The South of the USA between redneck tradition and aerospace supply chain

(To Leonardo Chiti)
15/12/16

Entered the common use now for a long time, the term redneck it refers to the stereotypical image of the peasant of the South, with the rude and proud character, which has a reddened neck due to exposure to the sun due to grazing duties and surveillance of cattle herds, or working in the fields.

Both the declensions are summarized as follows (the two-faced cowherd and campagnolo zappaterra), of this social figure represented countless times, both in film productions and in the series made for the small screen, with unfailing and more or less benevolent irony.

On average, the people of the South are far from being ashamed or even denying those traits but rather claiming them as distinctive elements of the lifestyle of the "real Americans". The romantic attachment to the myth of the Frontier, to the adventurous spirit of the pioneers who conquered it and to the genuineness of rural life, is accompanied by the most advanced modernity represented by economic-industrial groups operating in all sectors, with those at the top higher content of high technology.

Emblematic in this sense is the city of Fort Worth, near Dallas, which has long been one of the world's leading manufacturing centers for the aerospace industry and the Dallas-Fort Worth International Airport is among the most crowded airports in the world . At the same time, the inhabitants here are proud of the cattle herds, thanks to which Fort Worth had earned the nickname of "city of the cow" (cowtown), and still today many people show off the herdsman's clothing on a daily basis (wide-brimmed hat , ankle boots and leather jacket), also worn by office workers.

As the symbol par excellence of the identity definition of the American people, the epic of the conquest of the Frontier could not be involved in the race for the militarization of space that, for the energies and human abilities required and the necessary financial resources, needed a mobilizing idea-force that was not limited to political-military rivalry with the Soviet Union.

Thus, the appeal of President Kennedy (in the 25 May 1961 speech with which he launched the goal of putting an American foot on the Moon), to the pioneering soul of his fellow citizens, will become a constant for the successive administrations that will undertake to collect the wider consensus, and more funding possible, around the various space programs.

In the words of Ronald Reagan of January 1984: Nothing is more important than our next frontier: space. Nowhere else can we demonstrate our technological leadership and our ability to make life on Earth better (see Lorenza Sebesta-Filippo Pigliacelli, "The Earth seen from above. A brief history of the militarization of space", Carocci publisher, 2008).

Space missions can be seen as the result of the combination of the strong suggestion that hovering in flight has always exerted on humanity, and military necessities of equally ancient tradition, in fact since the first clashes between men in arms, occupation on a battlefield of an elevated position (as well as the construction of a city or a fortification on a hill), is identified with the acquisition of a position of advantage.

According to this logic, to be able to count on the activity of satellite constellations with which the space has been "occupied" up to tens of thousands of kilometers above the earth's surface, offers the maximum imaginable advantage, allowing not only to enhance its own capacities of observation, listening and communication, but also to neutralize (or at least temporarily block or "dirty") those of the other party.

With the addition of this “fourth dimension” to the battlefield (after land, sea and sky), the militarization of space marks a rise in level (not only in terms of altitude), of the concept of air superiority, for support that this can provide three classic components of action in an operational theater: seeing far away (both in an offensive and defensive key), striking the farthest - and with the utmost precision - possible, penetrating effectively into the enemy's defenses in combination with the highest obtainable level of prior suppression of his attacking or retaliatory abilities.

The oldest university in Texas is the Southwestern University established in the 1840 by the Republic of Texas (which will join the United States in the 1845), and today the Lone Star State is one of the avant-garde areas in the world for science and technology, thanks to a development path whose origin is conventionally traced back to 1930, the year in which Geophysical Service Incorporated was founded.

This Dallas company operating in the sector of equipment for the earthquake-resistant materials and construction industry, and defense electronics, in the 1951 will undertake a reorganization following which it will change its name to Texas Instruments (TI), and to the premises of TI's Central Research Labs, Jack Kilby built the first integrated circuit in the 1958.

TI has been a leader in computing and the digital economy for decades (semiconductors, microprocessors, artificial intelligence, etc.), as well as in consumer electronics where, for example, it has launched the first pocket calculators. In the 1997, its activities in the Defense branch relating to radar equipment and launch and pointing systems for missiles and laser-guided missiles, were acquired by Raytheon Corp., world leader in missiles and military electronics.

