Sector focus: Advanced manufacturing
Commercial planemaking stalls as Covid grounds growth
The impact of Covid-19 on Lancashire’s commercial aerospace sector has been deep and damaging with industry experts warning the job losses seen across the county may not yet be at an end.
With the virus grounding much of the world, new aircraft orders have been massively curtailed with some airlines cancelling or looking to defer programmes.
Airbus has reduced its production rates significantly. Production of its single aisle A320 has been cut from 63 aircraft a month to 40. Widebody aircraft production has almost halved.
Boeing has similarly reduced its production rates, while it also faced the total grounding of its latest version of its 737 Max in the wake two fatal crashes.
Aerospace employs around 17,000 people in Lancashire. The impact has been felt deep down the supply chain, with Rolls-Royce and Safran Nacelles among business announcing job losses in the county.
Sharon McDonald, chief executive of the North West Aerospace Alliance (NWAA), says: “Over the last seven months we have seen a range of responses by the Lancashire aerospace supply chain.
“Initially companies were working through their order backlog. Orders are now at lower levels, with 30-50 per cent reductions, and shorter periods.
“Some companies have introduced redundancy programmes, while others have focused on using the furlough scheme.
“Some have tried to boost work from other markets already served, others have sought to use their capabilities in other manufacturing served sectors.”
It will be key to engage customers to bring innovation and add value
She adds: “Continued uncertainty in the commercial sector means that more job losses are possible.
“Recruitment in the defence sector has offset some job losses arising from the downturn in the commercial sector.
“Impacted businesses are principally still relying on a mix of short-term work, the furlough scheme and exploring business in other sectors where applicable.”
Looking ahead, Sharon says much depends on the return to air travel. In that respect the rollout of the Covid-19 vaccine will play a part.
There are fears the end of the Brexit transition period is also likely to lead to further uncertainties for the aerospace sector, impacting cost and competitiveness.
There is a reported multi-year backlog of 13,444 aircraft orders from airlines and Sharon says: “This continues to demonstrate and underpin the scale of the industry value to the UK economy.”
Airbus has also recently advised its supply chain to prepare for an increase in the production rate of the A320 to 47 aircraft per month later in 2021.
Sharon says help is still vital, including continued furlough support and a focus on enhancing skills and developing new ones. There is also the need for “innovation support” for SMEs.
She adds: “The active sustainment and development of capability, capacity and competitiveness in an over-supplied, recovering market is going to be critical.
“It will be key to engage customers to bring innovation and add value, whilst strengthening competitiveness and resilience.”
The NWAA has been playing its part in the national Aerospace Growth Partnership and the work of the Lancashire Aerospace Task Force.
The task force has identified short, medium-and longer-term interventions for the sector, which is so crucial to the county’s economic wellbeing.
These have been based on three different scenarios the sector may face, which in in turn depend on the duration of travel restrictions and quarantine rules.
Continued uncertainty in the commercial sector means that more job losses are possible
Measures it recommends range from retraining and upskilling individuals ready for a more immediate rebound, through to encouraging governments to bring forward defence spending in the case of a more prolonged recovery.
The Lancashire Enterprise Partnership (LEP) has now put together a detailed plan aimed at delivering both stability and recovery.
Steve Fogg, who chairs the LEP, says the plan is going to government through the county’s MPs and is also being sent to the cross-party parliamentary aerospace group.
The next step is to set up a working group to mobilise actions within the document and to “start to drive the whole thing forward”.
The LEP has around £1.5m in place to fund initiatives but will be reaching out to central government for more support.
While securing the future sustainability of the sector is central to the recovery mission, the ambition is also to grow an “alternative economy” in Lancashire that is as large as aerospace.
Steve says: “Wouldn’t that be fantastic? That is the sort of thing we want to talk to government about.”
As part of that he wants to see investment in skills to support diversity into areas such as the new green economy and the digital sector.
