Dassault has bucked the trend among business jet manufacturers of announcing massive job cuts, furloughs or temporary factory closures since the beginning of the economic downturn in 2001. Still, the French company has significantly reduced production rates for its Falcon line.
In an interview at Dassault’s Saint-Cloud headquarters near Paris early last month, Jean-Marc Grillet, senior v-p for industrial operations, explained how rebalancing the work- force between civil and military programs and reducing overtime and subcontracting work, among other actions, has made this possible. He also told AIN that computer-aided industrialization–now in its early stages–is expected to yield even more production flexibility in the near future. This should translate into reduced production costs by having more work done in countries with lower labor costs.
“However, having no layoffs does not mean that our workforce has not decreased,” Grillet said. Dassault has been implementing an early-retirement plan, affecting some 800 workers in the 2001 to 2005 period. Dassault Aviation employs 8,700 people, not including subsidiaries, such as Dassault Falcon Jet in the U.S. Of this total, 2,500 are production workers.
The Falcon production rate peaked in mid-2001 at seven aircraft per month. It is now at four per month “and may decline further if the business aviation market remains depressed,” Grillet added. Annual rates should be calculated with “a bit more than 11 months” per year, due to holidays.
During the economic boom of the late 1990s Dassault had chosen to boost the Falcon production rate in such a way that it remained flexible enough for a smooth downsizing if needed. This involved temporary jobs, subcontracting and overtime. Temporary employees numbered approximately 300, or 10 percent of the then-3,000-person production workforce. Now there are “close to zero temporary employees.”
Grillet does not see overtime as a good strategy for the long term. “It is costly, and we used this mainly to catch up on some delays,” he said.
Coping with reduced production rates also included getting back to one shift, instead of the two- or three-shift schedules that had been in place. And the general trend toward more flexibility takes automation to a higher level. In Argenteuil, for example, a “flexible cell” features eight five-axis machining stations that can run 24 hours a day.
The downturn has also prompted Dassault to bring some subcontracting work back in house. According to Grillet, some subcontractors have since been laid off “because of
the reduction in production rates, but not because of our repatriating work.”
In the past, during an earlier downturn, Dassault had repatriated some subcontracting work in a quite brutal manner, causing some small firms to shut down. But the French manufacturer regretted this decision when better times returned, finding it difficult to locate companies that could (or wanted to) work for Dassault, sources in the French trade press told AIN. Since then the company has ensured it takes care of its subcontractors.
Dassault has also redistributed jobs within the company to weather the crisis better. Each of Dassault’s seven factories in France, although specialized in its particular field
of competence (metal machining, composites, flight controls, wing assembly and so on), has both civil and military activities under its roof. Changing the breakdown of the workforce between civil and military, depending on the workload, has contributed to the absence of either redundancies or major hiring needs.
“We have been lucky that recent military deliveries picked up while civil production rates plummeted,” Grillet pointed out. Dassault is currently producing four Mirage 2000s per month for delivery to India, Greece and the United Arab Emirates. The Rafale production rate is very low today, at one aircraft every two months for France. It is scheduled to climb to two aircraft per month by the end of next year.
While acknowledging that it takes more workers to move one military aircraft down the production line than it does on the civil side, Grillet would not put a figure on the military/civil ratio.
But there are limits to this civil/ military compensation tactic. In Little Rock, Ark., the Falcon completion facility employs 1,500 people– all of them on the civil side. In addition, they are at the end of the process and the job they perform on an aircraft cannot be done without a customer in hand. Some margin can be found upstream in the production process. In some cases, the manufacturer can start building an aircraft before it is allocated to a customer. “No action has been taken so far in Little Rock in response to the reduced number of deliveries, but the downturn will probably have more painful effects there than in other Dassault factories,” a Dassault spokesman in France told AIN.
In the short term, how far can Dassault go in reducing production without cutting jobs, in France at least? “We can further reduce production below the current level of four aircraft per month, but we cannot cut it by 50 percent and still keep all our employees,” Grillet said. Union sources told AIN they were not aware of any immediate plan for job cuts, but admitted they were concerned about the ongoing depression in the business aviation market.
Dassault sees market uncertainties as a good reason for improving its ability to change production rates quickly. The path toward more flexibility is digital. Computer-aided design has allowed engineers to work on digital mockups, now extended to a “digital reference frame” for each newly designed aircraft. “The digital reference frame is used throughout the industrial process, from design to parts manufacturing,” Grillet explained. Design modifications are therefore much easier to track and record. And precision in parts manufacturing is also much higher than before.
“Thanks to the digital-based process, we can now drill small positioning holes during parts manufacturing,” Grillet explained. Today, most holes are still drilled at assembly because the exact size of the final part can vary and holes need to be carefully positioned relative to the two parts to be joined. This involves big tooling that needs qualified operators. Now, the existence of positioning holes makes such large tooling redundant.
Less qualified people can drill the definitive hole and assemble the parts, Grillet explained. “In this Meccano-like job, they just need a hangar and a few light tools,” he said. This in turn allows the use of subcontractors in countries where the workforce cost is low. Contracts with these subcontractors can be short-term agreements, allowing the airframer to bring work back in-house rapidly if production rates decrease. This is the reverse of current practices, under which the airframer makes a mid- or long-term commitment to a subcontractor.
During the production peak two years ago, a maximum of 5 percent of the workload was outsourced in this manner. AVIC II in Chengdu, China, among other companies, were tapped for subassembly work. The aforementioned percentage might increase in the future.
The majority of the airframe in the newer in-service Falcons, namely the 2000 series, has been designed digitally (the wing, however, is that of the older Falcon 50). And the new Falcon 7X is being designed entirely digitally. “To regulate the workload in house, Dassault plans to outsource anywhere from zero to 50 percent” of its production to low-labor-cost countries, Grillet told AIN. Dassault’s share of the airframe work on the 7X is close to 50 percent, the rest being divided among risk-sharing partners.
Will traditional subcontractors simply be dropped in the near future? “No,” Grillet answered, as the current models–the 50, 2000 and 900 series–will still be built for years to come. In addition, some of these long-time subcontractors have become risk-sharing partners.