Aircraft manufacturers in Italy, as elsewhere, are turning to their suppliers to help cut costs by taking responsibility for entire subsystems - in return for taking on more of the risk and expense of development.

Secondo Mona, for example, has signed a deal with Aermacchi to provide the entire fuel system for the M346 advanced trainer. This is a step up for the 100-year old company, which has previously supplied aerospace manufacturers with individual fuel system components from its plant in Somma Lombardo outside Milan Malpensa airport. "We have moved from being suppliers to being risk-sharing partners," says Sergio Bogni, Secondo Mona's product support manager.

He adds: "As larger companies downsize, they have fewer resources to manage the thousands of suppliers, so outsourcing entire parts of the subsystem is cheaper for them." In theory, it is more profitable for the suppliers, he says, "but in practice the development costs are huge and we need a full production run to recoup these costs", he adds. Furthermore, as in the case of the M346 tender, reworking to revised specifications is now the responsibility of the vendor, not the prime contractor: one example of the increased risk which suppliers must now take.

The M346 contract builds on a riskier first foray into the world of system development. Secondo Mona holds the contract to supply the fuel systems for the Indian regional turboprop, the Hindustan Aeronautics (HAL) Saras. In return for providing the first six shipsets at around one-fifth of the development cost, HAL will guarantee a share of the revenues from the 200 aircraft expected to be sold over 20 years. However, the programme has suffered numerous delays. Secondo Mona is protected to an extent, as under its contract with HAL it can claim a refund of development costs if serial production is cancelled.

The drive to export has affected Italian subcontractors ever since Secondo Mona was criticised in the UK press for being the first "foreign" supplier to British Aerospace's share of the Panavia Tornado in 1978. Today, around 75% of Secondo Mona's business is for export, and the focus is on cost and quality rather than country of origin for most projects, says Roberto Mona, president of Secondo Mona.

Source: Flight International