-Airbus presses A320 suppliers for 10 pct price cut-sources - RTRS
25-SEP-2015 16:02:35
By Tim Hepher
PARIS, Sept 25 (Reuters) - European planemaker Airbus AIR.PA is pressing suppliers on its A320 jet programme to slash prices by at least 10 percent by 2019 in order to make the company's main cash cow more competitive, three people familiar with the matter said.
The enhanced efficiency plans echo rival Boeing's BA.N cost-cutting Partner for Success initiative, which has redrawn the relationship between suppliers and the world's biggest planemaker as the industry gears up for record output.
Airbus' cuts are just one part of an internal efficiency programme called SCOPe+ that also seeks savings through a close look at procurement, and the way planes are developed and sold.
Airbus has told suppliers that the prospect of increased volumes and a longer lifespan for its best-selling jet, which has enjoyed a surge in sales due to an important makeover, means it is time to "review all options" in its supply chain.
This includes a fresh look at the company's procurement strategy, that could include extra use of twin sourcing for crucial parts, a strategy designed both to reduce costs and to reduce the risks of shortfalls as production increases.
Airbus is also looking at further shifting its business model to allow airlines less choice over accessories that they previously ordered direct, known as Buyer Furnished Equipment.
Also involved is a longer-term effort to weave manufacturing costs into the design process to prevent unintended overruns in costs on the factory floor, a tool known as "Redesign to Cost".
SCOPe+ aims to achieve a new baseline for supplier costs in 2019 that is "at least 10 percent" lower compared with 2015, according to suppliers and an Airbus document seen by Reuters.
Though Airbus has confirmed the existence of the SCOPe+ initiative, its details have not been publicly disclosed.
The initiative "is part of Airbus’ long-term commitment towards boosting competitiveness through operational efficiency and continuous improvement," a spokeswoman said.