Airbus delivered a rather harsh message on 6 August to a Wichita aviation cluster that had been hoping for good news.
About 150 eager suppliers, who each spent $55 to attend an Airbus-hosted summit, could not be blamed for walking in feeling optimistic. They were, after all, being invited to discuss supplier opportunities by an airframer whose parent company has a stated goal of increasing its US economic footprint by 75% within eight years. Besides, Airbus is now a local company, having opened an engineering centre in downtown Wichita in 2002. But Airbus officials quickly doused the suppliers' expectations for making a quick sale directly to the world's largest commercial aircraft manufacturer.
Airbus opened an engineering centre in Wichita in 2002
There is something like an "Airbus Way" to supplier management, and it does not involve direct relationships with the kinds of small companies that form the bedrock of the Wichita aviation cluster. Airbus is happy to deal with Spirit AeroSystems, but such a Tier One supplier is as far down the supply chain as it usually prefers to go.
"Every company goes about things a different way," says John O'Leary, vice-president of engineering at Airbus Americas. "When we bring engineers in here they have to learn the Airbus way of doing the engineering and delivering the product. So can we go through that learning curve with companies? Yes, absolutely. Does it make sense with a Spirit AeroSystems? Yes, absolutely it does. Does it make sense with a mom-and-pop machining company? It's probably not worth it for that mom-and-pop machining company."
It is a philosophy that Airbus applies all over the world. Even so, the strategy may be harder to accept in an aviation cluster such as Wichita, where such "mom-and-pop" suppliers were dealing directly with major aircraft makers for 40 years before Airbus even existed.
Whether directly or indirectly, the Wichita cluster still figures large in Airbus's corporate plan to embed itself industrially in one of the largest markets for its products. At the same time, Airbus's decisions illustrate both Wichita's unique selling points and its industrial limitations for any company thinking about moving into the cluster or expanding.
A key limitation for Wichita is, very simply, its geography. Land-locked and 274km (170 miles) by truck from the nearest port - the inland port of Catoosa - Wichita was quickly ruled out of Airbus's search for an A320 final assembly plant, which ended in Mobile, Alabama.
"It was purely geography," O'Leary says. "Wichita wasn't even on the list because of geography."
Wichita's lack of access to the sea was also the reason cited by Spirit AeroSystems for opening a factory in Kinston, North Carolina, to make parts for the Airbus A350XWB. Kinston's proximity to the coastal port of Newburn is also convenient for the future A320 factory in Mobile.
"You can have components [delivered] into Mobile. Then, the same barge can go [to Europe] through Newburn," O'Leary says.
Left unspoken is the near absence of industrial unions in the US southeast. Aircraft manufacture in the Wichita cluster has a long history of labour conflict. A truce seemed to arise between management and unions in the wake of the post-2007 downturn in the general aviation market. But there are signs of increasing stress in labour relations, with the International Association Machinists and Aerospace Workers voting to strike earlier this month against Bombardier Learjet.
However, Airbus's presence in Wichita is owed to the cluster's most attractive resource: a highly skilled workforce, steeped like few others in the unique culture and tribal knowledge of the aviation industry.
"I would say, on the positive side, it takes a certain mindset and a certain capability to build an airplane," O'Leary says. "That knowledge, that capability, that culture exists in Wichita, Kansas, and in the supply chain that feeds whether it's Spirit or Cessna or Hawker Beech, that feed those OEMs.
The availability of that workforce, as a result of the post-2001 industry-wide downturn, is what brought Airbus to Wichita in 2002. O'Leary explains that the story actually begins in the mid-1990s, when Raytheon Corporate Jets moved the Hawker 1000 and 800XP from Arkansas to Wichita. The move brought several British engineers to Wichita, who then returned to the UK to support the Airbus A380 programme.
At the time, O'Leary was working for Raytheon, which is now Hawker Beechcraft.
"One of them called me some years after that and said: 'You know, we're going to establish an engineering centre in Old Town [Wichita]. Are you interested in joining us?'," O'Leary recalls. "I said: 'Yeah, sure.' And that's how I got started."
The original plan called for simply opening an office in Wichita to recruit engineers to work in the UK, but there were few takers. Instead, Airbus decided to move its engineering databases to the Wichita cluster and establish the site as a hub for all of its engineering activity in the USA.
A staff of 27 in 2002 has grown to 350, with the head-count doubling in the last four years. The engineers work on aerostructures for virtually all of the Airbus commercial aircraft in production, with roughly 85% of the activity concentrated on wings, O'Leary says.
Ten years after starting to grow in Wichita, Airbus is now approaching the maximum capacity it intends for the site.
"I hope so," says O'Leary, "because we've been growing like gangbusters. That begins to wear you out. We're at 350 [people]. If you walk around the building, you'd say, you probably have got room for 50 more. It's getting pretty tight."
Airbus still plans to hire more engineers in the USA, but probably not nearly as many from the Wichita cluster.
"We have to venture outside Wichita," he says. "We have to figure out how to use suppliers where those people are. Just in the sense that we didn't want to move to Europe, there's people in Greenville, South Carolina, or Dallas, Texas, that don't want to move."