In corporate restructuring and reorganization triggered by the outbreak of the "dotcom bubble" between the 2000 and the 2001, and the shock wave of the great financial crisis of the 2008, Texas has continued to climb the positions of the federal rankings in the IT and telecommunications, coming to overcome New York State and taking second place, behind California.

In Austin there is a large industrial cluster known as "Silicon Hills", composed of companies specialized in the production of hardware, software and semiconductors. The workforce employed is highly qualified and the percentage of employees who have obtained at least a degree (mainly in engineering or other scientific disciplines), is around 25%.

Between universities and other public and private bodies, Texas hosts about 400 research centers, many of which are of international importance, such as the San Antonio's Southwest Research Institute, operating in the fields of electronics and computers, environmental sciences and nuclear physics. In the north of the Dallas metropolitan area lies the Richardson Telecom Corridor, home of around 600 telecommunications company of which almost 60% is concentrated in an area of ​​just over 5 km2 (2 square miles).

The Johnson Space Center is one of the most advanced and prestigious poles in the world for aerospace research and training. Here technicians and engineers are employed from all over the world and in collaboration with the other great NASA center of the South - Marshall Space Flight Center of Huntsville, Alabama - the institute of Houston plays a fundamental role for the planning and the construction of the various components (pressurized modules where the crew is housed and worked, independent non-pressurized platforms and vehicles for orbital maneuvers), destined for the International Space Station.

Present on the podium of the US standings both in terms of employees in the aerospace sector (3 place after California and State of Washington), and in terms of value of industrial production (2 ° behind California), Texas boasts solid credentials regarding MRO (maintenance, repairs and overhaul), which includes in addition to the "classic" operations of maintenance, repair and overhaul, or the manufacture of spare parts, including the training of pilots, the provision of special engineering solutions, digital processing of flight plans, etc.

For these activities we can count on a pool of specialized skills fed locally by 14 training institutes for aerospace maintenance and technical assistance certified by the FAA (Federal Aviation Administration), which at the national level place Texas in second position at shoulders of the usual California.

The service segment is a highly profitable market segment with significant prospects for expansion, according to Boeing and Airbus estimates, which forecast a turnover of 2.500-3.000 MLD of $ for the next 10-20 years, which makes it a very attractive branch of activity but which is already well controlled by large component suppliers and motorists, who in some cases owe 50% of their revenues to the MRO.

In spite of the overall balance of power, the giants of the Euro-American duo would seem to be more lagging (but for this reason with greater potential growth margins), given that for Airbus these activities represent just 5% of turnover while Boeing declares to weigh for the 7% of the world market for civil MRO and for 9% for Defense.

Around San Antonio, after more than a decade of MRO in the military field, Boeing started in 2011 in May a support program for the 787 Dreamliner, which was followed by a further expansion of the plants (together with those of Oklahoma City), after the final closure of the Wichita site in Kansas at the end of the 2014.

On November 22nd, the group led by Dennis Muilenburg launched the campaign to expand its market share with the announcement of the creation of a division dedicated to services - Boeing Global Services - in which the activities of Boeing Commercial Aviation will converge (BCA), and Boeing Defense, Space & Security (BDS), and in which 25.000 employees out of a total of 160.000 will work. The operational debut of the new division is scheduled for the third quarter of 2017 and will be headed by Stanley Deal, coming from the top management of BCA Services. The headquarters will be in Dallas where Boeing's spare parts subsidiary Aviall already has an important presence.

Despite the critical mass - industrial, commercial, financial, political - that a giant like Boeing can put in place, the reinforcement plan in the MRO branch will have to deal with some unknown factors related not only to the fierce competition of groups with more consolidated tradition operational in services, but also in the intertwining of relationships at an overall level between the protagonists of the aeronautical sector, where, depending on the programs, a certain interchangeability of the roles of final assembler, supplier, industrial partner, customer, etc. emerges

In West Palm Beach, Florida, Dassault Aviation - also present in the South of the USA with the great Little Rock production center in Arkansas - has one of its main facilities dedicated to MRO activities, or, according to the French version of the acronym, MCO: maintien en condition opérationnelle.

