Frankfurt Auto Show (IAA) 2011 – A Look into the Future of Automobile Technologies and Value Chain Architecture

Frankfurt IAA (Messeturm at the background)

After missing one season of the biennial Frankfurt Motor Show (Internationale Automobil-Ausstellung (IAA) in German) in 2009, I decided to head up to Frankfurt on last weekend. The IAA is probably the most important motor show in the world. Of course, even though the German ICE high speed train would have been a little faster, I deliberately drove up to Frankfurt to visit the show. Otherwise, one may ask: who the hell take a train to a car show? So, I cruised up to Frankfurt (am Main) from Bavaria in less than 3 hours. The 150 km/h average cruise on the Autobahn went smoothly until I caught myself in the Friday morning rush hours in Frankfurt city. The IAA was held at the Frankfurter Messe (10 minutes walk from the Frankfurt main train station). 

I was given a forewarning by a friend, who was already there on the opening day, that the Frankfurt Motor Show was somehow disappointing this year, but it didn’t really lower my expectation at all. After my recent disappointing experience at the Paris Airshow (refer to my blog in June), I knew that this visit experience at the IAA could not be any worse. During my 2-day visit, I was fortunate to have the company from friends from the US, Singapore and Italy, all automotive industry veterans (but not the typical street car-freaks with only skin-deep knowledge). They have worked on some of the most fascinating automotive products and technologies. Furthermore, the weather on both days was fantastically good with blue sky and dry warm temperature. Perhaps it was on Friday and on the last weekend, the IAA was not overly crowded and there was plenty of space to hop in and out of the exhibited autos.

Like in the previous IAA, the different auto manufacturers were organized in individual or shared pavilions or exhibition halls. The big auto manufacturers like Daimler, BMW and Audi had individual pavilions with dedicated interior styling to showcase their autos. Manufacturers like Ford and Volkswagen with multiple brands managed to squeeze all their brands into their gigantic halls. Visitor experience in the pavilions was pretty much like eating at any Michelin-rated restaurant. You would go there for the brand experience. In contrast, visiting the mixed brand exhibition halls was like eating at any Singaporean neighborhood food court.  You would go to the halls just to look for your next family car.   

Mercedes-Benz Pavilion (Michelin Restaurant)

Volkswagon Hall (Food Court)

         Well, I must say that the focus of this year’s IAA was definitely very different from the last one I visited in 2007. I was able to feel the strong electrifying endorsement by almost all leading manufacturers (except niche sport car segment) on the rosy future of electrical power train. This year IAA has certainly marked the major shift from conventional IC-engine driven power trains to electrical-centric power trains, whether it is mild, 2-mode or full hybrid, full electric or fuel-cells. Furthermore, the exhibited autos marked not only power train technological shift but also in the vehicular architectural shift, which is only possible with more compact and modular electrical power train designs.

Mercedes-Benz Electrical Power Train

       Perhaps even more significant than the technological shift, there was a strong presence of small and large industrial invaders at the IAA. Within the insignificantly looking Hall 4 at the IAA, I found a myriad of small unknown automotive startups and large established enterprises like Siemens.  There were even interesting showcases from leading German institutions such as Technical University of Munich and Karlsruhe Institute of Technology. Clearly, with hand on key electrical system technologies, these emerging small and intruding big companies pose a clear and present threat to incumbent automotive manufacturers. Imagine the future with Daimler and BMW powered by Siemens or Bosch! Or Siemens or Bosch inside! Something that is not really unthinkable. This could lead to a significant value chain architectural shift from traditional automotive manufacturers to the Tier 1 system suppliers. Nevertheless, I don’t feel that these system suppliers would compete directly at OEM level given the lack of system-integration and product lifecycle knowhow (R&D, testing, certification, industrialization, lifecycle management), which are still immense barrier to new comers (ok, it can be overcome but at a price and time). Anyway, why dirty your hands if you can supply subsystems to multiple OEMs and capture more value?

Siemens Dominant Presence in Hall 4

Technical University of Munich's MUTE electric car in Hall 4

        Coming back to the autos, as usual, every manufacturer showcased their newest products, some of which were simply concepts and some will be on roads real soon. In my view, the main highlights were the premiere of the Mercedes-Benz F125 (with fuel cell plug-in hybrid, BMW i3 and i8 (eDrive electrical hybrid), Porsche 911 (newer “cleaner” boxer engine). It was interesting to see that different manufacturers pursuing different power train solutions. It seems like the dominant technology hasn't emerged yet. With Daimler holding firmly to its fuel cell technology and the remaining manufacturers to pure battery-electrical and hybrid drive technologies, it will be very interesting to see in the future on whether this technological plurality will prevail. My guess is that is could be very likely remain so unless disruptive technologies such as flywheel, compressed air or rechargeable flow battery (designed by 24M) storage systems could really commercialize into a serious alternative to existing energy storage technologies. 
More about 24M: 24M flow battery
More about other energy storage technologies: Hybrid energy storage

Overall, the IAA 2011 met my expectation and was a great experience for visitors with various interests (family outing, car enthusiasts, technology geeks, business and career opportunity seekers). The weather was fantastic and the event was very well organized and managed. After having great Chinese food at the local takeaway Malaysian-run restaurant and a couple of beers at Fressgasse and the Römer located in downtown Frankfurt with my friends, I drove back to Bavaria the next day wondering what kind of auto I would be driving to the next IAA ........   

