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Racing toward the future

Aéro Montréal is an organization that brings together all the major decision makers in Quebec’s aerospace sector, including manufacturers, educational and research institutions, associations and unions. It recently launched MACH, a program to improve the competitiveness of the province’s aerospace industry supply chain, backed by a $4 million grant from the Quebec government to kick-start the initiative.

Montreal’s Bombardier Aerospace, the nation’s leading manufacturer of business and commercial jets, is one of the key participants in the MACH initiative. Photo: Bombardier

The program is also getting funding from the private sector. To wit, Aluminerie Alouette of Sept-îles, is kicking in $1.5 million over five years, as several of aluminum’s properties, such as its light weight and malleability, make it a preferred material for many uses in the aerospace industry.

MACH is being launched at a time when employment in Quebec’s aerospace sector declined 8.1 per cent between 2009/10, according to l’Institut de la statistique du Québec. The number of jobs in the sector dropped to 20,601 from 22,422 in the previous year. By comparison, aerospace jobs throughout Canada declined 6.4 per cent to 36,947 employees.

One bright spot is Bombardier Aerospace. At the beginning of the year, Bombardier, the largest Canadian employer in the sector, had 30,300 people on its payroll worldwide, 4.8 per cent more than a year earlier. The company has also hired a few hundred engineers in the Montreal area in the past few months to work on the CSeries commercial aircraft for the 110-150-seat market that will be built at its Mirabel plant north of the city.

Eight OEMs are participating in the first phase of the MACH initiative, including Sonaca Montréal. Photo: Sonaca Montréal

The decline in the aerospace market is nothing new. Since 2001, the average annual drop in the sector is 2.1 per cent in Quebec and three per cent Canada-wide. By comparison, the decline in the U.S. is only 0.7 per cent. Exports declined 15.5 per cent last year in Quebec to $6.68 billion and are down 9.7 per cent across Canada to $11.2 billion. U.S. exports were off 13 per cent to $83.9 billion.

“Quebec’s aerospace industry has been mobilizing to stay competitive and maintain its global position and has decided to quickly address the supply chain challenges,” says Gilles Labbé, chairman of both Aéro Montreal and Héroux-Devtek.

“Stemming from the work by Aéro Montréal’s Supply Chain Working Group, the MACH initiative is the result of joint discussions among members of the cluster and intends to be a unifying process to support the long-term strategic growth of the sector,” explains Philippe Hoste, president of the Aéro Montréal Supply Chain Development Working Group and CEO of Sonaca Montréal.

The working group identified five priority areas that MACH wants to address, namely branding and promotion, innovation, supply chain development, human resources and national security and defence.

The MACH initiative will help support long-term growth in the sector, says Philippe Hoste, CEO of Sonaca Montréal.

The MACH initiative is aimed at strengthening the individual links in the supply chain, namely subcontractors, to accelerate its overall performance. The entire program consists of a $15 million public-private collaboration over five years involving 70 suppliers, with 20 taking part this year as selected by the eight OEMs taking part in the program as mentors. In addition to offering financial support, the MACH program will also provide a framework for excellence by offering methodologies, tools, and training programs to increase their capabilities in 15 business processes.

The 20 participating small- and medium-sized enterprises (SME), or subcontractors, will be paired with original equipment manufacturer (OEM) clients, after which they’ll receive a certificate between the lowest level MACH 1 up to MACH 5 that will offer both increased market visibility and more business opportunities.

“Every year, the suppliers are re-evaluated and are given a list of consultants or training courses they can take to improve their performance. The success of the program will be based on the ability of the suppliers moving up the scale to MACH 5,” explains Suzanne Benoît, CEO of Aéro Montréal.

Pratt & Whitney Canada’s successful development of engines such as the PW308A have helped Quebec aerospace raise the bar on the world stage.

Eight OEMs are participating in the first phase of the MACH program. They consist of la crème de la crème of Quebec’s aerospace sector, namely Bombardier Aerospace, Pratt & Whitney Canada, CAE, Bell Helicopter Textron Canada, Héroux-Devtek, L-3 Communications MAS, Sonaca Montréal and Mecachrome.

“Large OEMs like Bombardier don’t want to deal with thousands of suppliers. Instead they want to deal with fewer subcontractors and give them larger work packages,” says Benoît. “Many SMEs feel threatened that they’ll miss out on contracts because they don’t have the resources or knowledge to compete. MACH wants to get them involved in joint ventures and improve their competitiveness and know-how so they don’t get left behind.”

And because the aerospace industry is global, with many large OEMs subcontracting work in different countries, local SMEs often don’t know the players from other countries that they should be dealing with. By being involved in MACH it is hoped they’ll get to know whom they should approach for work, adds Benoît.

Another objective of MACH is to develop strategies and projects to close the quality gap in Quebec’s supply chain to make it a world-class supply chain. The program allows suppliers and OEMs to evaluate and identify performance gaps. As a result, it provides suppliers with the necessary data to determine which course of action is most suited for improving their position within the supply chain. The framework prioritizes three areas of focus for improved competitiveness: excellence in leadership, excellence in operations, and excellence in planning and developing the workforce.

