October 2013 Industry Overview
October 2013
Industry Overview
Growth
Globalization
Supply Chain Transformation
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Global Aerospace - Trends
Air travel remains a robust growth market
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Do You Believe In Super Cycles?History And OEM Plans For Large Jet Transport Deliveries By Value
'59 '63 '67 '71 '75 '79 '83 '87 '91 '95 '99 '03 '07 '11'13'15'17'19'21$0
$50
$100
$150
$200
(Value in '13 $ Bns)
History OEM Plans Repeat of last ten years Teal Forecast
With OEM plans:‘03-‘14 9.6% CAGR, 175.1% Growth;‘11-‘14 16.4% CAGR
DRAFT 1 5
Fewer, but still many direct
partnersLimited role for “integrators”
Many direct partnersNo real role for “integrators”
Build to print for parts and sub-
assemblies
Fewer large partners sharing the risk, strategy and
opportunitiesExtensive integrators role
Global extended enterpriseEach tier has more opportunity
Raw Materials
Make-to-print Parts and Assemblies
Large-scale Integration
Platform Assembly
Value-added Parts and Assemblies
TIER 1RSP
Airbus Airbus
(50% of an aircraft cost)
Airbus (80% of an aircraft cost)
Past Today The New Airbus
Airbus sourcing principles: enhanced responsibilities
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Aircraft Manufacturing Transforming the Supply Chain
TIER 1(OEM)
One to Many
TIER 1(OEM)
TIER 2(SystemsIntegrator)
TIER 2(SystemsIntegrator)
TIER 2(SystemsIntegrator)
TIER 3(Product)
TIER 3(Product)
TIER 3(Product)
TIER 3(Product)
TIER 3(Product)
Tier 4BTP / Services
One to Few
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Ontario Aerospace, Space, Defence, UAV & MRO Sector
An Overview
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2nd largest in Canada Aircraft Systems & Equipment Space Systems & Equipment Aerostructures Aircraft Integration Defence MRO
22,000 people most are technicians, engineers, scientists
$7 billion in revenues ~ 80% exports ~ 80% commercial
Ontario’s Aerospace Industry
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Ontario’s strengths
◦Integrated Systems and Equipment Aircraft & Space
◦Aircraft Structural Assemblies
◦Aircraft Integration A wide range of aerospace / aviation design,
manufacturing, and product support capabilities
In the heart of Canada’s strongest and most diverse technology-based industrial and commercial business community
Ontario’s Aerospace IndustryA growing, global competitor
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• A technology-intensive, diversified cluster
• Focused on Systems & Equipment, Aerostructures and Aircraft Integration
• Rich and diverse industry / technology capabilities
• Strong supporting business / commercial infrastructure
• High calibre technical & business people
• Superior R&TD support
• Globally competitive
Ontario Aerospace Industry
Ontario is the place to go for aerospace innovation and engineering excellence
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A Proud History of Innovation & Technology Leadership
Valued Partner in our Communities
Strong Contributor to our Economy
Ontario Aviation / Aerospace
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A Proud History of “Firsts”
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“Silver Dart” – first powered flight in Canada - piloted by Toronto-born J.A.D. McCurdy. 1909
Curtiss JN-4 Canuck - first airplane manufactured in Canada. Over 1,200 built. Toronto 1917 - 18
World's first variable pitch propeller flight tested. Flight safety and economy greatly improved. 1927
World's first anti-gravity suit tested at Camp Borden. Developed at University of Toronto. 1940
de Havilland Beaver – World’s first successful short takeoff & landing airplane. Toronto 1947
Avro C-102 Jetliner – First commercial jet transport to fly in Western hemisphere. Malton 1949
CF-100 fighter – First front line fighter designed & built in Canada. Toronto 1950
A Proud History of “Firsts”
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Orenda Engine - Canada's first turbojet engine. Most powerful engine of its time. Toronto 1950
