Supplier Base 'Shifting' for Landing-Gear Maker.

In today's competitive defense and aerospace markets, companies must learn not only how to integrate new technologies into their operations but also how to manage global networks of subcontractors, said industry executives.

A case in point is the landing-gear business, which currently is dominated by two large prime contractors, Messier-Dowty, headquartered in France, and U.S.-based Goodrich Corp.

As the landing-gear industry consolidated during the 1990s, companies such as MessierDowty have been constantly re-evaluating how much equipment they want to manufacture inhouse and how much they want to outsource to subcontractors, said Francois Roudier, the company's director of communications.

Make-or-buy decisions often are tied to the state of the economy, Roudier said. "If we went into an economic recession, we would manufacture more. If business is good, we outsource more."

Make-or-buy polices, he said, are reviewed "on an ongoing basis."

Messier-Dowty has sales of $540 million-in both the commercial and military sectors-and employs 2,900 employees in France, the United Kingdom, Canada and Singapore. The company has a small (30 employees) facility in Seattle. Its corporate owner is the Snecma Group, a $6 billion aerospace industrial conglomerate.

The company anxiously awaits the selection of a prime contractor for the U.S. Joint Strike Fighter. Messier-Dowty is on Boeing's team, which is competing against a team led by Lockheed Martin. Lockheed selected Goodrich as the landing-gear supplier. A Boeing win in the JSF program obviously would be a boon for Messier-Dowty, which currently makes the nose landing gear for other major fighter aircraft, such as the U.S. Navy's F/A-18E/F and France's Rafale. It also provides the main landing gear for the Eurofighter EF2000.

Simon Luxmoore, Messier-Dowty's group vice president for Boeing and military programs, said the JSF program has proved that global industry teams can work together effectively. The company has set up "strategic alliances" with 25 firms worldwide, in order to penetrate new markets, Luxmoore said in an interview at the 2001 Paris Air Show.

According to Roudier, there has been an "evolution" in the industry. Instead of expanding manufacturing capabilities, companies are working to "integrate new ideas and master subcontractors."

Outsourcing work to smaller suppliers proved to be a successful strategy at Messier-Dowty, which currently buys 65-70 percent of the components used in its landing gear, Roudier said.

The geographical make-up of the supplier base has shifted in recent years, he explained. In the mid-1990s, it was dominated by North American suppliers. "Today, we are looking to the Far East and Eastern European (former Soviet block) countries," Roudier said. MessierDowty increasingly has outsourced more work to subcontractors in Singapore, South Korea, Poland and the Czech Republic, among others.

Over time, large aerospace suppliers such as Messier-Dowty and Goodrich will want to be less focused on manufacturing and more involved in design and engineering, he said. The smaller companies in Asia and Eastern Europe, meanwhile, "are not interested in design, but they want to work with us!'

There are plans for new joint ventures in Singapore and in China to co-produce parts with local firms, Roudier said.

'We have the design-engineering expertise," Luxmoore said. "Other partners may be selected to manufacture the equipment Others have more suitable machine tools for small gear. Our core competency is machining large components."

During the air show, Messier-Dowty announced that it had received approximately $3 million from a European consortium to design low-noise landing gear.

This consortium, called Silencer, is working to improve the environmental friendliness of commercial aircraft, especially external noise generated by the engines and the airframe components such as the undercarriage.