Gavin Brown, the executive director of the Michigan Aerospace Manufacturers Association (MAMA), expects strong production of both commercial and military aircraft continuing into 2017. As demand for long-range aircraft like the Boeing 777 increases, large OEMs will be eying ways to cut costs through production. For West Michigan manufacturers, that presents an opportunity for companies that can adapt to the latest technology and work cost-cutting measures into production, Brown said. However, uncertainty over the trade policies for the incoming presidential administration could cause pain for companies such as Boeing, which plans to sell more aircraft to countries including Iran and Russia. Brown spoke with MiBiz regarding the opportunities and challenges for aerospace suppliers going into 2017.
Where do you see the economy going in 2017 and how will that influence the aerospace industry?
You’re going to see further pressure on the large four-engine platforms. The 747 and the A380 will continue to struggle with orders and production. Where the large platforms will probably have some legs in 2017 will be with the cargo delivery. As far as commercial passenger traffic, it’s going to be hard for the 747 to really continue in its legacy form. That means that programs like the 777 and the A350 will become the replacement to those models and you will see those grow.
What impact does that have on Michigan suppliers?
The industry is really trying to focus on what platforms will actually make money. In that, it’s going to be the ability of suppliers to take costs out. We’re seeing more attention to MAMA and Michigan. Our moniker is taking the cost out of components, subsystems and assemblies. You’re going to see some of the large suppliers have their mainstay products ship to different vendors because of cost structures.
Where’s the opportunity for West Michigan manufacturers?
Their ability to understand the changing manufacturing processes and how to do it in a cost-saving way. Because West Michigan suppliers have supplied industries like automotive and office furniture that have asked them to wean out costs, their models are in place to do that. Now they’ll be asked to demonstrate their technology as well as their business models to step up and produce more than in the past.
How has Trump’s election affected sentiment in the aerospace industry?
Take the commercial order Boeing recently got from Iran. To ramp up the supply chain for that, they have to make sure that programs like that are going to go forward. The headwinds would be if (the administration) doesn’t agree to export commercial goods to Iran, including airplanes. There are some geopolitical issues at play. Boeing is shifting, as well as Airbus, to Russia and China. If there are political issues that create an animosity, it could affect the production and delivery.