Japan quake hasn't yet affected U.S. aviation

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April 10--Wichita planemakers say the devastation from Japan's earthquake and tsunami hasn't impacted supplies of aircraft parts and components -- at least not yet.

"We just don't know," Teal Group analyst Richard Aboulafia said of whether the industry will feel the hurt. "Historically, Japanese industry bounces back pretty fast. The problem is, of course, it's a global supply chain, and you're only as strong as your weakest link."

Another aviation analyst, Loren Thompson of the Lexington Institute, said it is inevitable that aviation manufacturers will face consequences from the problems in Japan.

"Of course there's going to be an impact because the United States has gradually offshored many industrial parts that once were produced domestically," Thompson said.

So far, most of Wichita's are unaffected.

Cessna Aircraft has had no disruptions in the supply chain, "but it is still too early to tell for sure," said spokesman Bob Stangarone. "As you go further down the supply chain, we may experience difficulty."

Suppliers are making provisions and doing "workarounds," Stangarone said, "so that they continue to provide the parts... we need."

One of Cessna's component suppliers, for example, operates three plants in Japan. Two were damaged and won't be back online until fall, Stangarone said.

"But they are finding capacity elsewhere for 60 percent of that production, and they are still working on temporary solutions for the other 40 percent," he said.

Spirit AeroSystems is monitoring the situation closely, said spokesman Ken Evans.

It has employees in Japan, some of whom are stationed at suppliers' operations. Their safety and well-being is the primary concern, Evans said.

"We have experienced no delays or other impact to our business," Evans said. "Our supply base in Japan continues to operate with minimal or no disruption, and we will continue to monitor."

Spirit's Tulsa plant builds the leading edge of Boeing's 787 wing and ships it to Mitsubishi Heavy Industries, which builds the wing. Those shipments are proceeding on schedule, he said.

In the meantime, the company is monitoring potential issues in Japan such as rolling blackouts, access to power and raw materials, Evans said.

Japanese airframe manufacturers -- which include Mitsubishi, Fuji Heavy Industries and Kawasaki Heavy Industries -- build 35 percent of Boeing's 787 structure. Mitsubishi also builds portions of the Boeing 737, 767, 747 and 777.

"We have not seen any impact to our production system," said Larry Wilson, Boeing spokesman for supplier management. "There are areas of risk within the supply chain that we've identified."

Right now, there's no risk involving Mitsubishi, Kawasaki or Fuji, he said.

Instead, the risk involves "sub-tier" suppliers, companies that supply Boeing's major suppliers.

"We've gotten it down to just a few," Wilson said. "But we're still working our way through those."

Boeing should know in about a month whether there will be an effect, and if so, its extent, Wilson said.

Hawker Beechcraft isn't expecting an effect.

The company receives two major assemblies from Japan -- the wing of its Hawker 4000 comes from Fuji Heavy Industries and a flight control surface for the Premier business jet comes from another Japanese supplier.

"Those suppliers were not directly in the affected area," said Scott Shepherd, Hawker Beechcraft vice president of integrated supply chain.

Hawker Beechcraft is tracking the situation carefully and is in ongoing contact with suppliers.

"We've had those discussions, and for us, we don't expect any issues further down the value stream... at this point," Shepherd said.

Lack of preparedness

The earthquake and its aftermath underscore a broader issue the U.S. must face in regard to outsourcing, said Thompson, the analyst: The U.S. is ill-prepared for a major disruption.