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Cirrus Sold To Chinese

Old 28th Feb 2011, 18:24
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Cirrus Sold To Chinese

Cirrus aircraft has been sold to China. Continental Engines has been sold to China. I have no doubt that other aviation businesses will meet the same fate. I also have no doubt these businesses will migrate to China as well, despite promises that it will be "business as usual".

My personal opinion, knowing a little about the business of manufacturing aircraft bits, is that they are going to get into trouble due to the Chinese temperament and culture.

While China is capable of producing goods of superb quality, it requires very direct personal motivation to make it happen. If this is lacking, then the normal Chinese lack of loyalty to anyone who is not "family" asserts itself. This is why such scandals as the Melamine in baby formula occurred - there is no duty of care to anyone who isn't a relative. This is also why the Chinese Government is terrified of losing control, but that is another matter.

What concerns me here is not Cirrus itself, it is their eventual Chinese suppliers, and their suppliers to their suppliers and so on. The requirements for materials traceability, quality control and actual batch acceptance testing on everything that makes up an aircraft are onerous. If anyone doesn't believe me, simply do some digging on the Internet and look up the standards, say for an NAS bolt for example.

It only takes the failure of one supplier far down the supply chain to destroy Cirrus as a brand. By way of example, I'm aware of one company that made power adjustable seats for Ford. The company was sent bankrupt after its Chinese supplier of moulded Acetal gears used substandard Acetal resin, causing the gears and thus the seat mechanism to fail after only a few hours of use.

The temptations in the West to use unapproved and counterfeit aircraft parts have been shown to be great. In the East they will be irresistible. The only thing that could save the situation is an extremely well funded and resourced Chinese regulator armed with draconian powers, up to and including the death penalty.




Avweb newsletter:

Cirrus Industries Inc., parent company of Cirrus Aircraft, has been sold to China Aviation Industry General Aircraft Co.(CAIGA) of Zuhai, China but it appears the company will continue to build parts in Grand Forks, ND and assemble airplanes in Duluth, MN. It has long been rumored that a Chinese company would acquire Cirrus and the final announcement was made Monday morning. CAIGA is a subsidiary of Aviation Industry Corporation (AVIC), the state-owned aviation company of China that makes everything from military jets to airliners. In a news release, Cirrus CEO Brent Wouters says the deal will be a shot in the arm for the company and for its employees in Grand Forks and Duluth. "CAIGA understands the strength and the talent of Cirrus's workforce and the prominence of the Cirrus brand in general aviation," Wouters said. "Through this transaction, CAIGA will invest in our employees in both Minnesota and North Dakota by committing to the continued use of our world-class production facilities."
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Old 28th Feb 2011, 20:42
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A company I once worked for in another life used to manufacture various items for the Dept of Defence including, among other things, aileron control gearboxes. As time went by the pressure to become ISO 9001 compliant in Australia became greater despite the quality of work being done by relatively small companies like ours. We did not have the CNC machines of today or the 9001 protocols in place and bit by slow bit the workload diminished down to a trickle to a point where we were left with machining a few aluminium billets already supplied to us; and even that dried up. Where the work went to instead of us I don't know but I wouldn't be surprised if it went offshore into Asia.

Private enterprise continually faces commercial reality and we in Australia are highly vulnerable to competition. We are stupid, near-sited buffoons working under a different ethos and allow our own industry to shut down and blindly watch examples like the one below unfold around us.

http://www.skf.com/files/891104.pdf


Note: I am not associated with any organisation mentioned or described above in any way whatsoever.
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Old 1st Mar 2011, 02:21
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It only takes the failure of one supplier far down the supply chain to destroy Cirrus as a brand.
We've seen that happening to Boeing's Dreamliner.
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Old 1st Mar 2011, 05:19
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Conversely of course, the Harbin Y12 has been in production for 29 years and appears to be cheap, reliable and relatively accident free.

Chinese license built Migs seem to be as good as the Soviet originals.

Chrysler, Mercedes, BMW, Toyota and MG appear to manufacture quality vehicles in China.

My Chinese made clothes, shoes, TV and kitchen appliances appear to be equally as good and reliable as those made in Europe, at a fraction of the cost.

And restaurants in Shanghai make a far better Chinese meal, at a fraction of the cost, than Chinese restaurants in Dixon Street or Fortitude Valley.......

Just sayin'.............
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Old 1st Mar 2011, 05:48
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Cessna obviously aren't concerned about it with their Skycatcher 162....

It can be a worry though. I recall someone telling me they were getting a boat built over in Thailand and the ply was supplied with the appropriate stamps on it certifying the timber, but the stamps were fake and the timber was well and truly sub-standard.
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Old 1st Mar 2011, 10:45
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My Chinese made clothes, shoes, TV and kitchen appliances appear to be equally as good and reliable as those made in Europe,
Dunno about clothes and shoes, but certainly for TVs and appliances the key to that sentance is the word "appear". They are certainly getting better though.
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Old 1st Mar 2011, 12:00
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You buy Chinese... then, you as the buyer, are the QC inspector. If you want to fly cheap, buy Chinese. You get exactly what you pay for. Don't look too closely at the Dreamliner, or you may see the PRC stamp. If not right now, it won't be long.
"Offshoring" manufacturing, is the cute keyword that means cheap crap for you, the end-user... when you thought you were getting a quality standard... more fat dividends to the shareholders of Corporate America... and grossly overladen wallets to the "clever" lads, who sold all the manufacturing ability (and jobs) to China.
No wonder America is broke, unemployment hangs around 10%, and the U.S. is printing money like confetti. Before long, that's all that greenbacks WILL be good for.
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Old 1st Mar 2011, 16:10
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Don't know what the fuss is all about .. China has been assembling the A320 for their local airlines for the last 2 years or so ...

