Industry Perspective: Bombardier
How would you describe the current health of the market?
Looking from the past to what it is today, we seem to be in a dynamic that is historical in the sense that every time we look at our forecast and that window when the market could show some signs of slowing down, that’s being pushed off. So we’re still entertaining what could be called a fantastic market in emerging countries as well as our home North American market. The question is, are we seeing a new dynamic with regard to cycles? I think with the emerging markets, it might be so.
Which markets outside North America are the strongest?
Eastern Europe is strong for Bombardier. We’ve been establishing a big base in Russia with our Global line and Learjets. Our installed base there is growing, and we’re building in the rest of the European countries, which are evolving with the need to fly for business.
How about sales into the Asia Pacific region, specifically into China?
The rim of China has been growing, but inside China we’re still like many
others, basically a quiet player. We have a small installed base there. Everything that we’re looking at doing in China involves long-term strategic positioning for Bombardier. The way to go into a country like China is to look at manufacturing components. Ultimately that is a low-cost-country approach for our
cost-containment strategy as well as for being a player in the Chinese market, but this is all a part of our long-term strategy. There’s a need for improved infrastructure in China, but they have to get their act together. We’re certainly into those strategic discussions. As you know with AVIC I on the regional side, which we announced in Paris, we have forged a close manufacturing relationship, and on the business aircraft side we’re looking at doing similar things, but it’s much too soon to talk about it right now.
How about the completion cycle for new airplanes? Have you managed to streamline the process, and is it where you would like to be as far as the speed of getting airplanes from the factory and into service?
We’ve made a lot of progress in that area. Are we at the level that we would like to be? No. But we’ve begun a lot of lean initiatives all aimed toward different aspects
of production. One that is noticeable is the completion cycle on the Challenger 605. We’re just getting the first few aircraft off the line, which is a line that moves through five stations for completion of the interior of the aircraft.
We’ve seen our cycle cut by 40 to 50 percent. This is creating a much shorter cycle, improving our cost and, in the end, making our customers much more satisfied. That’s just one example, and we’re certainly looking at exporting the Toyota-style lean approach to other production lines.
We need to start first by involving our employees. They know a lot better than
we do sometimes what needs to be done to produce more efficiently. We’ve built a program that we call “Achieving Excellence,” consisting of teams that work toward common objectives, which is applied to every step of building the airplane. We’ve been doing this for a couple of years now and we’re starting to see the benefits. The 605 is just a showcase, but in many aspects we’re going to apply this to every step of the production process by the end of this fiscal year. This is only a base for us to improve on as we get people thinking about lean manufacturing.
Apart from the upgrades you made with the Challenger 605 and Global line, do you have any clean-sheet designs you’re working on?
On the Challenger and Global sides we are looking into improving the great platforms that we already have. Just last year we launched our new interior on the Challenger 300, the Global improvements we announced here at the convention and for Learjet we just had the 60XR’s entry into service. For us, looking at everything we can do to improve our models is something we’ll consider, and we’ll also always have one clean-sheet project on our drawing board, but it’s too soon to talk about it. We are working to prioritize what the next project will be.
What market segments might your next clean-sheet airplane address?
It would be to the lower segment of the market. Whether it would be branded as a Learjet or a Challenger, it is too soon to talk about that. But I must clarify that it would not involve an entry into the VLJ market, which is something we’ve put aside until we see what’s going to happen in that market.
How about your research into fly-by-wire flight controls? What are you goals with that initiative?
The internal R&D group is certainly focusing on that technology, working
on making that ready. The readiness of fly by wire has never been as high as
it today within Bombardier. We’re looking at applying this technology in our
next generation of improvements, but today the focus is to make sure it is ready. We have an internal group just focusing on that initiative and some
others as well.