The Bombardier and Gulfstream groups boast important settlements in southern Florida and Georgia, and their specialized MRO service sites are located in Dallas where, in the 2009, Bombardier MRO Services opened its second center after Belfast, Ireland, for improve technical assistance and after-sales support offered to its customers (for the Canadair Regional Jet family), in the United States and in Latin America.

The establishment of the main aeronautical manufacturers in the South and the development of aerospace have also attracted companies operating in the sub-supply chain of components and services connected to large groups positioned at the top of the sector's production pyramid. The main manufacturers of aerospace components are not simply manufacturers and sellers of complex industrial product parts, subsequently assembled by the prime contractor responsible for a given program. Due to the size reached and the role played within the supply chain, the major suppliers of the large aeronautical groups are true industrial partners of the latter and participate in product development.

For example, according to a statement last February by the president of Boeing France, Yves Galland, the engines built by Safran-Snecma will equip an aircraft on two of the 737 MAX that are coming out of the production lines of the Chicago-Seattle giant.

In 2013 GE Aviation inaugurated in Auburn, Alabama, a factory for the production of engine parts in special alloys and, as shown in the table, the major suppliers (of 1 ° and 2 ° level) of components, such as Triumph Aerostructures, Spirit AeroSystems, UTC Aerospace Systems (United Technologies group), and GKN Aerospace, can count on a solid network of territorial roots in the South of the USA.

The main suppliers of aerospace components in the southern USA

GROUP

CITY

STATE

BUSINESS FUNCTION

Triumph Aerostructures

Red Oak

Texas

Design and assembly of large metal or composite components

Grand Prairie

Texas

Fuselage and fletchings

Milledgeville

Georgia

Complex components in composites

Nashville

Tennessee

Large components and system integration

Stuart

Florida

Processing of spare parts and special paints

Spirit AeroSystems

McAlester

Oklahoma

Spare parts and components processing for Gulfstream (G 650 and G 280 programs)

Tulsa

Oklahoma

Wings and large components for Boeing

Nashville

Tennessee

Engineering Design Center

Kinston

North Carolina

Design and fabrication in composite of the central section of the fuselage and part of the wings of the Airbus A 350

UTC Aerospace Systems

Charlotte

North Carolina

Legal and administrative office

Foley

Alabama

Cell and propulsion

San Marcos

Texas

Cell and propulsion

Bamberg

South Carolina

Engine components

Houston

Texas

Engine components

Little Rock

Arkansas

Equipment and avionics

GKN Aerospace

Irving

Texas

Registered and administrative office of the North America division

Tallassee

Alabama

Composite structures and engineering

Orangeburg

South Carolina

Composite components for HondaJet

Source: MESI: Ministère de l'Economie, Science et Innovation du Québec, May 2015.

Some branches of Rockwell International (in particular Rocketdyne, sold in 2005 to the then UTC Pratt & Whitney by Boeing), created in March 1967 from the merger between Rockwell Standard and North American Aviation, have merged into UTC Aerospace Systems' business perimeter. with the initial name of North American Rockwell.

Similarly, following the acquisition of the Carlyle Group in the 2010, Triumph Aerostructures brings together the skills and production facilities of Vought, whose main aeronautical productions, together with those of North American Aviation, have already been dealt with on another occasion (see article).

Here it can be added that North American Rockwell was NASA's main industrial partner for the launch of the Space Shuttle program authorized by President Nixon on January 3 1972, and Rockwell International served as prime contractor for the strategic B bomber -1 Lancer (approved by the USAF in the 1970), to which the Vought also participated as a subcontractor, creating the rear part of the fuselage.

Employed for the first time in December of the 1998 in Iraq, as part of the Desert Fox operation, the project of this four-engine with ability to release conventional and nuclear weapons, variable geometry wing and autonomy of 12.000 km, dates back to the AMSA program (Advanced Manned Strategic Aircraft), launched by the USAF in the years' 60 for the replacement of the Boeing B-52.

The 23 December 1974 flew the first B-1A prototype but three years later the Carter administration canceled the program that was resumed in the 1981 with the Reagan presidency as B-1B, a slightly simplified version albeit with avionic and constructive improvements, with a goal of production that was fixed to specimens 100 (instead of the 244 of the B-1A), whose deliveries began in 1985.