1st China-assembled Airbus A320 to be delivered to Sichuan Airlines_English_Xinhua
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Old 1st Mar 2011, 18:56
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And when I showed the article about Tianjin produced A320's to my Chinese FO at a Chinese flag carrying airline he said "but we won't have to fly them".
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Old 1st Mar 2011, 20:18
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Assembled by parts from Airbus factories and suppliers that are well known.

Sunfish has summed up the alternative methods well enough. Industrial engineering items are mostly the same I have found
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Old 1st Mar 2011, 20:38
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Don't know what the fuss is all about .. China has been assembling the A320 for their local airlines for the last 2 years or so ...
China also license built (not assembled) a number of MDC MD80 Series aircraft.
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Old 1st Mar 2011, 20:59
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The problem with China is that it takes just one supplier to screw up.....
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Old 1st Mar 2011, 21:26
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The problem with China is that it takes just one supplier to screw up.....
Correct. Also:

The problem with the United States is that it takes just one supplier to screw up.....

The problem with France is that it takes just one supplier to screw up.....

The problem with Canada is that it takes just one supplier to screw up.....

The problem with Brazil is that it takes just one supplier to screw up.....

The problem with the United Kingdom is that it takes just one supplier to screw up.....

The problem with Spain is that it takes just one supplier to screw up.....

The problem with Germany is that it takes just one supplier to screw up.....

The problem with Australia is that it takes just one supplier to screw up.....

Quality control costs money and if you don't want to spend money then guess what is most easily left out by a manufacturer in a lowest cost basis environment.

A close friend of mine is a senior exec for a major German children's clothing company. They have now off shored the vast majority of their manufacturing to China and he argues that the level of QC through traceability and accountability is higher now than when the goods were manufactured locally. His reasoning? The goods are manufactured on a lower cost basis, however because the margin on the goods is now significantly higher (they are sold in the same marketplace as the original goods), the company can spend MORE on both quality control and design than they could previously yet still maintain a higher profit margin on the goods. Their company name has a reputation for quality and their continued income and existance depends on the reputation of the company.

A "Made in China" label shouldn't always not be synonymous with "rubbish". If the market (YOU) demands quality and pays for it, the market will get it.
 
Old 1st Mar 2011, 23:39
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If the market (YOU) demands quality and pays for it, the market will get it.
One of the problems with that being that is some cases there is little or no choice. You either buy the substandard item at a rock bottom price, or do without. Been to a hardware store recently?

Another problem is us. There are enough of us that subscribe to the disposable society mantra (that incidentally keeps the economy going,) that are quite happy to buy crap that needs replacing after a year (or less) that those of us that would prefer to spend a little more and get something halfway decent, often have to spend a large amount more to get something very decent indeed; the halfway decent suppliers have gone out of business or aren't exporting their product to our country.
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Old 2nd Mar 2011, 00:59
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The problem with Chinese manufacturing is the underlying corruption and links between the PLA and virtually all major Chinese businesses. The Ruling Communist Party, via its control device, the PLA, own the majority shareholding of virtually all major Chinese businesses.

Now, when it comes to the crunch, and there's a major conflict between the Communist Party/PLA's priorities, and the Western partners/Western worlds priorities... who do YOU think, is going to come off second best?

The imbeciles in the Western Corporate world have played into China's plans for domination in manufacturing, and domination of the worlds supplies of raw materials for manufacturing, whilst the same Corporate Executives dismantle any possible manufacturing competition in the Western world.
Can anyone see the dangers in this? We will eventually be held to ransom, and made to take, what the Chinese want us to take, at their price.

Already the Chinese own virtually every zinc mine in the world, and effectively control the worlds zinc supplies. There is great concern about who is the mystery holder of vast amounts of commodity metals such as aluminium, aluminium alloys, copper, lead, tin, and zinc, on the LME.
In addition, there are vast amounts of LME "positions" held by largely unknown speculators in the LME. It doesn't take an MBA to figure out who that "mystery" entity is, that has a great interest in making money out of, and controlling metal commodities prices. Need I even mention, "rare earth" elements?

The Chinese are notorious for "shorting" the markets when they know they are going to require sizeable amounts of a certain commodity. They did this with Australian wheat and wool in the early 1970's. Knowing that they had plans for a huge wool purchase, they bought vast amounts of wool futures at low prices... lobbed in their wool order, that sent the wool market ballistic within weeks... whereby they promptly sold off their wool futures, and used the profits to buy their entire Australian wheat purchases for that year.
Effectively, the Australian woolgrowers and the wool market, funded free wheat for the Chinese for a year.

