Engineering news
GKN has admitted mistakes in the implementation of its strategy in China, after failing to progress a joint venture with the Shanghai Aircraft Manufacturing Company (SAMC).
GKN had announced a memorandum of understanding with SAMC at the end of 2012 to cover the manufacturing development for structures for the Comac 919 twin-turbofan, narrowbody aircraft.
SAMC has bold ambitions in the civil airliner sector, and has long been touted as an eventual rival to Airbus and Boeing. The collaboration was expected to see GKN manufacture and assemble the horizontal tail for the C919, using advanced composite processes.
But Marcus Bryson, chief executive of GKN Aerospace and Land Systems, said that after many months of many months of discussions with SAMC, the deal had fallen through due to a disparity of views around technical solutions and commercial terms.
He said: “We are still looking at China. We are still having discussions with people out there.”
Alluding to the SAMC talks, he added: “Maybe that was wrong route into that market. It didn't fit. It wasn't correct. Maybe it was too big, too soon.”
GKN Aerospace chief executive Marcus Bryson
Bryson said that China remained a strategic market. “We want to be a player out there. It is a growth market. China will have an indigenous aerospace industry and we very much want to be a part of it.”
One means of expanding in China might be through acquisition rather than joint venture. But Bryson said any deal would have to meet certain criteria.
“We want to grow organically and through acquisition. But if you look at our history of acquisition, it is not just about the top line. Deals are only done when a company brings us technology or a market presence that we didn't previously have.”
Bryson said turnover and profit at GKN Aerospace were both on the up off the back of a “super-cycle” in the commercial aerospace market. He said that order visibility from key customers such as Airbus and Boeing meant another 8 to 10 years of decent growth in the pipeline. Bryson said trading conditions in the civil aerospace sector were unprecedented: “I have never seen anything like it,” he said.