de Havilland Otter – Opening Canada’s north to commerce and industry. Toronto 1951
Avro Arrow CF-105, supersonic, all-weather fighter plane, first flight. Considered most advanced jet interceptor in the world. Toronto 1958
World's first emergency locator device built. Required today on all civil aircraft. Ottawa 1959
Canadarm - world's first remote manipulator for space. Ottawa and Toronto 1972
First elements of the Space Station Remote Manipulator System launched to begin assembly of the International Space Station, with Canadian Astronaut Chris Hadfield. 1999
A Proud History of “Firsts”
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Regional Aircraft (RJ Family, Q Series) Bombardier
Business Aircraft (Global Series) Bombardier
Commercial Helicopters Bell Helicopter, Eurocopter
Light Aircraft (Flight Training) Diamond
Special Purpose Aircraft Bombardier, Field, Found
Small and Medium Turbine Engines Pratt & Whitney Canada
Aerostructures Arnprior Aerospace, Avcorp, Boeing, Magellan, IMP
Landing Gear Systems UTAS Landing Gear, Messier-Bugatti-Dowty, Heroux-Devtek
Aircraft Environmental Systems Honeywell
World Leaders in Selected Niche Markets
Located in Ontario
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Electric Power Systems Honeywell
Aircraft Satcom Systems CMC, Honeywell Ottawa
Air Traffic Control/Management Systems Raytheon
Conversion / Upgrade / Retrofit Field, Cascade, Kelowna
Integrated Space Robotics Systems MDA
Satellite Multiplexers and Switches ComDev
Satellite-aided SAR Systems Honeywell Ottawa
World Leaders in Selected Niche Markets
Located in Ontario
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When you fly Porter Airlines, your quiet, comfortable, fast and reliable trip is on a Bombardier Q400 aircraft designed and made in Downsview.
Ontario aerospace industry’s successes
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Global business jets are the world’s most preferred long-range, luxury business aircraft - made in Downsview.
Ontario aerospace industry’s successes
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When you are flying on a Boeing jetliner at 35,000 feet, the warm, clean air you breathe is thanks to Honeywell engineers in Mississauga.
Ontario aerospace industry’s successes
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When you take off and land on a large airliner, 4 times in 10 it’s on landing gear made by Goodrich Landing Gear in Oakville or Messier-Dowty in Ajax.
Ontario aerospace industry’s successes
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When you see the Canadarm robotic arm enabling astronauts to repair critical equipment on the outside of the Space Station, that’s done with space robotics technology developed by engineers at MDA in Brampton.
Ontario aerospace industry’s successes
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Cluster Tier 1 Tier 2 Tier 3 Tier 4 Employees
Aerostructures 2 13 42 29 12,400
Landing Gear and Flight Control Actuation
4 13 19 18 9,000
Avionics & Flight Management
2 24 12 3 5,500
Turbine Engines 1 6 17 12 2,900
Environmental Conditioning & Electric Power
2 2 3 2 1,900
MRO 7 10 11 2 7,200
Ontario Aerospace Clusters
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Ontario Aerospace Industry Structure
Empl
oyee
s
Com
pani
es
Empl
oyee
s
Com
pani
es
Empl
oyee
s
Com
pani
es
Empl
oyee
s
Com
pani
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Empl
oyee
s
Com
pani
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Empl
oyee
s
Com
pani
es
Aerostructures, Assemblies and Components 550 2 75 1 7,326 12 2,953 44 1,226 31 569 14 12,699
Landing Gear Systems & Flight Controls 2,250 6 1,249 5 1,053 7 2,584 27 571 18 300 10 8,007
Engines and Engine Components 700 1 1,080 8 72 2 1,287 26 524 12 30 2 3,693
Avionics Systems, Equipment 470 2 3,761 24 175 2 1,286 14 88 3 723 10 6,503
Environmental Control Systems & Electric Power Systems 1,152 2 213 3 1,230 2 474 5 30 1 245 2 3,344
