31 July 2012
High labour costs, poor supply links and terrible weather… why does Canada's Bombardier Aerospace build planes in Belfast? Site boss Michael Ryan reveals the outstanding innovation behind this apparent manufacturing anomaly. Max Gosney reports
Over three thousand miles from HQ lies a factory that is one of the most unusual examples of manufacturing's great migration east. Move over Beijing, beat it Bangalore and step forward Belfast – home to a site belonging to Canada's Bombardier Aerospace. "Given that we export 100% of what we do outside of Northern Ireland," says plant boss Michael Ryan of jet wings, nacelles and fuselages largely bound for the US and Asia, "and we import 95% of the materials we use to make our products, it's hard to argue why we should be here."
It's a enduring conversation Ryan has had with his Montreal-based paymasters. And at first glance his vantage point seems precarious. The site was previously the home of state-owned flying boat maker, Short Brothers, before being bought by Bombardier in 1989. The location does have its problems, attracting skilled staff, high labour costs, even higher energy prices and a shipping route that would send most lean practitioners into rehab. "There are no direct transport links from NI to the US," explains Ryan, vice president and general manager at the site. "What we build here we put on a ferry to Stranraer. We drive it from Stranraer to Liverpool and put it on another boat. A week later, I can see the boat out at the end of the loch passing up the Irish Sea."
You can almost hear the line going dead as the accountants in HQ tot up the extra inventory cost caused by this detour. Yet the opposite appears to be true. Bombardier Belfast has benefited from almost £2 billion of investment cash since 1989, including a £300m windfall in 2008 to support the production of advanced composite wings for the C-Series commercial aircraft. The site is a centre of excellence for design and manufacture, and produces fuselages for the Learjet and Challenger business jet. "We make sure our performance beats Montreal's expectations," Ryan says of the site's burgeoning portfolio. "Whether that's financial, health and safety, time to market or environmental... whatever the measure."
Efforts are focused by a Bombardier's global continuous improvement programme called 'Achieving Excellence System', geared around safety, quality, productivity and skills development. Touch labour costs have tumbled by 15% since 2007 and the man hours per set for a Learjet 45 by 33%. Results have been fuelled by a ruthless honesty with the site's 5,000 workers, explains Ryan. "Our unions know we can't compete on simple stuff with the Chinese or Brazilians. We just can't." The emphasis, instead, is on adding value, he reveals. "Not just working with their hands, but thinking whether there's a more efficient way of doing it."
Workers do this free from fear that diminishing workloads will damage their job security, adds Ryan. A pact with unions prevents concerns over turkey's voting for Christmas, he explains. "We have a social pact with our workforce. We've said there will never be compulsory redundancies here again unless the future of this site is in jeopardy." A downturn can be dealt with by reducing the site's temporary workforce, which makes up 5% of total manpower, adds Ryan. "The core workforce know they are protected – they can deliver ideas that take hours out of work and reduce cost knowing they're not working themselves out of a job."
It's symbolic of a site displaying the same inventive streak that once characterised the dribbles of George Best, the city's most famous son. "We cannot survive in NI with our inherent inefficiencies by making things... In today's world, anybody and everybody makes things... How we will remain competitive is by moving up the value side of the manufacturing process."
Ryan preaches a manufacturing holy trinity. Designing, making and servicing: separate identities yet part of the same greater being. One of the elements can become more prominent, but none can survive in isolation. So the West's fascination with manufacturing decline is a misnomer, according to the Bombardier chief. What we are really seeing is the advance of lesser known servicing and design functions. Bombardier's recent move to open aircraft servicing centres in Bangalore and Singapore reinforces the point.
Manufacturing, in contrast, has been moving the other way. Ryan is candid on the loss of much low-tech production to Asia, but it's a fallacy to believe it will disappear completely, he stresses. "If we want to design things and we want to support them in the aftermarket then we need to know how to make them. We will never get to the point where we're never making things. Because not making them means you will not have the knowledge to get to the next design."
For example, Q400 fuselage production will move from Belfast to China within two years, he reveals. But in its place comes manufacturing of wings for the C-Series. "Wings are more complex than a fuse," he explains. "The fuse just holds people but wings keep the fuselage in the air. The value added on wings is much higher. We're moving up the value chain."
