LONG BEACH, CALIF. — Conflicting cost pressures on aircraft makers and material suppliers surfaced at the major panel discussion during SAMPE '99 in Long Beach.
Michael Molyneux, president of Cytec Fiberite Inc. in Tempe, Ariz., shared his frustration at Boeing Co.'s squeeze on suppliers.
``Will the aerospace industry ever allow the composite raw material supply industry to make an acceptable profit?''
Molyneux was referring to the whole supply chain from fiber through finished products delivered to the original equipment manufacturer.
``Intense pressure has been brought to bear on material suppliers to reduce price,'' he said. The pressure follows substantial consolidation within the polymer composites industry, a quantum shift emphasizing cost over technical performance and the steady growth of the European consortium Airbus Industrie as a commercial competitor to Boeing.
Change beyond traditional supplier-customer relationships ``has been much more embraced in Europe'' but not in the United States, Molyneux said. There is ``a double-edged sword to this business of helping the OEMs reduce their costs. We must find a way to extract maximum value from this business.''
Cytec Fiberite is a unit of Cytec Industries Inc. of West Paterson, N.J.
The next speaker, Boeing's director of engineering materials in Seattle, responded.
``Some of this was answered by the traveling public more than 10 years ago,'' said Michael Sinnett. ``The question then was, would the public pay a ticket price that allows the airlines an acceptable profit? And the answer there was clearly no, and regulation went away. Now, we are in an environment where the paying customer is setting the ticket prices, the airlines are setting the aircraft prices and we're in the driver's seat trying to set the component prices.''
Boeing faces a ``much more competitive environment ... than we have ever played in before,'' he said. ``Our [Airbus] friends in Europe have a very competitive product. We are being competed with right across the board.''
An aircraft is now a commodity.
``We no longer can figure out how much it costs to build an airplane, stick an 8 percent profit on it and turn around and sell it to an airline,'' he said. ``Those days are gone.''
Sinnett said Boeing's next-generation 737 aircraft can fly faster, higher and farther than its predecessor, ``and yet we were required to sell the aircraft for millions of dollars less than the airplane it replaced.''
Half of Boeing production occurs internally with the other half from 3,000 outside suppliers in 46 states and 37 countries around the world, Sinnett said.
``While Boeing is working internally to reduce our 50 percent share of the costs, we've got to consider the other 50 percent outside. We've got a program of continuous improvement. This is the same thing that the automotive business has gone through.''
Kicked off in July, Boeing's continuous cost- improvement program can work, acknowledged James Koshak, vice president for the Americas and Pacific Rim with Hexcel Corp.'s composite materials segment in Pleasanton, Calif.
``Boeing is trying to make the change,'' but its organizational bulk slows how messages ``filter down into practice,'' Koshak said.
Juergen Habermeier described an accretive aircraft-material cost chain starting with acrylonitrile and cumulatively costing $2 per pound at the polyacrylonitrile stage, $18 at carbon fiber, $22 at fabric, $45 at preimpregnation, $200 at lamination and $300 at assembly.
``You see this tremendous jump,'' he said. ``I used to call it a value chain. Now I call it a cost chain.''
The industry must standardize matrices and find the right combination of processes, said Habermeier, chairman and chief executive officer of Mayflower Development Group in New York and a former Hexcel executive.
Noting the consolidation of material companies, Habermeier suggests the same thing must happen in the components industry to bring costs down.
A long-time Airbus supplier of aircraft cabin interiors sought help in identifying new prepregs with integrated decor for panel manufacturing, new thermoplastic materials for alternative ways to make ducts and more automated processing techniques.
``We don't need material suppliers,'' said Joachim Hildemann, director of marketing and sales with Aircabin GmbH in Laupheim, Germany. ``We need partners as the OEMs need component manufacturers.''
Deep-water applications for off-shore oil derricks hold major promise, said Malcolm Katsumoto, chairman of Toray Composites (America) Inc. in Frederickson, Wash.
``These things cost in the order of $1 billion per derrick and can consume in the order of 10 million to 15 million pounds of composite materials. This represents 40 percent to 60 percent of the [existing composites] industry capacity for one derrick.''
Katsumoto showed an illustration of a composite roof truss at an Ehime, Japan, cafeteria of parent firm Toray Industries Inc.
The lightweight roof was assembled on the ground and lifted into place with a crane, but it cost much more than steel initially.
``One of the things we have to convince the industry to accept is what we call the life-cycle cost,'' Katsumoto said. Steel and composites ``reach parity at around nine or 10 years'' when maintenance costs are included. ``If [the construction] industry would accept that, we would have a chance in terms of a composite building.''
Richard Cromer, president of BGF Industries Inc. in Greensboro, N.C., noted the mention of lengthy cycle times.
``We really are trying to talk hours,'' he said. Cycle times ``from surprise to delivery'' took 12 weeks when he joined BGF last year. ``We are down to six and expect to be at four shortly.''
The Covina, Calif.-based Society for the Advancement of Material and Process Engineering sponsored the May 23-27 symposium in Long Beach.