America Helps build the 'Bus

By Sally B. Donnelly/Washington Sunday, July 21, 2002
    • Down a dead-end street in Canoga Park, Calif., just north of Los Angeles, sits the only factory — you could call it the Global Headquarters — of Faber Enterprises, where 110 workers make precision metal fittings for the hydraulic lines in airplanes. The sun-baked, white facility, nearly the size of a football field, is run so frugally that there is no receptionist, just a phone by the door. But according to the European airplane manufacturer Airbus, this is a world-class shop. Airbus has signed up Faber, which has made fittings for Boeing, to make them for its newest aircraft, the A380.

    Faber is not alone. Airbus, long regarded as a symbol of European independence from America's dominance of aerospace, has embarked on a $1 billion-a-year spending spree from California to Connecticut, signing contracts with dozens of parts suppliers. One reason is practical: the A380 will be the largest passenger airplane ever built, seating at least 555 on two decks, and its complex design requires Airbus to call on the most talented suppliers available, whether they're in Munich or Memphis. Another reason, though, is political: Airbus is spreading supply contracts to build a U.S. constituency for its aircraft and help avert any government restrictions that might favor Chicago-based Boeing over Airbus.

    Based in Toulouse, France, Airbus is jointly owned by two private aerospace companies, European Aeronautic Defense & Space Co. and BAE Systems, but is receiving subsidies from European governments in the form of $3 billion in loans that don't have to be repaid if the A380 fails to turn a profit. Boeing gets indirect handouts through its lucrative defense contracts, but critics say they aren't sufficient to level the playing field, and U.S. officials occasionally threaten to punish Airbus. The political equation may be changing, though. "U.S. companies are thrilled to be a part of the A380," says Mark Sullivan of engine maker Pratt & Whitney.

    U.S. suppliers have signed 20 contracts and are bidding on an additional 25 for the A380, which is scheduled to enter service in 2006. In a surprise announcement last January, Airbus selected Honeywell, based in Phoenix, Ariz., to provide the crucial electronic flight-management system (which helps with navigation) for the A380, rejecting its usual supplier, France's Thales. And three carriers, including Air France, have asked that their copies of the A380 be equipped with engines made jointly by General Electric and Pratt & Whitney, rather than Rolls-Royce.

    The A380's emergency power unit will be supplied by Hamilton Sundstrand, based in Windsor Locks, Conn. The 44-ft. emergency slides and the 18-ft.-high landing gear will be made by Goodrich, based in Charlotte, N.C. Triumph Group, based in Wayne, Pa., will produce the cargo-door actuation system. A division of Parker Aerospace based in Smithtown, N.Y., is providing fuel measurement and management systems.

    U.S. suppliers stand to benefit from new technology that will be built into the A380. Eaton Aerospace, based in Irvine, Calif., is leading an effort to give the Airbus jumbo jet more power in the hydraulic systems than any passenger plane has ever had. "What makes the A380 so exciting is that it is cutting-edge technology," says Steve Eisenberg, head of aerospace operations for Eaton. "The A380 tail is as large as the wing of an Airbus A320; it takes a heck of a lot of hydraulic power to move that."

    In the past three months, Airbus has added seven Japanese companies as suppliers, including Mitsubishi Heavy Industries, Fuji Heavy Industries and Japan Aircraft Manufacturing. Airbus has been pushing hard to raise its profile in Japan, where Boeing has long had manufacturing partnerships and where the airlines fly mostly Boeing aircraft.

    Airbus has been successful in the past few years selling its smaller airplanes to U.S. carriers such as JetBlue, Northwest and United. It has even signed a contract to sell FedEx 10 of the cargo versions of the A380, which list for $230 million a copy. And Airbus is determined to maintain that momentum. Last year the company hired a telegenic industry veteran to make its case: Allan McArtor, who has served as a fighter pilot in Vietnam, an airline CEO and the head of the Federal Aviation Administration. McArtor briefs lawmakers and airline execs about the 120,000 employees in 42 states who work on Airbus contracts. "There used to be only one voice talking about Airbus, and that was Boeing," says McArtor. "So now we're trying to eliminate the myths." And he's having some success. Says an aide to a Democratic Senator: "If the A380 means American jobs, then we won't be squealing as much about European subsidies."

    McArtor's latest score was opening Airbus' first U.S. engineering facility last month, in Wichita, Kans., where 60 engineers are working on the wing design of the A380.

    As for Faber, its deal to make fittings for the A380 is worth $3 million a year. "If you would have told me 10 years ago that I'd be making parts for a European company building the world's largest plane, I'd have thought you were crazy," says Ron Spencer, Faber's president. "But now planes are international products."