European Defence Industrial Cooperation Model - An Aspiration for ASEAN?

The Recently Proposed ASEAN Defence Industrial Cooperation

“The Malaysian Defence Minister said that ASEAN countries now spend US$25 billion a year to buy defence assets. With the (defence industrial) collaboration, they hope that the amount could be reduced gradually to US$12.5 billion a year through the development of their own defence industry.”    Jakarta, May 2011.

Recent ASEAN Meeting in Jakarta (Credit: Cyberpioneer/Angelina Chung) 

The Malaysia’s proposal on greater defence industrial collaboration at the last three ASEAN defence ministers meetings has motivated me to spend another fine Sunday morning pondering about this wild idea. Without access to the official proposal paper from the ASEAN meetings, I would just simply gather my thoughts and give a high-level perspective on where this came from and this could lead to.

Lessons and Isomorphic Pressures from the European Model of Defence Collaboration

Public reports on greater ASEAN defence collaboration have not clearly spell out the driving motives of such proposal. Contemporary motives of such regional endeavour have always been the following factors:

• Cost reduction in defence equipment acquisition (economies of scales, lifecycle costs)
• Standardization of defence equipment (interoperability, logistics and spares)
• Technological access (technology transfer and sharing)
• Political alliance (greater political integration through strategic cooperation)

Personally, I hope that this ASEAN strategy is not just another copycat strategy due to organizational isomorphism that was conceptualised by defence scholars who were impressed by the grande European defence industrial cooperation experience. Before arguing for or against such motive, let’s briefly revisit the post World War Two development of European defence industrial cooperation.

The European defence industrial landscape has come a long way since the immediate post World War Two era. The following Cold War era spawned numerous European domestic defence companies and their ecosystems of lower tier suppliers. Almost without exception, all major European countries created their own domestic champions such like in the military aircraft sector such as Aérospatiale (France), Dornier/MBB (Germany), Aermacchi (Italy), Saab (Sweden), Fokker (the Netherlands), CASA (Spain) and the British Aerospace (UK). The end of the Cold War in 1989 rapidly thawed the frozen barrier of the defence industries as defence budgets were significantly cut back due to the fall of the Soviet Union and its once mighty military apparatus. Lacking in new orders for defence equipment, many of these national champions in the original NATO pact (excluding new NATO members / ex-Warsaw Pact members such as Poland and Czech Republic) were forced to consolidate, rationalise and look towards export markets to survive. With strong political support, this ultimately resulted in the creation of a few giant defence conglomerates such as EADS, Finmeccanica, BAE Systems, Thales and Safran.

At the same time, program specific consortia (formal legal business entities formed by different companies) were formed bilaterally and multi-laterally among nations. Prime examples are the Panavia Tornado and Eurofighter jets, the FREMM frigates and Tiger attack helicopters. These programs were massive in terms of technological complexity and financial costs that have to be bureaucratically managed by quasi-governmental organizations such as OCCAR (Organisation Conjointe de Coopération en matière d'ARmement) and the EDA (European Defence Agency).

FREMM Frigate (Credit: Naval Technologies / DCN)

Despite massive industrial consolidation at both commercial and governmental fronts, the whole European defence industry today is considered still very fragmented relative to the US in terms of Defence budget per number of Prime Contractors (or commonly known as Tier 1 systems suppliers), especially the land and marine systems. European defence industry has experienced many ups and downs during its evolution. Many defence program failures (in terms of costs and product performance) were sad memories not unlike that of the current EURO currency crisis. If defence collaboration is so meaningful, why is the European defence industry still so fragmented and currently rethinking about alternative future cooperation models? In the views of many experts and me, the key reasons can be summarized as follows:

• National interest (defence industrial self-sufficiency, jobs, technologies and exports)
• Differences in national defence requirement
• Hidden and real costs of program management complexity in multiple stakeholders’ ecosystem

In fact, there is an emerging trend of divergence in defence industrial strategies especially in highly complex next generation defence systems such as unmanned combat and surveillance airborne systems (UCAV and UAS). Leading European nations have been weighing the costs (complexity of management, supply chain and political influences) and benefits (economies of scale, technological access, joint funding and specialization) of cooperation. The outcome from this cost and benefit analysis are often factors such as the participating countries (how many and which countries), the scope of cooperation (e.g. financial, R&D and production) and equity of work-share. Currently, French and the British have been talking about a bilateral cooperation in unmanned air combat systems (possibly the 5^th or 6^th Generation Fighters – depending on decision to skip the 5^th Generation) without involving the German and Italian.