Western aerospace giants have taken on the guise of armies in structured retreat. Instead of trying to defend everything, the focus is on reinforcing key strongholds. The tactic is proving a profitable one at Bombardier. Ryan says: "As we build the C-Series wing, that composite technology is migrating to the Learjet 85 wing. The composite parts of the Learjet 85 are now being built in Belfast which wasn't on the horizon five years ago. We expect to build the next composite wing in Belfast and the one after that."
Confidence is high. Bombardier is actively recruiting and building more private jets than ever, according to Ryan. The shopfloor hums with the sound of riveting as the fitters from Belfast make playthings for the millionaires of Mumbai. The biggest threat to those pneumatic rivet guns going quiet does not come from the rise of a copycat in some far flung land but a skills gap close to home.
"I feel manufacturing has failed in telling its story to the UK public," bemoans Ryan. "I don't think we've been successful in that and that's why we've failed to attract the best people." Ryan hopes to redress the balance as an industry champion for the government's Make it in Great Britain campaign. At a company level, Bombardier tackles skill shortages by teaming up with local schools to entice youngsters into engineering. A particular focus is made on making careers appeal to girls, adds Ryan. "We can't afford to sit here and say we need to be so good because we're in Northern Ireland but not engage 50% of the population."
Working smarter is also a key objective for Ryan's Bombardier team. A new advanced composites and engineering R&D centre has launched on site in partnership with the government, local universities and fellow employers. The project aims to share technological advances among NI manufacturers and has certainly won plaudits in Montreal, according to Ryan. "They look at what we're doing and they've gone back to Canada and said how come we can't do this?"
It can't be the first time Belfast has left the Canadians scratching their heads in marvel. With Ryan and his team delivering that trademark flair to manufacturing in all its guises, it's unlikely to be the last.
Don't mention the Germans
From moving a factory to Belfast to escape Luftwaffe bombs to seeing a sister site controversially lose out on a train building deal to Siemens last year, the Germans have been something of a nemesis in the story of Bombardier Belfast.
"I was really hacked off from a UK point of view," says Michael Ryan of the government's decision to award a £1.4 billion contract to the German owned firm over his train building colleagues at Bombardier Derby. "I thought from an industrial point of view it was a real mistake." It's a move that has seen 1,200 jobs lost at Bombardier Transportation in Derby, although Siemens has vowed new posts in its UK supply chain.
"I'm absolutely convinced no other government would make the same decision," adds Ryan. "We're trying to play the best game of cricket within the rules but the others aren't playing cricket – they're playing rugby." Clashes with Germany are nothing new. Previous site owner Short Brothers moved from Kent to Belfast in 1936 because the location was believed out of the range of German bombers.
The surveyors got their maths wrong and the site was raided during World War II. Short Brothers took compensation after the conflict by stripping out machinery from German factories and importing it to Belfast as part of war reparations. Bavaria had the last laugh, though, as the lathes were still turning nearly 50 years later thanks to a lack of investment by the government-owned Short Brothers, reveals Ryan. "If you'd walked into our machine shop in 1989, it was full of lathes and turning machines that were all stamped Frankfurt, Cologne and Munich."
Four challenges of making it in Northern Ireland
- Shipping to the US
Goods bound for the home of the brave must summon the strength for a courageous journey via road and sea back to mainland UK before retracing their steps back across the Irish Sea. The detour takes nearly a week and Ryan, along with fellow business leaders, is lobbying for government support in introducing a direct link.
- Troubled past
Northern Ireland has struggled to shed the images of bloodshed that marked over 100 years of conflict in the province between republicans and unionists. The Troubles have cast a long shadow over recruitment from the UK and beyond, says Ryan: "Attracting talent is pretty difficult. People don't want to come here because of our history."
- Government support
When the government is on side the results can be stunning, says Ryan. A project to build the wings for the new C-Series at Belfast is one example. A £21m InvestNI grant and £113m of repayable launch aid from Westminster helped convince Bombardier to award the £520m deal to Belfast. The investment has paid dividends for the NI economy through growing export business and jobs. But Ryan wants to see the government pump more of the profits back into local manufacturing as a result. "Just put the money you're earning on the back of original investments back into aerospace because it will earn you more… That's our debate with the government."
- Supply chain weakness
Northern Ireland is almost a microcosm of Great Britain. The public sector dwarfs the private – in part a consequence of companies struggling for investment as a result of the Troubles. "Yes, we have suppliers in Northern Ireland. But if you look at the clusters that Rolls-Royce or GKN would have, it's very small." Bombardier turns to mainland UK and predominately Europe to fill the gaps.
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