Totals 5,122 13 6,378 41 9,856 25 8,584 116 2,439 65 1,867 38 34,246
% 15.0% 4.4% 18.6% 13.8% 28.8% 8.4% 25.1% 38.9% 7.1% 21.8% 5.5% 12.8% 100.0%
Ontario Aerospace Key Clusters
TOTALTier 2BTier 1 Tier 2A Tier 3 Tier 4 Enablers
Empl
oyee
s
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Ontario Aerospace Industry Structure
15%
19%
29%
25%
7%
5%
Employment by Tier Level
Tier 1Tier 2ATier 2BTier 3Tier 4 Enablers
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Ontario’s strengths
◦Integrated Systems and Equipment Aircraft & Space
◦Aircraft Structural Assemblies
◦Aircraft Integration A wide range of aerospace / aviation design,
manufacturing, and product support capabilities
In the heart of Canada’s strongest and most diverse technology-based industrial and commercial business community
Ontario’s Aerospace IndustryA growing, global competitor
Ontario Aerospace Growth Strategy
Enhanced Knowledge
& Skills
ESPRIT Global Supply
Clusters Accelerator
Ontario Aerospace
R&TD Challenge Fund
Market Outreach
IRBs IRBs
IRBs
Drivers
Enablers
Public Procurement
IRBs
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Market Outreach Access to current and emerging markets Priorities
Ontario Aerospace R&TD Challenge Fund OAC + OCE + NSERC Funding to support initial projects totalling $2.5M
Enhanced Knowledge and Skills Transform how we select and develop our people Transform how we work with our educational
partners
OAC Strategic Initiatives
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ESPRIT Ontario Aerospace Global Clusters Accelerator◦ Key Clusters – Landing Gear, Aerostructures, Avionics, etc.
Suppliers – grow our SMEs, higher value Systems Integrators and OEMs – more, growing Supply Network Systems – globally leading performance
OAC Ontario Cluster Leadership Organizing collaborative Working Groups, Teams, etc. Delivering agreed programs and projects
OAC Strategic Initiatives (cont’d)
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ESPRIT Supply Clusters Accelerator
Enhanced Knowledge
& Skills
Advanced Manufacturing
Systems
Design Engineering Capabilities
SME Supplier Advancement
Technology Development
Supply Cluster Performance
Market Opportunities
IRBs IRBs
IRBs
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220 Member Companies 200 Industry Members+ Associate members 20 Affiliate members
Established in 1993
Leadership by Board of Directors
OAC Core Purpose To be the voice of the Ontario aerospace industry To increase Ontario’s share of the global aerospace
market
OAC
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Todd YoungV.P. Customer Services & SupportBombardier Commercial Aircraft
Jim ButyniecPresident & CEOMagellan Aerospace Ltd.
Dan BreitmanV.P., New Product IntroductionPratt & Whitney Canada
Pierre DelestradePresidentEADS Canada Inc.
Jean-Michel ComtoisV.P. Marketing & SalesEsterline CMC Electronics
Romain TrappPresident & CEOEurocopter Canada Ltd.
Frank KarakasVice President, Airbus & BombardierGoodrich Landing Gear
Patrick DrohanSite Leader – Aerospace, AvionicsHoneywell Canada
Brad BournePresident & CEOFiran Technology Group
OAC Board of DirectorsBrian TeedPresidentMessier-Bugatti-Dowty Inc.
Linda RenePresident & CEOSafran Electronics Canada Inc.
Tom MelvinVice President, OperationsArnprior Aerospace
Larry FitzgeraldVice President & General ManagerCentra Industries Inc.
Eli BriglerPresidentCFN Precision Ltd.
Andrew SochajPresidentCyclone Manufacturing Ltd.
Ernie LynchPresidentLynch Dynamics
Val WilsonVice PresidentDishon Limited
George KoulakianVice PresidentKK Precision
Brad HartDivision ManagerMetal Improvement Company Inc.
Ted SquiresPresidentTFI Aerospace Corporation
Tony BurgessPresidentTDM Technical Services
Joseph YeremianPresidentThermodyne Engineering
SUSTAINING MEMBER
Tony LaMantiaAssistant Deputy Minister, Investment & Industry Division, Ontario Ministry of Economic Development, Trade & Employment
EX OFFICIO MEMBERS
André BernierSenior Director, Aerospace Aerospace, Defence and Marine BranchIndustry Canada
Rod Jones Executive Director, OAC