  On the whole, the European defence industry is anything but coherently aligned and integrated. In my view, all European nations still practice cherry-picking of the best mix of cooperation arrangements for and amongst themselves and other non-European countries especially the US (e.g. MEADS theatre missile defence system and the Joint Strike Fighter). The naval and land systems (e.g. NEXTER, Krauss Maffei Wegmann, Thales, Safran, BAE Systems) companies are not showing any sign of giving up their current lucrative market shares for a greater European defence industrial integration, even though they are pretty much reliant and owned by their respective nations. In fact, these European defence companies are some of the most aggressive competitors in emerging markets like India, Brazil and the Middle East. Considering the GDP, tax and employment contribution of defence industry to European countries' coffers, it is easy to understand why further European defence industry integration has been a daunting task to achieve. However, the current adverse financial situation in Europe and the ramification on its defence budget outlays will certain be a strong catalyst to force greater cooperation and rationalisation. Nevertheless, there will be some counteracting forces towards against greater European integration. If European export campaigns in emerging markets in Asia, South America and the Middle East would to bear fruits against the even more desperate American and Asian competitors, it will decelerate further consolidation and cooperation.

Rethinking about the Proposed ASEAN Industrial Collaboration

I would like to come back to the ambitious potential annual saving of US$12.5 billion by 2030 (i.e. 50% of ASEAN current annual military expenditure) quoted by the Malaysia Defence Minister. In my view, this figure is nothing more than a very rough estimate based on current geo-political-technological assumptions. Perhaps it is more likely that this figure has been overstated for political purpose of kick starting some grand strategies. Here again, it sounds so much like what the Europeans have been trying to do over the last few decades. It would be politically correct for ASEAN integration at the very best and could be potentially very costly at the very worst.  

Without more detailed information about the ASEAN proposal, I would propose some key questions that could help ASEAN policy makers in their execution of their strategies before ending up in disastrous endeavour that could strain bilateral and multilateral relationships.  

• Have the ASEAN proposal considered potential hidden costs and barriers of regional industrial cooperation?

• Are there any stakeholder analysis and alignment with respects to long-term strategic and political aspects?

• Is there any hope of harmonizing of system requirements amongst ASEAN militaries? If miraculously yes, how are ASEAN nations going to manage the different levels and complexity of national customization?

• What kind of defence systems (technological level) should be involved in this industrial collaboration? (Simple systems like rifles or advanced systems like unmanned aircrafts)

• Do ASEAN nations have enough technologies capabilities and industrial base to cooperate (not only prime contractors, what about lower tiers of suppliers)?

• Which kind of industrial cooperation model (e.g. work-share and offset agreement)?

• Would the collaboration be robust enough to hold itself against macro-economical forces (currency, inflation, etc.) over time? (i.e. how can ASEAN nations guarantee the survival /sustainability of defence companies in the entire supply chain?)

The recent proposal of ASEAN industrial cooperation is a good start for further analysis. However, it is unlikely that there could be any major defence system collaboration programs  in the short to mid-term given current technological and political landscape of ASEAN. The potential saving in defence industrial collaboration requires further rethinking and greater scrutiny. 

Source: Maritime Security 
ASEAN ADMM 2011

A visit to AUDI automotive plant & headquarter

I had the opportunity recently to spend an fine afternoon visiting an AUDI plant with a friend from Singapore. Even though after working in automotive industries for many years, a visit to an automotive plant is always interesting. To me, automotive plants are such complex system that no matter how many times I have visited them, there are new things to see. The plant we visited was AUDI's flagship plant in Ingolstadt that manufactures the Audi A3, A4, A5 and Q5 series as well as bodies of TT coupé and roadster. As that was the first time visiting an AUDI plant, I actually anticipated a plant that would be more modern and trendy than my outdated memory of Daimler's automotive plants, where I used to work. To my disappointment, the AUDI plant could pass off as just like another Daimler plant. I guess, modern automotive plants in Germany, regardless of brands, look more and less the same nowadays.

Audi AG Forum (Credit: Audi AG)

The visit began with a 15 minutes video introduction of the history of Audi and its current global footprint. In the visit, there were also other visitors who were receiving their brand-new AUDIs on that day as well as visitors like us who were simply interested in how AUDIs were born. We were then ushered to collect our headsets so that the plant tour guide didn't have to compete with the rumbling background noises during our visit. Fortunately, we had an excellent female guide, who gave such a good technical explanations of the production technologies. From the types of questions posed from the visitors, I was pretty sure that many of the visitors in our group were engineers as well. I guess it's tough to be a good plant tour guide in the Land of Engineers. Nevertheless, the tour guide put up really a good show by answering tough questions confidently and with high level of enthusiasm. I guessed her job title as a tour guide was really understated. Maybe AUDI engineers do get a chance to become guides once a while, hmm......