The competition struggle that sees the giants of aerospace as protagonists is not limited to a confrontation between single large companies, but involves the entire network of industrial relations (which reaches thousands of small and medium-sized enterprises), of which the leading groups of the sector are the fulcrum. In general, the management of supply chain relationships is in all respects an integral part of the corporate strategy of a large industrial group, including the prime defense contractors, where in some cases companies such as Boeing, Airbus or Lockheed-Martin, in fixing their own production rates must take into account the capacity of the subcontracting chain to sustain those levels (and above all with very specific cost constraints), risking otherwise to incur in supply line production difficulties and consequent delivery delays.

Significant in this regard were the tensions of last August between Volkswagen and two of its suppliers (Car Trim and ES Automobilguss, subsidiaries of the Prevent group), regarding the prices of the components imposed by VW top management, which led to a break of a few days of work on the Golf assembly lines, until an agreement is reached. If we consider that on average in the automotive sector the weight of the subcontracting of components fluctuates between 50% and 60%, while in aerospace it can reach 70%, it is easy to understand the importance of supply chain relations for this sector.

In recent years, one of the grounds on which Boeing and Airbus have fought have been concerned with the costs of subcontracting, with the European manufacturer, for example, requesting a lowering of the price on the A-320 components of 10% up to 2019, as part of the SCOPE + cost reduction program launched between the spring and summer of the 2014.

Il Single-Aisle Cost Optimization Program-plus represented the counter-move by Airbus against Boeing's launch of the PFS (Partnership for Success) project, with which the American competitor had renegotiated a series of "agreements" with its subcontractors (the companies that refused to adhere to it were excluded from the production chain and included in a sort of "no-fly list"), to optimize the efficiency of the entire supply chain, setting a cost reduction target for 15%.

Predictably the grievances of the subcontractor companies did not wait, but from the summits of Toulouse it is replied that Airbus offers visibility and guaranteed and stable production volumes to its industrial partners who must therefore take on the efforts to increase competitiveness and profitability compared to to Boeing.

Moreover, the balance of power is in any case favorable to world-class competitors and the extent of the importance of this clash of titans is also given by the strong grip exerted on the "attentions" of subcontractors that end up penalizing smaller groups, even when these last are in some way subsidiaries of the same leading companies.

For example, the French-Italian ATR (a joint venture of Airbus and Leonardo), missed its delivery targets in the 2015 (88 compared to the 95 provided), due to delays in supplies. This is attributable only in part to the difficulties of the supply chain to adapt to the increase in production of the same ATR - from 50 to 90 unit - of turboprop equipment. According to what was declared by the then executive president, Patrick de Castelbajac (since last November, Company Secretary and Airbus's own Chief of Staff): in the face of generalized growth in orders, subcontractors cannot always satisfy all aircraft manufacturers and tend to favor larger ones.

The elements referred to so far have their own political dimension: the contention that in the various operational theaters of the international "big chessboard" involves, more or less directly, powers of every order and degree, it does not only call into question the comparison between the respective devices military but also between companies, or more precisely between entire industrial supply chains, competitors. Even in the era of the so-called "4.0 industry", of the digitization of the Armed Forces and of the battlefields, there cannot be an effective Defense without an efficient productive apparatus that supports it.

Seen through the lens of international relations, the industrial development of the South of the United States from the second post-war period to today has acted as a factor in contrasting the decades-long manufacturing weakening of the first world power. The expansion of the internal continental market linked to the growth rates of the South and the West, has attenuated the political reflexes and expanded the times of the erosion of the American economic primacy due to the relative decline of the weight of the USA in the global economy, but of for itself it could not reverse its declining historical tendency determined by the rise of other great powers.

The management of the repercussions of this process on the international leadership of the United States - whose relaunch Donald Trump has made a flag in the electoral campaign with the slogan Make America Great Again - it has long been the main challenge for the various US administrations, and this will also remain for the presidential mandate that will start from the next 20 in January, regardless of the character traits (which in any case must be taken into account because they will inevitably play some role ), of the new tenant of the White House.

(photo: US DoD / Cowtown Rodeo / web / NASA / Dassaul Aviation / UCLA / Boeing / Twitter)