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Airbus says Tianjin hitting cost goals
Published on: 2010-11-22
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Airbus is meeting cost targets at an assembly plant in north China and will shortly deliver its 35th aircraft assembled outside Europe "on time and on quality", the plant manager said on Friday.

The European planemaker opened the factory in 2008 to boost sales to the fast-growing Chinese market where it lagged for many years behind rival Boeing.

The first Airbus A320 single-aisle jetliner rolled off the production line in mid-2009 and Airbus has so far produced 23 planes in the Chinese port city this year, after 11 in 2009.

"The operational ramp-up is fully in line with our planning," General Manager Jean-Luc Charles told a group of visiting journalists.

The Toulouse-born engineer declined to give production targets beyond 2010, which have to be adopted with Airbus's 49-percent Chinese joint-venture partner.

But he gave an informal guideline of 40 planes in 2012, which if taken precisely suggests a plateau of four aircraft a month planned for end-2011 could slip by a few weeks.

Production has now reached three aircraft a month.

There is no automatic way of translating monthly rates to annual deliveries because different planemakers accommodate different levels of annual slowdowns for vacation periods.

Charles said a production rate of four planes a month equated to between 44 and 48 planes a year for the Airbus plant.

"We are delivering aircraft on time and on quality and on cost versus the budget," Charles said.

Airbus said when opening the plant it intended to reach peak production of four planes a month from Tianjin by end-2011. Its production is committed until 2013 or 2014, Charles said.

Charles said teething problems in setting up the plant had eased and that costs were "on target" compared with the company's internal planning. He declined to give details.

Despite cheaper labour, many costs are higher than in Europe. A major factor is the need to hold one and a half months of inventory as a buffer against delays in the 30-day voyage by sea for aircraft sections and components built in Europe.

This compares with razor-thin stocks at the Hamburg A320 assembly line which was copied for the Tianjin installation employing 450 workers, 90 of them expatriates.
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