The first station was body stamping station, where we saw the gigantic press machine (3000 to 7000 ton) stamping flat steel sheets in multiple stages until they looked like parts of car body. The process is fully automated with only a few workers, who did the monitoring and fork lifting of materials before and after the stamping station. Interesting, the tools used in the machine were carefully color coded to prevent mixing up between old and new molds. We have been told that these molds have specific life-spans and are required to be refurbished at regular interval.

Gigantic metal sheet stamping machine - blue colored blocks are the molds (Credit: Schuler AG)

The second station was body shop, where we found army of robots welding the stamped body parts into the form of a car. Here, the precision of automotive manufacturing during the entire tour was most felt. We could see the robots, in eerily noiseless, assembling the body parts and conducting spot welding. Moreover, we also saw the more elaborate laser welding on the car roof with the side shells. 

The third station was paint shop, where the welded car bodies were prepared, painted and polished. Here, a total of 5 layers of surface treatment were given to ensure the shiny and deep surface finish look on all AUDI. The painting process was quite unique as the entire car bodies were rotated 360 degree and dived like submarines into the cathodic electro-phoretic bath before surfacing for further layers of paint.

Electro-dip painting station (Credit: Dürr AG)

The third station of the tour was the final assembly, where the empty painted car bodies were equipped with all the "organs" and "muscles". The assembly line consists basically of 2 parallel sub-lines. One for the chassis that includes the dynamic modules like suspensions, engines, transmission and drive shafts. One for the bodies and interior modules like dashboard, seats, windows and upholstery. At one point, the two "sub-lines" merge at a station that the Audi (and also the Daimler) workers affectionately called the "Hochzeit" (marriage). At the "Hochzeit" station, the body was lowered and attached to the chassis using just 12 bolts. After this station, the wheels were assembled onto the cars and readied for the final station.

"Hochzeit" (marriage) station between chassis and body (Credit: Audi AG)

The final station of the tour was function test and quality check. Here, the engines of the assembled cars were started and a roll test sequence was carried out to check the key functions. After which, quality inspectors did a final visual check on the interior and exterior under bright fluorescent lamps before signing the finished cars off for delivery. 

All in all, the tour took about 2 hours, which certainly didn't feel like it. Overall, the tour was less interesting than I had expected, but it was nonetheless time well spent. I guess the most important takeaway I gained from this visit was that automotive production is still one of the most remarkable icons of production complexity, technologies and supply chain designs. This visit did refresh my production knowledge a little since I left the automotive industry four years ago.

Audi R8 GT (Credit: Audi AG)

Virtual Plant Tour: 

http://www.audi.de/de/brand/de/unternehmen/produktionsstandorte/ingolstadt/virtuelle_werksfuehrung_ingolstadt.html

Articles on Innovation, Manufacturing, Outsourcing and Off-Shoring

A series of recently published articles by MIT’s Technology Review by leading scholars such as MIT’s Suzanne Berger and Harvard’s Willy Shih, on the interdependence between innovation and manufacturing have pointed out the long term hidden costs of ongoing out-shoring and deindustrialization trends in the US manufacturing industries. Even though the ideas in these articles are neither really ground breaking nor new, they left me wondering about the reversibility of such persistent and destructive trend of off-shoring for US industrial base. More specifically, I’m thinking about how national policy and individual company could cooperate to salvage themselves out of this seemingly never ending trend of deindustrialization. However, to come to this point, one has to be clear about the difference between outsourcing and off-shoring. The common confusion or misconception of equating outsourcing to off-shoring is due to the fact that, in both cases, business operations are transferred out of the company. But, the commonality between outsourcing and off-shoring ends here.

The term “outsourcing” gained popularity in the 1980s and 1990s as a business strategy to focus on competitive business competences (Mullin, 1996). It’s a way to shed unnecessary assets and complexities that do not contribute directly on its core business operations, thereby freeing valuable resources for developing core businesses (specialization or division of works). Outsourcing can be as simple as moving operations and services that were previously done in-house to the neighboring suppliers in the vicinity (outsourcing) or to overseas suppliers thousands kilometer away in Asia (off-shoring + outsourcing). The motivations of outsourcing have been economies of scale, specialization (core-competence focused and work division) and simplification (even though controversial).

On the other hand, the term “off-shoring” means transferring business operations and services overseas. Off-shoring gained momentum in the 1980s not really due to outsourcing benefits but more a result of globalization. Lower operational costs (wages, energy, land, capital minus transport and complexity) and attractive local markets drew MNCs and SMEs from developed nations to emerging nations. The positive side effect of off-shoring of manufacturing across nations has been economical and industrial development in emerging nations around the world, while profiting developed nations handsomely (a fair trade, isn’t it?). The question remains in the sustainability of such off-shoring model, as highlighted in recently articles, especially on innovation.  

Outsourcing may not always bad for national innovation if outsourcing is kept within the national industrial ecosystem, where OEMs and suppliers can still interact actively in innovation. However, if outsourcing is going overseas, this interaction will be significantly hampered by geographical, language and national barriers. Even with modern IT technologies that facilitate remote collaboration and interactions, there will be problems. Innovation could benefit Multi-National Companies with global sites but not the local players in the national industrial ecosystem (e.g. manufacturing industries in China relative to the US).