Typhoon storms it
The spotlight may be on Team Tempest and what the UK’s future combat air programme will deliver in terms of jobs and opportunities for Lancashire’s military aerospace sector.
However, two recent contract announcements have underlined just how important the production of its predecessor remains to the county and defence giant BAE Systems.
The construction of the first Eurofighter Typhoon prototypes began in 1989 and some three decades later the multi-role combat aircraft continues to be backbone of the partner nations’ air forces. It has also generated major export orders throughout that time.
The Typhoon continues to deliver valuable orders and work for BAE Systems at its Lancashire operations, the latest providing a major boost for the county’s aerospace sector as it reels from the impact of Covid-19 on the commercial aviation side.
In November, BAE Systems was awarded a £1.3bn order to support the production of 38 Eurofighter Typhoon aircraft for the German Air Force. They will have a service life that will stretch beyond 2060.
It followed an announcement two months earlier that BAE Systems and Leonardo had been given a £317m contract to develop next generation radar for the RAF’s Typhoon. That work will sustain the jobs of 120 engineers in Lancashire.
Richard Hamilton, programme director Europe for BAE Systems, describes the German order as “highly significant” and says it will support high-value jobs in the county.
It will also maintain the continuity of Typhoon production in Lancashire through to the mid-2020s. BAE Systems has operations at Warton and Samlesbury and 3,000 workers at the two plants work on the programme.
Richard says: “It is a huge boost to the economy. It is not only the fact that for the next five years we’ve got manufacturing work, these aircraft will operate for the next 40 years and we will continue to provide the service support.”
The aircraft is in operational service with seven nations – Germany, Italy, Spain, the UK, Austria, Oman and Saudi Arabia – with production underway for Kuwait and Qatar. New export opportunities are also being sought.
There is plenty of life in the Typhoon yet as it will also continue to play a major role in the RAF’s operations for at least the next 20 years.
Lancashire will deliver more than a third of the components for each of the new Typhoons including the aircraft’s front fuselage and tail. Final assembly will be undertaken by Airbus in Manching, Germany.
The aircraft will be equipped with the latest technology, including an advanced electronically-scanning radar.
Richard says that as well as ensuring skills remain in Lancashire, the Typhoon programme is also helping to drive innovation as the company develops the technology needed to deliver the next generation of combat air capabilities.
In one example, its engineers are now producing 3D printed components for Typhoon, including an ‘Environmental Cooling System’ which will be used on next generation radar.
Richard adds: “We are starting to demonstrate some of the new manufacturing technologies that we would aim to implement on Tempest and we are beginning to bring them into the way we are manufacturing Typhoon today.”
As well as sustaining hundreds of jobs, the development of next generation radar for the Typhoon will also benefit Tempest and the UK’s future combat air system.
The “game-changer” will equip RAF pilots with the ability to locate, identify and suppress enemy air defences using high-powered jamming.
They will be able to engage targets while beyond the reach of threats - even when they’re looking in another direction - and operate inside the range of opposing air defences, remaining fully protected throughout.
It will also enable the Typhoons to link up with future data-driven weapons to combat rapidly evolving air defences.
Andrea Thompson, BAE Systems’ air sector managing director, Europe and International, also highlights the fact the work will sustain “the key skills needed to keep the UK at the forefront of the global combat air sector.”
The announcement of the Typhoon contracts during the pandemic underlines the differing fortunes of the civil and defence air sectors as a result of Covid-19 and its impact on the global economy.
Sharon McDonald, chief executive of the North West Aerospace Alliance (NWAA), says that while civil aerospace has struggled badly with Covid-19 it has been a different story for military work.
She adds: “The demand in the defence sector has continued and, in some cases, increased.”
However, there has been some impact from the pandemic. Sharon says: “The defence supply chain has been exposed to some disruption in the international supply chain from suppliers who have been impacted by the financial effects from the commercial sector downturn and, in some cases, shutdowns due to Covid-related fatalities.”
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