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Daewoo dumps Dornier 328 contract

Daewoo is to quit production of Fairchild Dornier 328 turboprop fuselage-panels within two months, and will have to pay compensation for its early pull-out from the programme.

According to Fairchild Dornier vice-president for programmes and aircraft development, Earl Robinson, Daewoo is bringing its contract with the US-German company to a premature end. Dornier originally contracted the South Korean manufacturer to deliver 400 shipsets, but the company has completed only about one-third of that number.

Fairchild Aerospace chairman Carl Albert says that the South Korean company was suffering rising costs at a time when the 328 manufacturer was pushing suppliers to reduce their prices. Daewoo says that it decided to pull out because the subassembly production was no longer profitable, and Fairchild Dornier refused to revise its fixed-price contract. Daewoo has decided, therefore, to free factory space for more Boeing work.

Talks are now under way on what form compensation should take, and Daewoo has proposed transferring its own tooling to wherever Fairchild Dornier wants to locate the 328 work.

Fairchild Dornier is to decide shortly whether the Daewoo work - involving 12 different fuselage sections - will be moved to its San Antonio, Texas, site, or subcontracted to Aermacchi in Italy. At one stage, Hindustan Aeronautics (HAL) was also in the running for the work. Robinson also says that plans announced in Bangalore in December to shift 328 wing manufacture to HAL have not come to fruition. The Indian manufacturer already makes Dornier 228-201s, and negotiations have taken place about switching German production to India.

Fairchild Dornier says that it has dropped plans for a stretched turboprop version of the 328 and for an improved, stand-up cabin version of its Metro 23.

According to company officials, the stretched 328 was being kept alive only to attempt to salvage a faltering relationship with Horizon Air - one of the 328's biggest early customers, which later decided to return its aircraft.

Horizon still operates eight 328s, and is returning one aircraft a month to the manufacturer. Fairchild Dornier says that the returned aircraft are rapidly being passed on to other customers, and that the damage from Horizon's volte face is minimal.

Fairchild Dornier is to begin converting its second 328 prototype into the first turbofan-powered 328Jet prototype within a month. The first Pratt & Whitney Canada PW306/9 engines are to be delivered in October, and the aircraft flown in January 1998.

Fairchild Dornier will then build three more prototypes during 1998, and expects to certificate the aircraft in early 1999. According to Robinson, the company plans an avionics upgrade and possible rewinging with a new swept wing in 2002.

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