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Aviation History
1994
1994 - 0029.PDF
has brought. One of the decisions which had been postponed, seemingly indefi nitely, was over new investment. With the sale to Bombardier in 1989 came a four- year, £200 million, programme, which has seen a wholesale re-equipment in Belfast. The machine shops have been trans formed. Lead times have come down from nearly 16 weeks to ten days and inven tories have been slashed. The investment has allowed Shorts to bring back in-house the high-value-added work which once had to be farmed out to an army of 130 subcontractors. Shorts now works closely with only around ten key suppliers, in which it takes an active interest. A similar transformation has taken place throughout the aerostructures as sembly operations, with the arrival of new equipment such as automatic riveters. Thousands of man-hours, for example, have been shaved off Fokker 100 wing assembly. Shorts has also built up expertise in key process technologies, such as metal- bonding, chemical-milling and compos ites, where it believes it has an edge. The underlying strategy has been to become a best-cost producer in each of its core businesses. McNulty argues that, with civil aircraft production rates now down by around 40% and overcapacity of 30%, all suppliers must cut costs by around 25% to survive. Shorts, he be lieves, is better placed than most to achieve the reductions. The strategy has meant shifts in the shape of the business. Defence revenues, which once accounted for half of sales, have remained steady, while aircraft pro duction has declined to make way for the growing aerostructures business. McNulty understands the lingering dis appointment in Belfast at the loss of regional-turboprop production, but re mains unrepentant. "The turboprop mar ket was not going to make money for us and frankly has not made money for anyone else," he says. He points to the volume of high- technology work now being carried out in what are still called the "assembly" han gars, including the fuselage for the Cana- dair Regional Jet. That has now been joined by fuselage work on the Learjet 45 programme, on which Shorts is an equal risk-sharing partner, together with de Havilland and Learjet itself within Bombardier. The design and technology effort which Shorts is putting into the project is one of the largest for decades and takes the company's ability to build an aircraft far ahead of anything achieved on the old turboprops, says McNulty. He adds that it is not impossible that Shorts could one day return to civil-aircraft production within the Bombardier group. FLIGHT INTERNATIONAL 5-11 January, 1994 SHORTS BROTHERS When it launched the Global Express long-range business jet in December, Bombardier confirmed that Shorts will supply the nose and composite tail section. CRITICAL MASS The nacelles business is another area targeted for strong growth. The teaming with Hurel-Dubois within the Interna tional Nacelle Systems (INS) venture has helped increase scale. It also allowed INS to offer the total service, from design through to product support, which is increasingly being demanded. Together, the French and UK compa nies can count a 13% world share of the independent turbofan-nacelles market. It sits somewhere alongside Martin Marietta, but behind market-leader Rohr's 30%. Shorts admits that its final aim is to emerge as a clear second player in the $1.5 billion world market and acquisi tions are not ruled out. INS' success in winning the Embraer EMB-145 nacelle contract was a start, but McNulty says that the growth has only just begun. Shorts also recognised that it needed to team on missiles, given the drive towards consolidation in Europe and the necessity to export outside the UK. The joint venture with Thomson-CSF was finally signed early in 1993, creating a £150 million business which expects to win its first orders this year. The Belfast company recognises that it has to prove to Bombardier that invest ment in the missiles business, including an impressive new building, was worth while. The interest being shown in the USA in the Shorts Starburst and, possibly, Starstreak missile systems should help increase confidence. The rewards for all this activity over the past five years are abundantly clear in the coijipany's financial accounts. Profits have been edging up, helped by the UK Gov ernment's agreement to underwrite loss- making defence contracts as part of the privatisation deal. Shorts is on course to make a profit even discounting this state contribution. Sales have virtually doubled from their sluggish £200 million and the company has even bucked the world trend by increasing staff numbers to about 8,000. Investment has risen dramatically from the pitiful £2-3 million a year before privatisation. McNulty now hopes to keep spending at at around £20 million as the Learjet 45 work progresses. "There has been a tremendous change in performance any way you measure it. Our financial results have improved out of all recognition," he says. With the post-privatisation re-building now behind it, the task has become to maintain the momentum built up during four years of rapid change. CI (Above) Aerostructures work has flowed from within Bombardier (Below) Shorts looks for world scale in nacelles 27
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