A220 PRODUCTION COSTS
The three images above show the Airbus A320 assembly line at Mobile AL and how these major assemblies are moved and joined. The assemblies arrive by ship and are moved by truck to the former US Air Force Base, Brookley Field, which is 4 miles from the harbor.
Airbus has been very open and public about their criticism that the production costs for the A220 are far too high to permit the survival of the program. Airbus wants at least a 10% cost savings in these productions costs. Openly stated, the Airbus plan is to achieve this cost reduction by means of its superior negotiating capabilities with the suppliers. This remains to be seen. Airbus does not clearly say that they will squeeze cost savings out of Bombardier, be that Belfast, Quebec or Montreal, but that might have to be the case for such a reduction to be achieved.
A key strategy in the Airbus acquisition of Bombardier and its CSeries aircraft was that Airbus will relocate the major fraction of A220 assembly to Mobile AL, where Airbus already assembles the A321. When Airbus opened its production line at Mobile, the company publically stated that the move was not intended to save production costs, rather the company said that the intention was not to increase costs due to the more costly logistics path. The trade-off was to be found in reduced labor costs with non-union labor in Alabama. The transportation costs would thus be offset by labor savings.
Similar to the highly distributed fabrication locations that exist for the A220, major assemblies for the A320 series are fabricated at many locations as well. The A320‘s wings are made in Broughton Wales. (Similar to the case with the Northern Ireland fabrication plant for the A220, this will bring Brexit complications.) The A320 front fuselage is made in Saint-Nazaire France, and the aft fuselage in Hamburg Germany. The vertical stabilizer is made in Getafe Spain. Airbus currently operates a total of eight final assembly lines: five in France, and one each in Germany, China, and the US.
If the construction of the A220 wing has to be removed entirely from Belfast and started anew somewhere in the EU, that will add at least temporary new costs. If the Chinese production of the A220 center fuselage has to be moved elsewhere for whatever reason, that will also be costly. Thus, it is hard to see where a 10% production cost will be found. What’s left are the engines (Pratt & Whitney), the avionics (Rockwell Collins), to a lesser extent, Parker Hannifin, and Liebherr Aerospace. That doesn’t seem promising.
11/5/2022 03:15:19 am
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