Off-shoring may not also be bad idea if only non-core operations (e.g. commodities and back-office jobs) are off-shored. The tricky part is how companies define their core business operations.  In Apple’s case, manufacturing (including assembly) is not considered as its core business operation, keeping only R&D and services. It would be very hard to believe that companies such as Ford and Boeing would end up considering this extreme business strategy. Nevertheless, NASA’s (a governmental organization with organic R&D and production capability) recent complete outsourcing of design and manufacture of entire future space systems has already proven that this is not unthinkable.     

In my personal view, the main issue here is the different views of the business environment of individual companies and their government. To solve off-shoring induced innovation disruptive trend, individual companies and government have to align their strategies, which, in reality, a real challenge of fine balance between national and corporate fiscal risks. While it is unlikely private companies would take any risk for the sake of national industrial security, however, government could exert influence on OEMs (companies on the highest level on the supply chain hierarchy) to adjust their supply chain strategies to enhance long term industrial and innovation sustainability.  At the same time, government provides incentive and development supports to suppliers in the innovation and industrial ecosystems to enable them to remain competitive in spite of globalization forces.  

My proposal for the sustainment of national industrial ecosystem:

1) Educate and support OEMs to optimize their outsourcing and off-shoring strategies (considering greater involvement of local suppliers in national ecosystem) in view of long term sustainability of their industrial and innovation ecosystems.

2) Educate and support suppliers to maintain and improve their global competitiveness by tailoring their competences and capabilities to their upper tier customers (e.g. OEMs).


        These articles highlighted the macro-economical issues that urgently need to be addressed. It's a pity that these articles did not discuss more about the possible mitigation actions that the US government could consider. For the case of the US, the above-mentioned two-pronged mitigation actions will be necessary. For the case of other highly industrialized nations, like Germany, which has a strong and innovative SME base, a strong and continuous incentive for local OEM’s should suffice. 

Links to recent articles from MIT Technology Review:

http://www.technologyreview.com/business/37932/page1/
http://www.technologyreview.com/business/37957/?mod=related
http://www.technologyreview.com/business/37956/page1/

Visit to Le Bourget, Paris Airshow 2011

The biennial Le Bourget 2011 was held from the 20^th to the 26^th June at Le Bourget airport, 12 km away from and northeast of Paris. The Le Bourget is one of the top three Air Shows in the world, along with Farnborough (UK) and Singapore air shows. This year, the business atmosphere was somehow cooled and dampened, perhaps reflecting the incomplete economical recovery and worries of many countries, declining defense budgets of the European nations and the US. Hence, the Le Bourget 2011 was surprisingly small in scale, lacking in exhibits and participations from leading aerospace companies. Furthermore, the visitor experience was somehow disappointing. The weather didn't help much either. 

Day 1-3: Plenty of space under Airbus A380 during daily downpour (Credit: Badische Zeitung)

In the exhibition halls and tents

Le Bourget 2011 was not as big and comprehensive as I had expected. The business atmosphere was pretty dampened mainly due to cutting defense budgets in most European nations and the US. Many global leading aerospace companies shied away from the expensive exhibition halls and were only present in their chalets (for business to business meetings) and outdoor aircraft static exhibits, which their costs were mostly absorbed by the US Air Force through their participation. The absence of US leading aerospace companies such as Boeing, Lockheed Martin and Northrop Grumman in the exhibition halls has greatly reduced Le Bourget’s leading position in aerospace exhibition. The conservatively designed exhibition stands of other aerospace giants, such as EADS, Finmeccanica did not help the dampened atmosphere much either. Their exhibition stands were unsophisticated, plain and somehow lacking in exhibits. The only other European aerospace giant, BAE Systems, was not even present in the halls! So much for the business climate this year!

Another personal disappointment, Le Bourget 2011 was very focused on aerospace systems, i.e. fixed-wing and rotary-wing aircrafts and space. I was disappointed that there weren’t more land and naval systems, which were more represented at Farnborough and the Singapore Air Shows.

Fortunately, the climate at the suppliers was much better. I could feel that the suppliers were more upbeat than the aircraft assemblers. In any case, whether Airbus or Boeing wins, globalised suppliers always get a share of them. For example, many French component suppliers, which are located just kilometres away from Airbus headquarter in Toulouse, also supply to Boeing in Everett in the US as well. Similarly, numerous American suppliers supply to Airbus as well.    

The aerospace emerging players such as China, Turkey and South Korea were also present. One of the highlight from the Chinese was the cabin mock-up its newest commercial jet the COMAC C919 was unimpressive and conventional at best. South Korean and Turks showcased their ambitious programs of military helicopters and jets. The Japanese announced some good news about the developmental progress of its newest regional jet MRJ (Mitsubishi Regional Jet).