The Chinese manufacturing attitude is geared around supplying quantity, not quality. The QC of Chinese products is totally reliant on how much effort is put in place by the Western corporate partner/s.
The instant the Western partners back is turned, substitution takes place.

Caterpillar has the best QC in the world, but could not build Chinese Perkins engines with standard Cat quality in their initial attempts at manufacturing Perkins engines in China.

Cat went into a Joint Venture with Tianjin Engine Works, and the venture failed when low-quality engines began to appear with substituted components. It took Cat 7 yrs to get out of the mess, using Chinese courts to try and get satisfaction.
Cat got far less satisfaction from the Chinese courts, than they would have expected from any Western court.

At the end of the day, China is still a 3rd world country, with 3rd world practices in labour relations, 3rd world legal standing, and 3rd world manufacturing practices.
Only lip service is paid to principles such as pollution control, wage levels, human rights, and a dozen other features we expect as standard, when dealing with manufacturing in the West... and if the Communist Party makes a decision that impacts your operation, or you personally... good luck to you, trying to seek a remedy.

Last edited by onetrack; 2nd Mar 2011 at 01:30. Reason: addendum
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Old 2nd Mar 2011, 04:47
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Give that man onetrack a cigar.

I know an Australian family who import hardware and automotive tooling under a very well recognised brandname. Their own profit and huge commercial success lies between their cheap purchase price and the retail amount sold here in Aus. But of late, the one member who travels up into China regularly visiting supplying factories is having second thoughts. In the freezing cold the workers are busy on the factory floor if they're lucky, bare earth if they're not.

Now, where's that cigar...
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Old 2nd Mar 2011, 07:57
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My Chinese made clothes,
You have to be kidding right?
Chinese made clothes are invariably crap, I only get South American, Indian made and they are around same price but 10 times the quality! Damn even the $2 shirts in Bangkok $hit all over the $20 Chinese shirts here in AUS. I am in fact still wearing a "cheap" Bangkok special I think I bought it 8 years ago!
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Old 2nd Mar 2011, 08:07
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I work on my house in T-shirts from BKK 12 years ago. $%^kers will not die - so I have resorted to "painting" them to death.......
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Old 2nd Mar 2011, 08:28
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To the contrary Wally, that is globalisation. It is re-alignment of the world manufacturing, services and agricultural base, facilitated by cheaper sea and air transport costs and world wide internet facilities.

If you want to buy a car, TV, washing machine, computer or other appliance, do you religiously search out wholey Australian made by an Australian owned company, or do you buy on price and perceived quality and reliability - i.e. buying a "brand" - regardless of country of manufacture?

I'm an average, middle income Australian living in suburbia. I drive an imported Nissan 4WD; my Solarhart hot water system is Australian made; my solar electric generation system has Chinese made panels, US made inverter; my air conditioner is Mitsubsihi manufactured in China; my fridge freezer is LG assembled in Vietnam. My lawn mower is Australian made whilst my John Deere ride-on is US made. The components of my brand name PC appears to be the League of Nations!

Last time I flew internationally, I flew in a European made aircraft, with a mix of nationalities in cabin crew, fuel probably extracted in the Middle East and refined in Singapore, by an airline that is 20% or 30% foreign owned - I travelled on a Qantas Airbus.

I've been around a few years longer than most. Globalisation has brought me a far better quality of life and lower cost consumer goods than my parents could ever dream of. My parents were also middle class with a successful small business. I remember Father had to save for months to buy our first STC fridge and first HMV black and white TV. In 1952 my parents and I travelled between Sydney and Hobart, return, on an Ansett flying boat. The fares for three of us were approximately six months of the average worker's wages. Most people can now travel around the world by air on far less than a month's wages.

I think you fly US made King Airs or Swiss made Pilatus? If you are really wrapped in this Australian made and owned thing, I assume you have demanded your employer replace their foreign made aircraft, with GAF Nomads?

Of course, globalisation is a two way street. Aussie wines dominate on the world market and Aussie minerals, coal, alumina, iron ore, LNG and uranium help to balance the books. Our Aussie farmers are amongst the world's most efficient, able to compete successfully against US and European farm subsidies. Our beef, lamb, game meats and grain exports are major income earners for Australia.

The Chinese business culture is rather unique, it takes a very long term view on investments. I don't know a Cirrus from a bunch of celery, but on past performance by emerging Chinese industries, my gues in time you will see a better Cirrus, with more bells and whistles, at a lower cost than now. And if they can't export them for whatever reason, I'm sure an infinite number could be absorbed into the Chinese domestic flight training market in coming years. And that has to better than Australia ever did with the Victa Airtourer and Nomad!

But globalisation only goes so far - I wasn't happy with a Kiwi son in law and two grand daughters who were born US citizens!

That is life Wally. Enjoy!
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Old 2nd Mar 2011, 08:38
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Tail wheel, the only problem with a wider range of cheaper consumer goods and services as a result of globalization, is that it ain't sustainable.

I like my toys and luxuries as much as the next person. But subsequent generations are going to have to pay for it, one way or another.
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