What’s in it for the OEMs that give their free time to the program participants? “Instead of sourcing worldwide to deal with the best suppliers, OEMs would prefer to deal with local suppliers if they can improve their competitiveness and abilities,” suggests Benoît. “Because salaries are higher here, local companies have to be more innovative to compete.”

She cites Pratt & Whitney Canada’s Mirabel plant, which is the most advanced Pratt & Whitney operation in the world in terms of robotics, and thereby relies less on manpower.

“The big threat is coming from low-cost countries, because a lot of OEMs are not dealing with local suppliers with their higher salaries. That’s why they have to be able to deliver quality products on time and to do that, they need to improve their human resources.

“The final assembly of the CSeries will be done at Mirabel. That’s where we can compete with value-added engineering and design. It’s a highly specialized workforce and that’s where we have to keep our edge,” Benoît says.

Fostering the global perspective
In addition to MACH, Aéro Montréal is busy fostering global partnerships. At the Paris Air Show in June, it signed a strategic collaboration agreement with Aerospace & Defence Research Collaboratory led by Arizona State University to foster stronger exchanges between Quebec and Arizona aerospace and defence industries.

Quebec’s Héroux-Devtek is committed to creating the landing gear of the future.

Under the agreement, both parties promise to exchange information about the possibilities of taking part in local and international projects and programs: exchange information about training, conferences, seminars or co-operation days; invite each other to their respective events; jointly organize economic missions or broker meetings for the members of both clusters; and to define possibilities of research projects for members of both organizations.

Benoît says it will provide significant benefits to Quebec’s aerospace industry. “We share similar objectives and strongly believe in the potential for dialogue on mutual challenges. Quebec’s aerospace industry has been mobilizing to stay competitive and maintain its global position. Such an agreement will certainly help our companies here in Quebec.”

Aéro Montréal has established a network of clusters by signing similar agreements with North West of England Aerospace Alliance, Aerospace Valley; World Competitiveness Cluster of Midi-Pyrénées & Aquitaine, France; Skywin Wallonia, Belgium; BavAIRia and “Hamburg – The place for aviation” Germany; Distretto Aerospaziale Pugliese, Italy; and with Aviation Valley, Poland.

And in December, Aéro Montréal is organizing the Aerospace Innovation Forum 2011, the third forum it has organized dedicated to aerospace innovation. The event, which attracted 450 participants last year from around the world, will address topics of interest to Quebec, Canadian and international aerospace industry stakeholders, university representatives, research centres, policy makers, students and specialized journalists.

The forum will include conferences and workshops on best practices and current and future strategies of leading and upcoming aerospace clusters from around the world. It will also feature an exhibit of aerospace technologies and B2B meetings to provide participants with an overview of advanced technologies and business opportunities.

The most ambitious project Aéro Montréal is involved in, a first in Canada, is the Greener Aircraft Catalyst Project, whose objective is to develop a greener aircraft equipped with intelligent systems, less costly to build and more effective. By incorporating several new technologies, the aircraft will be lighter, more efficient, quieter and produce less carbon.

For the industry, more sustainable airplanes will also be a key to competitiveness in the field of aviation. In 10 or 15 years, aircraft with a reduced environmental footprint will have a clear competitive advantage over others, especially in a context where there are more and more players, according to Benoît.

“To maintain our advantage in Quebec, we must start developing, beginning right now, the technologies needed to design and manufacture such aircraft,” Benoît says.

The project is designed to allow the entire aerospace industry to participate in the quest for sustainable development and stand out from the competition. Within three or four years, the initiative will allow partners to participate in specific projects and to bid on major programs around the world.

The project has a private-public budget of $150 million over four years, funded 53 per cent by industry and 47 per cent by the Quebec government. By comparison, the EU has a similar project called the Clean Sky Initiative with a budget of $2.3 billion over a similar period, Benoît says.
“This type of research is the Death Valley for OEMs, because it’s very expensive and very risky. The fact that the government is participating levels the playing field a bit,” she says.

Aéro Montréal CEO Suzanne Benoît says the success of the MACH program in Quebec rests on key suppliers performing with top efficiency.

The project is divided into five different components of the aerospace industry. They are: Aircraft Fuselage Structures in Composite Materials, headed by Bombardier and Bell Helicopter Textron; Fuel Efficient Engine led by Pratt & Whitney Canada; Integrated Avionics for Cockpit Applications overseen by Esterline CMC Electronics; Integrated Avionics for Critical Systems headed by Thales Canada; and Landing Gear of the Future led by Héroux-Devtek.

“The noise you hear when a plane lands is from the landing gear, not the engines,” Benoît points out. “So this will be a very interesting challenge.”

It would be safe to say the entire aerospace industry faces a very interesting challenge to maintain its competitive edge. And with some of the biggest names in the business headquartered in Quebec, they won’t lack inexperience.