The Russian presence was quite dominant with its large showcase of recently consolidated aerospace conglomerates such as UAC (United Aircraft Corporation that consolidated MIG, Sukhoi, Tupelov, Yakovlev etc.) and Oboromprom (Russian Helicopters including Kamov and Mil) and their so call newest products, actually heavily upgraded versions of their legendary Cold War products.

Russian UAC exhibition stand

The flying display

As much as I would like to finish my job of visiting the supplier stands in the exhibition halls, it was hard for me (perhaps anyone) to stay in-door whenever the roaring sound of high-speed jets started echoing in the halls, which served intuitively like calling bells for the visitors to move to the next exhibition program. The daily flying display started at 13:30 and ended at around 17:30.  Unfortunately, the weather wasn’t very kind from the first day to the fourth day as the dark low level clouds obscured blue sky, greater restricting the altitude of the flying display (especially for the fighter jets doing vertical looping).

Flying premieres of the vertical wings

The flight show schedule was adjusted daily according to the weather situation. Day two commenced with low flying helicopters such as Siebel unmanned Camcopter, the AgustaWestland AW149 helicopter, Eurocopter X3 hybrid rotorcraft and EC175 helicopter and lower-decibel generating lightweight aircrafts. This year saw the premiere flying display of the Eurocopter high-speed X3 hybrid rotorcraft (I refuse to call it a helicopter). However, the X3 failure to demonstrate its maximum speed called for some disappointment from the spectators. The X3 flew the standard helicopter flight manoeuvre and skipped the highly anticipated high-speed level fly-pass over the runway.

X3 Hybrid High-speed Rotorcraft

The fast jets

We were rewarded for our patience in the drizzling rain with some clearing of the cloud and finally, the fast jets rocketed one by one into the sky. Without saying, the first was the Dassault Rafale fighter jet in its special 30,000 flight hours commemorative dark grey colours, which didn’t make it easier to spot in the grey cloudy sky. Fortunately, the French air force pilot flew impressive low-level stunts beneath the cloud layer.

Dassault Rafale in commemorative colours pulling negative Gs (Credit: Badische Zeitung)

Rafale at full-afterburner (Credit: M. Scott Mahaskey/Staff)

The Eurofighter Typhoon also showed its presence at the display but it was definitely flown by, my guess, by a less experience Italian air force fighter pilot. To my disappointment, the 5 minutes display of the Eurofighter was much less spectacular than that of the Rafale and it was really a shame that the pilot didn’t push the aircraft to its limit. The Eurofighter flew more like a Cessna, making boring and unimpressive loops and rolls throughout the display. Even before the end of the display, my mind was already telling me how the cash-strapped Italian government has been punishing its Air Force by cutting flying hours of its Eurofighter pilots.

The legendary Lockheed Martin F-16 Viper also flew this year and, as usual, put up a respectable and familiar display of very tight and high-speed turns, which put Eurofighter to shame. It was piloted by US Air Force pilot based in Germany and was worth every cents of my ticket.       

The whispering giant Airbus A380 in Korean Air and Airbus colours

It was a free marketing gag for the Korean Airline (KAL) as Airbus borrowed KAL’s not yet delivered A380 for some aerobatic flying during the show. Looking from the ground, the A380 looked more like an airship than a plane, performing some manoeuvre more likely performed by an Zeppelin airship. Anyway, it’s always interesting to watch the whispering giant rolling in the sky. True to its well-known nickname, the whispering giant, the A380 flew with an eerily low noise. For unknown reason, Airbus finally brought in its own A380 in Airbus colours from Toulouse on the third day of the air display.  

Whispering A380 in Korean Airline colours showing off a steep take-off

Extreme aerobatics by the little giants

The Alenia/Lockheed Martin C-27J military cargo aircraft flew like a light aerobatic jet, performing loops and aerodynamically impossible stunts. The rudder and rear stabilizers authority was very good and the aircraft responded impressively to each rudder and stabilizer deflections visibly. The aircraft was performing slaloms in the air just like a car. The most spectacular part with the aggressively steep and high speed landing approach, somehow similar to the Sarajevo landing approach (a defensive landing manoeuvre against hostile firing during landing) often performed by the German Luftwaffe Transall C-160, which ended with a thrust reversal manoeuvre that displayed the C-27J reverse rolling capability in case it overshot its parking space.

The C-27J was followed by its bigger brother the Lockheed Martin C-130J, the largest version of the venerable C-130 series of military cargo aircraft. The C-130J also put up a respectable aerial aerobatic display. Besides the manufacturer of both cargo aircrafts, both aircrafts use the same engine, which reduces the logistical footprint immensely. Both aircrafts have really succeeded in impressing the spectators and in shedding off the common belief that cargo aircrafts are boring to fly.

 Alenia/Lockheed Martin C-27J rolling steeply overhead before final approach

The green flyers

This year flying display also marked the increasingly emphasis on future propulsion systems and fuels. There were 2 display aircrafts that use hybrid and electric propulsion systems. They are from Diamond aircraft and EADS Innovation Works. Furthermore, Boeing flew in its 747 flying test-bed that uses fuel mixture containing 15% bio-fuel. Most importantly, the highlight of the event was the Swiss Solar Impulse aircraft, which didn’t make its debut flying display at Le Bourget due to poor weather. The Solar Impulse uses 100% solar energy for propulsion.

