include working with other countries to develop and improve the aviation industry and air travel market in those countries, especially those whose airlines are state owned.” According to the Aerospace Industries Association (AIA), "The potential air travel markets in those countries are huge, but only for manufacturers that are willing to be partners in laying the solid foundation for healthy growth."
AIA also noted that the world air travel market is expected to grow about 5 percent per year more in the Asian markets. This continues growth is expected to increase over the next twenty years. This increase is also going to create a demand for the roughly 15,000 new airplanes to be built. It is also interesting to note that although there is a huge increase for partnerships across the globe, the majority of the jobs that are created from this demand are going to be in the home country of the company.