India Aloft: Airbus' Smartest [Recent] Move Yet …
It does not take much to improve on Airbus' recent strategic and operational blunders. Certainly, for Airbus, investing in the Indian market to develop local suppliers and to build engineering centers is a huge step in the right direction. According to news sources in India, Airbus will make investments in the region including "$250 million in an engineering center" in Bangalore. But the European air giant is not alone in the A&D world in turning to India both for talent and as an investment to build marketshare by localizing its supply chains within the region. Indeed, the growth potential for regional air passenger and cargo -- and hence, aircraft purchases -- within India is huge.
Heck, given India's huge infrastructure challenges, it's not impossible to imagine a scenario where internal air freight within the country becomes a financially viable alternative to ground transportation. I'd reckon that you might save in bribes, sitting in toll queues and replacing broken rims and flat tires what you'd pay in the added cost of fuel to move cargo across through the skies!
- Jason Busch
Heck, given India's huge infrastructure challenges, it's not impossible to imagine a scenario where internal air freight within the country becomes a financially viable alternative to ground transportation. I'd reckon that you might save in bribes, sitting in toll queues and replacing broken rims and flat tires what you'd pay in the added cost of fuel to move cargo across through the skies!
- Jason Busch
This latest news of developing new suppliers in India is interesting (although not inconsistent) in light of Airbus' announcement last month that it would axe more than 80% of its supply base.
In a profile I did on the subject over at www.Supply Excellence.com, Matthias Gramolla, VP of Sourcing Strategy for Airbus parent EADS, said the company's intent was to "focus more on a limited number of systems and equipment suppliers." Airbus will look to its Tier One suppliers -- possibly those you mention in Inida -- to "manage overall all systems and the sub-tier suppliers that support them."
Gramolla also suggested that suppliers in Asia would have a better chance of keeping or expanding their Airbus business. (I guess this edge extends to lower-cost but quality talent in India as well.)
I won't get into Airbus' complete supplier rationalization criteria and strategy. Those interested, can read my original post at: http://supplyexcellence.com/blog/2006/11/14/the-in...
Bottom line: this appears to be just the nose of the jumbo airliner when it comes to Airbus' supply and design center announcements.