“Every aircraft in the world has tech made in Germany”
German aerospace OEMs hold a key technological and economic position, says BDLI President Klaus Richter.
Dr. Richter, the German aerospace industry currently employs some 110,000 people. The German automotive industry, by contrast, employs 820,000 people. What makes you say that aerospace is a key industry for Germany and for Europe?
Dr. Klaus Richter: Everybody thinks of Germany as a country that makes cars, not aircraft. But while seven percent of all cars worldwide come from Germany, fully 17 percent of the world’s aircraft are made here. The reason for this success is our innovative power: the aerospace industry invests a tenth of its revenue in R&D-almost twice as much as other sectors do. And the spillover effects are substantial. Whether it’s the autopilot or lightweight construction in the automotive industry, the anti-lock braking system or shark-skin surfaces for wind turbines, numerous technological innovations originate in the aerospace sector. Other industries and the country as a whole benefit from the pioneering advances made in this field.
What’s your assessment of the German aviation industry’s position in the world market, and in the global value chain of aircraft construction?
Richter: Every aircraft in the world contains technology made in Germany. Today, one out of every six passenger airplanes delivered to airlines around the globe is manufactured in Germany, totaling some 300 each year! The German supplier industry is a major part of the ramp-up that’s currently underway. I’m especially pleased to see that SMEs-our hidden champions-are acquiring more and more stakes in programs on the global market. Aviation is an international growth market, forecast to expand at an outstanding five percent annually. We’re expecting contracts for more than 30,000 widebody aircraft over the next two decades, adding up to an impressive five trillion U.S. dollars. Right now we have to pour all our efforts into ensuring that our aircraft remain the world’s best and most efficient for the next five, ten and twenty years, as that’s the only way to achieve success on the global market.
Alongside the big players-Airbus, MTU Aero Engines, Lufthansa Technik and Rolls-Royce Deutschland-there are a whole host of SME suppliers in Germany’s aviation industry. What challenges are there for this national supply chain?
Richter: The supplier business is seeing strong growth and can benefit from the ramp-up in production and the increase in global air traffic. There are of course challenges, too. Suppliers should work more closely together, branch out internationally and improve their operational performance by adopting new technologies and digitalization. To provide them with optimum support, BDLI has joined with regional associations and the industry organization SPACE Germany in launching the Supply Chain Excellence Initiative. Its goal is to make suppliers fit for the future.
Technological progress is one thing, but stable and reliable aircraft production is another. There is a wide range of relationships and interdependencies among OEMs and suppliers. How resilient is this network?
Richter: Global air traffic doubles every fifteen years, and the resulting demand is a challenge for the production capacity of the entire industry, no question. However, when the OEMs have full order books, this lends suppliers a certain degree of security as they plan for the next few years, while also strengthening the OEM-supplier network. In addition, as many SME suppliers become more international, they spread their capacity across a broader base and can thus improve their competitiveness.
What needs to be done to ensure that the supply chain for aircraft manufacturing continues to work in the future?
Richter: To keep from risking our competitive position, Germany, which is a high-wage country, must avoid putting further strain on the industry. Since we produce primarily for export-our industry has an export rate of more than 70 percent-such burdens hit us harder than other industries where Germany has a large domestic market. And naturally, we have to ensure that we have skilled staff and competitive working conditions.
Dr. Klaus RichterPresident of the German Aerospace Industries Association (BDLI)
Dr. Klaus Richter became BDLI President in 2017. Since January 2015, he has served as Chief Procurement Officer and an executive committee member of Airbus Group SE. He is also the Chairman of the Board of Airbus in Germany and heads the Supervisory Board of Premium AEROTEC Group.
Richter’s responsibilities cover procurement across the entire Airbus Commercial Aircraft organization as well as strategic procurement topics for the Group. Before joining Airbus in 2007, Richter was Senior Vice President Materials Purchasing for BMW.
Born in Munich in 1964, he began his career at McKinsey & Company in 1993 as a management consultant for automotive, electronics and aviation businesses and product development. He earned his doctorate in mechanical engineering from the Technical University of Munich in 1991, and after that spent two years as a researcher and teacher at the University of California at Berkeley.
Every value chain starts off with good ideas. Who drives their development forward? The OEMs? The customers? Start-ups, research institutions?
Richter: All of us together! Our motto is “nonstop innovation.“ The aviation research program in particular takes on a key role here, bringing science and industry together. OEMs today are no longer aircraft manufacturers in the traditional sense; instead, they’re more like system architects and integrators within the value chain. Yet this is just one aspect of innovative change. Airbus, for example, acquires and integrates start-ups, but also works on revolutionary concepts itself, such as at the Center of Applied Aeronautical Research (ZAL) in Hamburg. Industry 4.0 is one of the most interesting topics for aviation. For our complex products, digital solutions that cover the entire life cycle from development to operations offer enormous potential. This is why Germany needs to be a driver of digitalization and not merely an observer.
You yourself used to work in the automotive industry. What can aircraft manufacturers learn from automakers?
Richter: We can learn a lot from each other. An aircraft is much more complex than a car: while a car contains up to 15,000 individual parts, a widebody aircraft has several million. On the other hand, the batch sizes in the automotive industry are much larger. That’s why we can learn a lot from automotive, especially when it comes to industrial-scale production. A car today features complex software and connected systems, just as an airliner does. What both industries have in common is that they produce incredibly complex products with a huge proportion of electronics, and both have the strictest requirements regarding functional safety. In up to 70 percent of all innovations, electrics and electronics are the most important drivers.
Give us a glimpse of what’s down the road: what new developments can we expect from aerospace over the next few decades?
Richter: Aerospace conducts research more intensively than any other industry. Right now we’re working on flight that is virtually emissions-free. Electric drives already work well enough for smaller aircraft, and we are aiming towards launching hybrids with up to 100 seats by 2030. The second major breakthrough is autonomous flight, whether with cargo drones or air taxis. The aerospace industry drives technology forward; after all, requirements are nowhere so stringent as in the air and in space.