Nearly $1 Billion in Aircraft, Spacecraft and Parts Exported to the USA?

[Dick Smith]

On page 5 of The Australian this morning in a panel headed “Top Merchandise Exports to the U.S.” it lists under Aircraft, Spacecraft and Parts the figure of $991 million. This seems extraordinary when the amount of gold exports are $133 million and raw aluminium of $124 million.

Can anyone advise where this $1 billion worth of exports comes from? I’m not saying it’s wrong – in deed it’s good if it’s true but it seems an extraordinary figure.

Would love to have some information from anyone in the know.

Maybe it's secondhand aircraft being sold back to the US? Like my Citation?

[Tankengine]

I understand some 787 parts are manufactured here.

[dartman2]

737's and A320's at the end of lease being returned.

[TWT]

Boeing: Boeing Australia - Boeing Aerostructures Australia (BAA) (http://www.boeing.com.au/boeing-in-australia/subsidiaries/boeing-aerostructures-australia.page)

[Band a Lot]

I wonder what Boeing claims for is costs for Boeing Australia over the same period!

[Dark Knight]

Yes Dick, Australia, Australian Manufacturing, Australian small business is quietly involved in many aerospace manufacturing processes for US and other countries.

Additionally similar manufactures quietly go about their business manufacturing parts and equipment for many industries; I know of a few doing this for Ford USA, Harley Davidson and various golf industries to indicate but a few.

All are under further serious threat with such things as ratification of the Paris Climate Change agreement, the imminent serious high continuous increasing cost of Utilities (gas, water and particularly electricity); closure of power generating stations with resultant unreliable, quality power sources.

[Band a Lot]

What is the benefit of manufacturing the 737, 787, 777 & 747 parts in Australia?


It must be cheaper to manufacture in the USA in both wages and freight costs, or even cheaper in lower wage countries.

[The Banjo]

Boeing: Boeing Australia - Boeing Aerostructures Australia (BAA) (http://www.boeing.com.au/boeing-in-australia/subsidiaries/boeing-aerostructures-australia.page)

Also Redbank Engineering that was purchased by RUAG in 2015.

[no_one]

Quid pro quo for a Defence contract?..

http://australianaviation.com.au/2014/02/govt-approves-raaf-p-8-acquisition/


First RAAF P-8A fuselage in production | Australian Aviation (http://australianaviation.com.au/2015/11/first-raaf-p-8a-fuselage-in-production/)

[onetrack]

Dick, you need to get those figures checked for gold and aluminium - then the figure for aircraft parts production will assume the correct proportions.

As a former gold mine owner and gold miner, I can definitely assure you that gold alone earns a whole lot more than $133M for Australia.

In 2014/2015, Australia exported 284 tonnes of gold - for a net earnings of AU$14 Billion.
Gold is Australias 6th largest export earner, and is worth more than the combined total export value for wheat, barley, dairy, sugar and cotton.

Likewise for aluminium - in 2014-15, Australia produced 1.6 million tonnes of aluminium, creating exports worth $3.8 billion.

[Dick Smith]

Sounds as if that Aus article is flawed. Strange. They are normally accurate.

[no_one]

The Australians figures are probably right. The figures were exports to the USA not total exports. The USA doesn't import much of our Gold or aluminium because the have access to their own supplies. Mist of Australia's gold ends up elsewhere.

http://dfat.gov.au/about-us/publications/Documents/australias-gold-industry-trade-production-and-outlook.pdf

[Sunfish]

I once had a B787 rudder fitting that I used as a doorstop. It was given to me by Boeing Australia when I proposed a program to get more of Australian toolmakers into the aerospace business.

You may be surprised to learn that there are a few Australian ex. - toolmaking firms that do very, very nicely out of Boeing, Airbus, GE and Pratt and Whitney, although the aberration of a high dollar may have temporarily hurt them.

To put that another way, there was one company where the owners weren't buying new Mercedes each year, they were buying new Ferraris!

The Australian toolmaker is a resourceful beast, skilled and used to doing with one dollar what anyone else can do with two. Their products are world class to the point where some of them finally realised that the visitors from GE etc. were there not to "help" production but steal their intellectual property.


"intellectual property"? Try machining an Inconel ring into a foot wide tracery a millimetre or so thick accurate to less than a thousandth of an inch. Then of course there is double cut plunge grinding of turbine blade roots - doubled production speed and improved accuracy at the same time, given away for nothing to GE. There are thousands of examples of Australian high precision innovation.

