Ja­pan’s Mit­subishi sets sights on niche in air­craft sec­tor

The China Post - - WORLD BUSINESS - BY ELAINE KURTENBACH

At a tightly guarded fac­tory in cen­tral Ja­pan, Mit­subishi, a maker of the Zero fighter planes of World War II, is launch­ing its MRJ re­gional jet and aim­ing to ful­fill Ja­pan’s long-cher­ished am­bi­tions to re­gain sta­tus as a ma­jor avi­a­tion power.

The com­pany said Fri­day that a re­cent de­ci­sion to push back the jet’s maiden flight from this spring to a few months later would not de­lay its com­mer­cial de­liv­er­ies. Work­ers were con­duct­ing hy­draulic and other tests on two of the test jets in a cav­ernous as­sem­bly fa­cil­ity; an­other jet had been sent out for paint­ing.

Nobuo Kishi, a vice pres­i­dent of Mit­subishi Air­craft Corp., said the lat­est de­lay could speed things along be­cause it is in­tended to al­low for mod­i­fi­ca­tions that oth­er­wise would be needed later.

“We don’t see the change in the test flight as a de­lay, but as an im­prove­ment,” Kishi told vis­it­ing re­porters. “We want to con­tinue the test flights with­out in­ter­rupt­ing them for mod­i­fi­ca­tions.”

Still, com­pany ex­ec­u­tives are em­phatic about their de­ter­mi­na­tion and ur­gency to get the job done.

“This is the last chance to get into real air­craft man­u­fac­tur­ing. Mit­subishi Heavy In­dus­tries has a long-term vi­sion to get into the air­craft as­sem­bly in­dus­try,” Hideyuki Kamiya, head of mar­ket­ing for Mit­subishi Air­craft Corp. said in an ear­lier brief­ing.

“We think we have a lot of po­ten­tial to give this in­dus­try. This is very high tech work re­quir­ing skilled work­ers and en­gi­neers. We can com­pete in this area,” he said.

The quest re­flects a yearn­ing to trans­late Ja­pan’s en­gi­neer­ing and man­u­fac­tur­ing prow­ess into a first­tier air­craft in­dus­try with global reach, an am­bi­tion sub­sumed for decades af­ter Ja­pan’s 1945 de­feat.

The plan dove­tails with a na­tional blue­print for turn­ing the area near Nagoya into an aerospace hub on par with Boe­ing’s man­u­fac­tur­ing base near Seat­tle, Wash­ing­ton.

It also fits Prime Min­is­ter Shinzo Abe’s vi­sion for restor­ing the coun­try’s man­u­fac­tur­ing tra­di­tion of “monozukuri,” or “mak­ing things,” that roughly trans­lates into the craft of mak­ing ex­cel­lent prod­ucts through con­tin­u­ous im­prove­ment.

De­vel­oped partly with gov­ern­ment sup­port, the 70- to 90-seat jet project also par­lays pre­vi­ous work by Mit­subishi on the Boe­ing 787 Dream­liner.

But years of de­lays are adding to the chal­lenge of com­pet­ing with Brazil’s Em­braer, which dom­i­nates the dif­fi­cult re­gional jet mar­ket, mak­ing the project a risky one.

“It’s eas­ier to put a man on the moon than to build an air­liner that air­lines want to buy,” said Greg Wal­dron, Asian man­ag­ing edi­tor at Flight­global in Sin­ga­pore. “It’s an ex­tremely high risk, ex­tremely costly en­deavor. There’s go­ing to be de­lays. There’s go­ing to be prob­lems and you have to de­velop some­thing that peo­ple want to buy.”

Mit­subishi ex­ec­u­tives stress that their prod­uct is 20 per­cent more fuel ef­fi­cient than other lead­ing sin­gle-aisle jets, be­cause it was en­gi­neered specif­i­cally to work with a Pratt and Whit­ney high-by­pass geared tur­bo­fan en­gine.

Such en­gines are more ef­fi­cient be­cause they re­quire less jet thrust to pro­pel them through the air. It will be qui­eter and slightly roomier than com­peti­tors’ air­craft, they say.

The Mit­subishi re­gional jet is the suc­ces­sor to a failed at­tempt in the 1960s to break into the in­ter­na­tional com­mer­cial mar­ket with the 64-seat tur­bo­prop YS-11. The aim this time is fi­nally to win Ja­pan a foothold in the lu­cra­tive com­mer­cial pas­sen­ger jet mar­ket.