Review of Le Bourget Air Show

Overall, Le Bourget 2011 was a good show, even though the event did not turn out to be as big and interesting as I had expected. Personally, I thought that Farnborough and Singapore Air Show are better organised and more successful in the following ways.

First, the visitor experience at Le Bourget was less than satisfactory (I’m being very polite and diplomatic here). The signboards, marshalling and organisation were very confusing and rather ineffective. It seemed that the welfare of the visitors was not adequately addressed (too little visitor centric planning). Amenities such as café, washrooms, information counters were poorly indicated. The washrooms were embarressingly small and absolutely insufficient to cater to the visitors (it was already bad enough on trade days; you can imagine what would happen on public days!).

Second, the French organisers have not made use of the opportunity to generate profit from food and beverages. Pity that the renowned French cuisine was not presented at all at the event. What a waste to showcase French gastronomy to the international visitors! Wherever I went, I saw the disappointment from the look of many international visitors, who had to swallow dry baguettes, French chocolate donuts and sandwiches throughout the event in desperation of satisfying their hunger.

Third, security was surprisingly weak. All visitors were only given a visual and magnetic scan at the entrance. There was no CT-scan or explosive scan at all. By looking at the number of high ranking politicians, military top brasses and senior business executives present at the event, one could imagine the consequence of any lunatic actions.   

Finally, I felt that Le Bourget could be better organised in public transportation (not only for the ingress and egress to the exhibition but also considering the entire transportation system in Paris). Coincidently or rather deliberately, some Paris subway drivers and staffs (underground railway transportation) decided to strike in the same week and caused massive havoc in Paris transportation. The frequency of Le Bourget shuttle busses were very low. A typically 45 minute trip from Paris downtown to Le Bourget took almost 3 hours for visitors. The train stations and bus stops looked like refugee camps in Africa. There were no transportation marshals to alleviate the situation. I felt that there was not a slightest sign that the French city had done any pre-emptive planning in support of the Le Bourget Air Show in case of such agonising and unfortunate situation. I think if the French organisers would put a little more of its systems engineering from its world-class aerospace industry into its world-class event, it would have turned out much better. The benchmark has been lowered for next year’s Farnborough and Singapore Air Show. 

End of Show - Until 2013!

The BRIC League in the Pursue of Global Aerospace Industrial Supremacy

This review summarises the current state of aerospace industries in the BRIC countries and provides a pin-hole peep into the future for the global aerospace industry.

Why Aerospace Industry?

Airbus A380 Production (Credit: Airbus / Masclet)

    When nations choose to display their national pride in technological advancement, aerospace industry always comes out top of the list. Try recalling the launch of the Russian Sputnik into the space, the ambitious America’s Mission to the Moon and the creation of the Pan-European consortium Airbus. Momentous events such as these have always been seen as testaments of pride and global leadership for nations. Why has the aerospace industry always been used as the trophy of emerging nationhood and global dominance? My guess is that aerospace technologies have remained as mystifying to nations as they were more than a century ago since the first controlled flight over Kitty Hawk in 1903. It is one of the ultimate technological frontiers, among others, that provide technological spill over to other industries, such as advanced materials. Moreover, products of aerospace technologies are generally more visible to other due to its use in the airline industry or defence. Try comparing Paris or Farnborough Air Shows with Biotechnica (Europe’s most important exhibition for biotechnology, haven’t heard of it, right?). These are probably some good reasons that drive emerging nations across the world in diverting billions of dollars into this politically contested and profit-opaque industry from many other possibly more lucrative and essential industries like agriculture and energy.

The BRIC Countries’ Aerospace Technological Development

    The BRIC countries that consist of Brazil, Russia, India and China (therefore the acronym BRIC) are the economical growth magnets for global imports and products, undeniably the engines of global economy. Logically, none of these countries have shown desire to leave their domestic markets for exploitation by the foreign players. Be it washing machines, automobiles or consumer products, these nations aim have a slide of their own market and create their own domestic players that could hopefully one day compete with the foreign 1^st tier global incumbents and perhaps even in their own tufts in the future. That includes the aerospace industry. Interestingly, the aerospace industries of the BRIC countries have shown remarkable technological achievement relative to other industries. For example, the highly successful Brazilian Embraer and Russian Tupolev range of commercial regional jets and Chinese J-10 and J-20 stealth fighters. This is due to a number of pragmatic and critical reasons. First, the aerospace industry is always somehow associated with national defence. All aircrafts can be militarised, even for simple propeller driven aircrafts like the Cessna or Beechcraft. Countries develop their aerospace industries to support national defence. With the exception of Brazil, all BRIC nations have been latecomers in the commercial aircraft industry and have predominantly focused on military aircrafts.

