Airbus A350 Faces Supply Chain Challenge
According to Newswire's interview with Fabrice Bregier, the European company Airbus faces difficulties as it moves from the development phase into the industrial phase in their new wide-bodied Airbus A350 project. The Airbus A350 is meant to answer some of the limitations of the A330 by offering more space for passengers as well as elite luxury parts including a Rolls-Royce engine. The plane is slated to premier into the airline industry in 2014, however recent lulls in the supply chain process have executives worried over the production of the highly anticipated planes.
While the larger composite parts that make up the planes have not created many issues, (big suppliers have seen no problems in fulfilling orders,) the need for smaller, more complex components have created verifiable hiccups in the plane’s production. Specifically, second-tier suppliers are forced to manufacture much more complex parts then they are used to making, and the fast-paced demands of Airbus’s production process have some of them unable to perform under the pressure.
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The Airbus A350 has already seen significant stalling in their projected release of the plane. To date they have already set back the plane’ s arrival on the market by six months, as to avoid any major letdowns to buyers of the new Airbus, which could cost them major money in reparations. Buyers can rest assured Airbus has learned its lesson in ensuring they deliver a fully complete, fully tested product before debuting it on the market. Their error-filled initial release of the A380 racked up great expenses. In addition, their competitor Boeing Co. ran into unnecessary costs in its haphazard launch of the 787 Dreamliner program.
The company has taken additional measures in ensuring a quality product for its much revered customers. They are supplying a team of engineers and technicians to provide the second-tier suppliers with technical advice to ensure an optimal outcome in overall production.
Ultimately industry demand for the planes are high, and the company’s proactive approach to speeding up the small component manufacturing should guarantee a safe, and profitable take-off.
EU and US agree end to Airbus-Boeing supply chain tariffs
The EU and US have agreed to resolve a 17-year dispute over aircraft subsidies, suspending tariffs on billions of dollars' worth of goods that have plagued procurement leaders on both sides of the Atlantic.
Under an agreement reached by European Commission Executive Vice-President Valdis Dombrovskis and US Trade Representative Katherine Tai on Tuesday, the tariffs will be halted for a period of at least five years.
It will bring an end to punitive and disruptive levies on supply chains that have little to do with the argument, which became embroiled in the trade battle. Businesses on both sides of the dispute have been hit with more than $3.3bn in duties since they were first imposed by the US in October 2019, according the EC.
The US imposed charges on goods upto $7.5bn in response to a World Trade Organisation ruling that judged the EU’s support of Airbus, its biggest aircraft manufacturer, unlawful. A year later in November 2020, the EU hit back. The WTO found the US had violated trade rules in its favourable treatment of Boeing, and was hit with EU duties worth $4bn.
In all the tariffs affected $11.5bn worth of goods, including French cheese, Scotch whisky, aircraft and machinery in Europe, and sugarcane products, handbags and tobacco in America. Procurement leaders on both sides of the fence were forced to wrestle with tariffs of 15% on aircraft and components, and 25% on non-aircraft related products.
Boeing-Airbus dispute by the numbers
- The dispute began in 2004
- Tariffs suspended for 5 years
- $11.5bn worth of goods affected by tariffs
- $3.3bn in duties paid by businesses to date
- 15% levy on aircraft and 25% on non-aircraft goods suspended
Both sides welcome end to tariffs
European Commission President Ursula von der Leyen branded the truce a “major step” in ending what is the longest running dispute in WTO history. It began in 2004.
“I am happy to see that after intensive work between the European Commission and the US administration, our transatlantic partnership is on its way to reaching cruising speed. This shows the new spirit of cooperation between the EU and the US and that we can solve the other issues to our mutual benefit,” she added.
Both aircraft manufacturers have welcomed the news. Airbus said in a statement that it will hopefully bring to an end the “lose-lose tariffs” that are affecting industries already facing “many challenges”. Boeing added that it will “fully support the U.S. Government’s efforts to ensure that the principles in this understanding are respected”.
The US aerospace firm added: "The understanding reached today commits the EU to addressing launch aid, and leaves in place the necessary rules to ensure that the EU and United States live up to that commitment, without requiring further WTO action."
This week’s decision expands upon a short-term tariff truce announced in March this year. The EC says it will work closely with the US to try and further resolve the dispute, establishing a Working Group on Large Civil Aircraft led by each side’s trade minister.
Airbus last month signalled to suppliers that post-pandemic recovery was on the horizon, telling them to scale up to meet a return to pre-COVID manufacturing levels. “The aviation sector is beginning to recover from the COVID-19 crisis,” said Airbus chief executive Guillaume Faury, adding that suppliers should prepare for a period of intensive production “when market conditions call for it.”