WCA September 2007

From the americas

Ms Johnsson of the Chicago Tribune (See above) observed that that new reality, for Boeing, soon could mean facing tough competition from Russia and China, with their declared aerospace aspirations. A proactive Boeing has already hired more than a thousand engineers in Russia, and is helping a Russian manufacturer develop a regional jet. But Boeing’s main overseas focus will probably continue to be Japan, where the American plane maker already dominates commercial jet sales. On 4 th July the Tokyo newspaper Asahi reported that Boeing may invest in a project of Mitsubishi Heavy Industries Ltd to build Japan’s first passenger jetliner. The biggest machinery maker in Japan, Mitsubishi Heavy is a key supplier for the Boeing 787 ‘Dreamliner’ scheduled to enter service in May 2008, and a linchpin of Boeing’s strategy of maintaining close ties with Japanese aircraft parts manufacturers and airlines. Mitsubishi Heavy is expected to make a decision on the jet’s commercial viability by the end of its fiscal year next April. If it goes ahead, production would begin in 2012. China would appear to have found a way to circumvent a US effort to exclude it from the world’s elite space club, while at the same time advancing its interests in another sphere. Writing in the International Herald Tribune , Jim Yardley observed that Beijing is trying to position itself as a space benefactor to the developing world – the same countries, in some instances, ‘whose natural resources China covets here on Earth.’ (‘Blocked by US, China Finds Its Own Way to Space,’ 23 rd May) An example cited is China’s launch, in May, of a communications satellite for oil-rich Nigeria. Not only did China design, build, and launch the satellite: the state- owned Export-Import Bank of China also granted Nigeria $200 million in preferential buyer’s credits (ie a loan) to help toward the roughly $300 million price of the satellite. A substantial financial package was a key requirement when the African country put the project out for bidding. Mr Yardley noted that China has also signed a satellite contract with Venezuela, another major oil producer. It moreover is developing an earth observation satellite system with Bangladesh, Indonesia, Iran, Mongolia, Pakistan, Peru, and Thailand. And, laying claim to the prestige of leadership of the alternate space club, it has organised a satellite association in Asia. The Nigerian deal might be Beijing’s breakthrough into the lucrative $100 billion commercial satellite industry. According to Mr Yardley, Chinese engineers designed and constructed the geostationary communications satellite Nigcomsat-1. A Chinese state-owned aerospace company will monitor the satellite from a ground station in northwestern China. Great Wall Industry will also train Nigerian engineers to operate a tracking station in Abuja, the capital. If successful, the Nigerian satellite could undercut one US rationale for excluding China from the Western-dominated space China takes an end-run around the US into the global commercial satellite market

industry: its uncertain technical mastery. Of course, from the US standpoint the fact that most of China’s satellites technologies are ‘dual use’ – for both civilian and military applications – is another matter. Even as China has participated in different projects with Europe, Russia and Canada, the US has sought for nearly a decade to isolate the Chinese space programme. Export restrictions intended to block the illegal transfer of military technology prohibit US technology from being used on satellites launched in China. “The United States also has blocked Beijing from participating in the international space station,” Mr Yardley wrote. “[And] Chinese scientists are often denied visas to attend important space conferences held in the US.” Of related interest . . . A public opinion poll conducted by the Chicago Council on Global Affairs and WorldPublicOpinion. org, in conjunction with research centres around the world, has found that a majority of citizens in eight of 14 countries surveyed (and a plurality in four) expect China to catch up with the US economically – and that they are comfortable with this. Majorities in most countries said they would expect a positive or mixed outcome from a Chinese ascendancy, with less than a third of respondents saying it would be ‘mostly negative.’ The results of the poll, published on WorldTribune.com (15 th June), show that a majority of the American people themselves perceive no danger in a Chinese economic and military buildup. ❖ ❖ Even as much of the tool-and-die industry in the US continues to decline, a small tool shop in Michigan is flourishing after a return from near-death engineered by Japanese auto maker Honda Motor. Only two years ago, employee-owned Northwest Tool & Die had just taken a $1 million loss on $10 million in revenues; it had $5 million in bank debt, owed $1 million to vendors, and had filed for bankruptcy. Now, after turning its affairs over to Honda – and following its advice – Northwest is in very good shape indeed. Having exited bankruptcy court in July 2006, it reported $12.5 million in revenues and a 6% pre-tax profit margin for the year. Honda accounts for 40% of that business, up from 20% before the bankruptcy. Northwest is aiming for sales of $25 million and a 10% margin within two years. It has won business from new customers, including big Ford and Chrysler suppliers. Its workforce has gone from 46 to 74. (‘A Savior from the East,’ Forbes , 4 th June) As described by Forbes ’s Joann Muller, Honda ‘took Northwest under its wing,’ teaching it more efficient design and manufacturing techniques while steering millions of dollars in new business its way – even though its prices were 50% higher than those of most Asian suppliers. Today, the new production methods have brought Northwest’s tool prices to within 15% of its low-cost Asian competitors. Automotive Honda comes to the rescue of a dying US auto parts company

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Wire & Cable ASIA – September/October 2007