    Among the BRIC nations, Russia has the longest aerospace experience and technological capability. It had a global commercial aircraft industry that mainly served the Warsaw Pact nations and allies. In fact, Russia introduced in 1956 the world’s first operational commercial jet, Tupolev Tu-104, which unfortunately wasn’t very popular (only 200 built). Subsequent Russian aircrafts experienced limited market success mainly due to political market constraints. Even after the end of the Cold War, Russian commercial aircrafts were not globally competitive due to the lack of development funding, technological inferiority and western safety standard. It is only recently that Russia returned to take on the global commercial jet market with the MS-21 and SSJ 100 regional jets, albeit with very strong technological assistance from private western aerospace suppliers.  

Sukhoi SuperJet 100 (Credit: Businessweek)

    China recognised the strategic and immediate need to have its own aerospace industry after the defeat of the Chinese nationalist government in 1949. After several decades of technological learning through licensed production, reverse-engineering, technological cooperation and indigenous development, the Chinese aerospace industry is ready to expand its global aerospace footprint today. In fact, China has once attempted in the 1980s to enter the commercial aircraft market with the Y-10 commercial jet, which was eventually abandoned due to various techno-political reasons. Since then, China diverted its effort entirely towards military aircrafts. It is only very recently that China staged its prominent comeback with the COMAC C919 and ARJ21 regional commercial jets. Like the Russian, Chinese aircraft company, COMAC, fully exploited the force of globalisation by getting major western aerospace suppliers onboard, thereby providing valuable technologies in the Chinese aircrafts.   

ARJ21 (Credit: COMAC)

C919 (Credit: COMAC)

    India’s aerospace industry is the least developed among the BRIC nations. It is still at its infancy stage of development and has yet to produce any truly successful aerospace product in both its domestic and the global markets. Some notable products are the Indian Light Combat Aircraft and Light Combat Helicopters, which experienced severe development schedule and cost overrun, even with foreign technical experience from the Europeans and Russians. Commercial aircraft designed and made in India will be highly unlikely in the next two decades. Even so, aerospace technological development in India will certainly benefit from the imminent technological transfer packages that are associated to Indian’s future purchases of military aircrafts from the US, Europe and Russia.

    Brazil’s aerospace development is the most remarkable among the BRIC nations. Brazil can boast its aviation heritage with some of the pre-eminent historical aviation pioneers such as Alberto Santos-Dumont, who invented the world’s first hybrid-lift aircraft. Nevertheless, the development of Brazilian post-war aerospace industry would not have been possible with the help of the Americans and Europeans. After several decades of foreign technological aid and indigenous effort, Brazil prides itself as the world’s fourth largest commercial jet exporter, among the big players like Boeing, Airbus and Bombardier.

    In contrast to the aircraft segment of the aerospace industry, it is interesting to note all BRIC countries already possess operational space systems such as satellite and space launch vehicles (yes, rockets!). Moreover, China, India and Russia have operational ballistic missiles (intercontinental or tactical ballistic missiles). What can we really derive from this is that the technological evolution and advancement in these countries is really simply dependent on the national interest and resource prioritisation and allocation.

    The Achilles’ heel of BRIC aircraft industries is the lack of competitive system technologies such as engines, sensors and avionics. That’s why all major aircraft programs in the BRIC nations are still relying heavily on western system suppliers. This industrial weakness will certainly change in the near future especially in Russia and China. Brazil will likely to continue to rely on its trusted western suppliers from the US, Canada and Europe, while focusing only in system integration and sales.     

What’s on the horizon and the Implications for the Incumbents?

    One thing for sure, the global aerospace competition will intensify. Incumbent aerospace players such as Boeing and Airbus can no longer to operate in the same way as they had in the past decades. The line between partner and competitor will diminish. Mainly due to globalising western aerospace suppliers, technological barriers and edges will become more temporal and opaque. More cooperation among aerospace players is expected and a new form of industrial competence, cooperative competence, will be in great demand and developed. Environmental friendliness, passenger flying experience and lifecycle cost (not just aircraft price) will be the key competition differentiators. The non-technological factors such as on-time delivery, airport ecosystem compatibility and after-sales support excellence will play greater part in the product differentiation among players.      

    On the military front, stealth and unmanned aircrafts will become the indispensible platforms of the air battlefield in all global theatres. Future Systems-of-Systems war-fighting concept will see greater integration of aircrafts into the gaining greater battlefield awareness (C4ISR) and more responsive target allocation. For sure, the world’s air forces will decline in size but increase in terms of asset value due to exponential increase in price of military jets and support complexity. There will be greater civilian-military integration as modern aircrafts will no longer be serviceable by drafted airmen, who will need greater expert support from civilian contractors.

Figure: Manned-Unmanned Aircraft Teaming (Credit: Boeing)

In conclusion, the aerospace industry will become more complex and more systemic in nature. It will require a whole new range of disciplines and expertises that go beyond traditional aerospace fields. It will certainly remain one of the key growth and most dynamic industries in the coming decades.    

Boeing Rotorcrafts

COMAC