Drastic cutbacks in defense spending due to the end of the cold war are painfully affecting many U.S. and Japanese aerospace companies. According to MITI (Ministry of International Trade and Industry), reliance on defense spending is much greater for the Japanese aerospace industry (75% military), than it is in the U.S. aerospace industry (56% military). This situation has been further aggravated by the deep and long recession in the United States, Japan, and other parts of the world. This economic recession is causing an unprecedented slump for the world airline industry, which has resulted in a record loss of $5 billion in 1992. However, a favorable long term outlook for the commercial aircraft business has offered a glimmer of hope to an otherwise gloomy picture for the aerospace industry. The increase in world demand for commercial aircraft is a direct result of economic globalization and the increased reliance on air travel. Historically, the increase in world demand for commercial aircraft has been shown to match essentially the increase in GDP (gross domestic product) for the world; this means that an increase of 5 to 6 percent per year can be expected until the year 2010. Demand will be further enhanced by the problem of aging aircraft and the need to replace old airplanes. A market for 12,000 new aircraft worth $900 billion by the year 2010 has been predicted (Fig. 2.1). One third of the total number of new aircraft are to replace aging aircraft. Over the years, there have been many ups and downs in the demand for new aircraft, but the general trend has been upward. Fortunately, the upward trend is expected to continue. Composites usage in future aircraft will also continue to move upward. However, unlike in military aircraft, the problem of cost, particularly manufacturing cost, must be overcome. The technology already exists to incorporate small composite primary structures (e.g., horizontal and vertical stabilizers) into large commercial transport, but it does not yet exist for the incorporation of major composite primary structures such as wings and fuselages. The current drive is to develop the technology necessary to incorporate composites wings and fuselages into large commercial transport by the end of this century. For this to happen, it is essential that the cost of composite wings and fuselages be low enough to be an attractive option. This means that manufacturing cost as well as direct operating cost (DOC) must be equal to or less than that of metal primary structures. Unlike in military aircraft applications, it is acceptable to sacrifice a certain amount of performance in order to gain respectable cost savings. Although the development of a high speed commercial transport is still at an early stage, demand for low cost manufacturing will remain the same. Future competition will not be as much for improved performance as for reduced cost in materials and manufacturing.
Figure 2.1. Commercial Aircraft Demand by the Year 2010
Improved performance for military aircraft is still a high priority. However, the extremely high cost of today's military aircraft cannot be tolerated even by the military. The U.S. government is likely to continue eliminating or reducing the scope of its expensive aircraft programs. A few good examples are the A-12, B-1, B-2, ATF, and C-17 programs. The Japanese military programs cannot escape similar treatment from the Japanese government. The U.S. military agencies (USAF and Navy alike) as well as the Japanese Defense Agency (JDA), are now under pressure to reduce costs the same way the commercial aircraft builders do. It is not too difficult to see that future major military aircraft programs will be few and far between. Consequently, the pressure is on the defense contractors to find commercial programs to compensate for the potential loss in military work. This means military contractors must now compete directly with Boeing and Douglas in the United States, and with foreign commercial aircraft manufacturers globally. Competing for more commercial work is particularly severe for the Japanese aircraft industry because of its very high reliance on its military budget (see Table 2.1).
To fully understand how composites technology stands within the Japanese aerospace industry, it is important first to understand the Japanese aerospace industry itself. The Japanese aerospace industry is relatively small compared to that of the U.S. and other industrial nations. It is only one-tenth the size of the U.S. aerospace industry, one-third the size of those of the U.K. and France, and about the same size as that of Canada. The export/import ratios for aerospace-related products of the major industrial nations are given in Table 2.2.
Japanese Military/Civil Demand
Export/Import Ratios for Aerospace Related Products
The U.S. is the largest exporter and Japan is the largest importer (mostly from the U.S.) of aerospace related products. Although small, the Japanese aerospace industry has received acclaim for its advanced production technology, reliable delivery, and high quality. Its composite parts and components have also received similar acclaim.
The Japanese aerospace industry is unique in the sense that its aerospace-related sales account for only 20 percent of the total sales of the four major aerospace- related heavy industry companies. Sales percentages for a typical Japanese heavy industry company are shown in Figure 2.2. Diversification is the norm for the heavy industry companies, and it is rooted in the historical development of these heavy industries in general, and the Japanese aircraft industry in particular.
Figure 2.2. Typical Japanese "Heavy Industries" Company
U.S. companies are now racing to shift from military to commercial applications, with an emphasis on cost-cutting. This shift was started by NASA several years ago when it sponsored the ACT (Advanced Composites Technology) program. As expected, Boeing and Douglas (the only major commercial aircraft builders in the United States) received the largest share of the funding. The underlying theme of the ACT program is low cost technology and affordability.