I tried to get more firms involved in this business - which is why I had sample parts and drawings from Boeing - for them to explore quoting. I tried to organise getting some processing set up - all those BMS standard processes, but boredom, State Government BS and suchlike ensured that I left before I could get the project rolling.

More power to Aussie industries like Marand.

[hiwaytohell]

Can anyone advise where this $1 billion worth of exports comes from? I’m not saying it’s wrong – in deed it’s good if it’s true but it seems an extraordinary figure.With Australia's Defence procurement there are quite a lot of "offsets" factored into the acquisition.

In recent years we have bought a lot of American hardware, Super Hornets, Wedgetails, Romeos and Poseidons, not to mention the F35s.

As a part of these contracts the US Aerospace manufacturers have source a fair proportion of work, either directly or indirectly in Australia.

Companies like Quickstep who manufacture the vertical tails for the F35.

Here are a couple of links from a quick Google search:

http://www.google.com.au/url?sa=t&rct=j&q=&esrc=s&source=web&cd=6&cad=rja&uact=8&ved=0ahUKEwiU8MCqyKLQAhUCF5QKHc4kA5kQFgg-MAU&url=http%3A%2F%2Fwww.aph.gov.au%2FDocumentStore.ashx%3Fid%3D 4de004ab-e1f5-4a87-981e-95bd1b7c6f20%26subId%3D298326&usg=AFQjCNF6qLqCFy1suX0qawBj5Wsqy1MlCg

The US just chose a bunch of Australian companies to look after F-35 maintenance | Business Insider (http://www.businessinsider.com.au/america-just-chose-a-bunch-of-australian-companies-to-look-after-f-35-maintenance-2016-11)

[Seagull V]

As stated above manufacturing offset would account for the bulk of the total. However, a common garden variety Aussie built GA8 Airvan is three quarters of a million AUD. Apart from new aircraft export about 50 GA8s show up on the US register, all of which need spares, which would add to the total dollars.
As my old Scottish mentor would say "Many a mickle makes a muckle".

[Sunfish]

Industry offset work is just a waste of time because as soon as the contract finishes, the jobs and the work goes straight back to the USA.

Oh, and another thing, the intellectual property we develop also has to be "shared" with the principle, so any competitive advantage is lost along with the contract.

So for example CAC developed double cut plunge grinding for turbine blades which doubled the speed of production, halved part of the cost, and improved their accuracy at the same time.

Plunge grinding is a technique of metal cutting where the article is fed into a grinding wheel in the same direction as the wheel is turning (the opposite of conventional grinding). It requires great strength, rigidity and control of the grinding machine or you get a jam followed by a potentially lethal explosion as the grinding wheel shatters and flies off in all directions at high speed. Plunge grinding gives a better surface finish than conventional grinding and is faster which is why it is used.

Prior to CACs ingenious and ground breaking development, the fir tree at the bottom of the blade was ground one side at a time in the engine industry - which meant that accuracy depended to a large extent on how well your fixture system located the blade when you reversed it to grind the other side.

CAC solved that problem by grinding both sides at once - which was a major technical achievement.

That should have given CAC an enduring and unbeatable competitive advantage in processing blades for GE's F 404 engine and any other for that matter. That should have resulted in further contracts based on cost and accuracy.

However this was one of those wonderful "offset" contracts.... GE simply marched in one day and said "Show us how you are doing this and give us all the technical details of your process as required under our contract". So CACs competitive advantage went straight back to Massachusetts in a GE engineers briefcase, and in due course the contract was not renewed.

I know of at least two other cases where this happened and there are undoubtedly more. So much for offset contracts, the technology transfer ends up going the wrong way and industry capability here is not really sustainable after the offset finishes.

To put that anther way; its like dancing with your sister. It looks like something is going on but really nothing is happening.

[Band a Lot]

With all due respects to the Airvan GA8, I don't think parts for 50 aircraft would be mush of a $ export from Australia to USA over this period - I would even guess more value in Jabiru engine sales would be true than GA8 parts.

As for GA8 aircraft exports - I can not recall when they started to sell, but certainly about 15 years if not more. So lets say average is 4 a year at $1,000,000 per GA8. That's only $4 mill out of almost $1 billion.

Again good on the GA8, but it is hardly a factor here in the USA/AU trade numbers given.