Mit­subishi and Naka­jima Air­craft Co. — pre­de­ces­sor to Fuji Heavy In­dus­tries, the par­ent com­pany of Subaru — pro­duced nearly 11,000 Zero fighters. To­ward the war’s end, hun­dreds were used in kamikaze sui­cide at­tacks.

‘Real pres­tige comes from be­ing the sys­tems in­te­gra­tor’

Af­ter Ja­pan’s de­feat, the U.S. oc­cu­pa­tion ini­tially banned air­craft mak­ing. It was re­vived in the 1950s. The avi­a­tion in­dus­try is a key sup­plier of com­po­nents for pas­sen­ger jets, most sig­nif­i­cantly the Boe­ing 787 Dream­liner, but mainly makes mil­i­tary air­craft for Ja­pan’s own de­fense force.

While it holds lead­ing tech­nolo­gies in avion­ics, ma­te­ri­als and other key air­craft-re­lated know-how and prod­ucts, Ja­pan has yet to in­te­grate them into an en­tire com­mer­cial­ized pas­sen­ger air­craft.

“The real pres­tige in all this comes from be­ing the sys­tems in­te­gra­tor,” Wal­dron said. “You de­sign the air­craft and then you in­te­grate it, which is where the value re­ally comes in, and then can sell that abroad. It’s like a sym­bol of your coun­try’s prow­ess.”

Air­bus es­ti­mates de­mand for new pas­sen­ger and cargo air­craft in 2014-2033 at 31,350, worth nearly US$4.6 tril­lion. Mit­subishi says it hopes to win 20 per­cent of the global mar­ket for sin­gle-aisle pas­sen­ger jets.

The com­pany has 223 firm or­ders and 184 op­tions, close to the scale that might en­able it to begin re­coup­ing the 180 bil­lion yen (US$1.5 bil­lion) it has spent de­vel­op­ing the jet, based on the ex­pe­ri­ence of other projects. SkyWest Inc. has made firm or­ders for 100 and took 100 as op­tions, in a big boost for the project. But de­lays in testing mean the jet’s maiden flight has been pushed back to the Ju­lySeptem­ber quar­ter from the cur­rent quar­ter. Mit­subishi says it will stick to its sched­ule for de­liv­ery to lead­ing cus­tomer All Nip­pon Air­ways in the spring of 2017.

That may not al­low enough lead time to make a dent in the over­whelm­ing dom­i­nance of Em­braer, which re­ports 1,549 firm or­ders and 772 op­tions for its E-jet. Ear­lier, the project suf­fered de­lays due to dif­fi­cul­ties in get­ting de­liv­er­ies of the hun­dreds of thou­sands of air­craft parts, about 70 per­cent of which are sourced from over­seas.

Although the jet is “made in Ja­pan” that refers only to its fi­nal as- sem­bly. Apart from the wings and other struc­tural ma­te­ri­als that are made by Mit­subishi Heavy In­dus­tries, and the land­ing gear, which is made by Su­mit­omo Pre­ci­sion Prod­ucts, from the avion­ics in the cock­pit to the gal­leys in the back, the plane mostly is built from for­eign parts and equip­ment.

It’s not that Ja­panese com­pa­nies lack the ca­pac­ity: Mit­subishi and other ma­jor Ja­panese com­pa­nies make about 35 per­cent of the Boe­ing 787 “Dream­liner,” pro­vid­ing the ti­ta­nium al­loy used for the body of the air­craft, car­bon fiber com­pos­ite ma­te­rial for its outer sur­face, wings, en­gines, tires, kitchen, au­dio vis­ual sys­tem, bat­ter­ies and wiring. But the air­craft in­dus­try is among the most glob­al­ize. Ja­pan has in­vested heav­ily in nur­tur­ing Nagoya as an aerospace hub. Home also to Toy­ota Mo­tor Corp. and much of the auto parts sup­ply chain, the re­gion is a strong­hold de­spite the shift of much Ja­panese man­u­fac­tur­ing over­seas.

The re­gion pro­vides more than two-thirds of the out­put value for air­frame parts and has a GDP rank­ing 20th in the world, be­hind Switzer­land but ahead of Bel­gium.

AP

In this April 1 photo re­leased by Mit­subishi Air­craft Corp., a flight test air­craft of Mit­subishi’s new re­gional jet MRJ sits on the airstrip at Nagoya Air­port in Toy­oyama, cen­tral Ja­pan.

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