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No.1 for Aerospace JobsA report to Lancashire County Council by The North West Aerospace Alliance, May 2017

Proprietary Information Notice

This document contains confidential and proprietary information of the North West Aerospace Alliance and must not be used for any purpose other than for which it is

supplied. It must not be copied or disclosed, wholly or in part, by any person without the prior written authority of the North West Aerospace Alliance.

© Copyright North West Aerospace Alliance, July 2013

Image © AIRBUS

Acknowledgements & References

[1] UK Aerospace Outlook 2016, ADS[2] From Discovery to Delivery, North West Business Leadership Team [3], [4], [5] ONS NOMIS data[6] Top 100 Aerospace & Defense Companies 2015 – Flight Global[7] Means of Ascent - The Aerospace Growth Partnership’s Industrial Strategy For UK Aerospace 2016

Images courtesy of BAE SYSTEMS, AIRBUS, Rolls-Royce, UK MOD and Museum of Science & Industry.

This report by the North West Aerospace Alliance (NWAA) analyses the Aerospace Sector in detail across the North West of England and Lancashire in particular.

This report is intended to highlight the contribution that Lancashire makes to the UK’s aerospace industry, which was first reported in July 2013. It now updates the position.

The research contained in this report is based on: a desk-based review of regional and national documents; NWAA membership data and knowledge of the supply chain; and consultation with key stakeholders.

The aerospace industry in the North West of England has developed through a century of progress.

Lancashire is central to one of the world’s top four centres of aerospace production ranking alongside Seattle (USA), Toulouse (France) and Montreal (Canada).

For example, Lancashire has been at the forefront of developments in the industry since the Blackpool “Flying Week” of 1909 and at the heart

of the capabilities of the North West of England.

In the North West, in 1910, A.V. Roe founded the world’s first factory for the production of aircraft in Manchester and in 2011 AIRBUS opened a new £400 Million facility at Broughton (just a stone’s throw from Cheshire) for the manufacture of carbon fibre wings for the new A350 airliner.

Today, Lancashire’s strengths include: the creation of the

Lancashire

Merseyside

Greater Manchester

Cheshire

Cumbria

Lancashire at the heart the North West of England’s five sub-regions of Lancashire, Cheshire, Cumbria, Greater Manchester and Liverpool is today home to nearly a fifth of the UK Aerospace Industry’s workforce.

most advanced engine and nacelle systems by Rolls Royce and Safran; the design and manufacture by BAE SYSTEMS of the rear fuselage for the F-35 Lightning II, the largest defence programme in the world; and leadership in the UK - French Unmanned Future Combat Air System (FCAS) demonstrator programme looking to programmes for 2030 and beyond: plus an extensive supply chain of specialist expertise.

Image © AIRBUS Image © MOSI

A number of global aerospace companies are located in Lancashire including BAE SYSTEMS, Rolls-Royce, Safran Nacelles, Paradigm Precision, Senior Aerospace, Magellan and Kaman.

These companies are supported by a network of suppliers with a broad range of capabilities including design, assembly, metallic and composite structures, engine components, special processes, robotics and automation.

These companies have a long pedigree within the industry and have contributed to the design and manufacture of over 150 different aircraft in this region. The region benefits from generational learning with knowledge and skills passed through families over many years.

Historically, many parts of the world have been capable of designing and building a whole aircraft. In recent years, countries and regions have collaborated on new aircraft programmes resulting in a

focus on specific parts of the aircraft in order to share risks. This has resulted in the loss of whole aircraft capability in many regions.

AIRBUS UK, for example, is focussed on wing design and manufacture, but has previously been capable of manufacturing whole aircraft e.g. Hawker 125 Executive Jet (Final Assembly Line shipped to Wichita, USA).

The capability that exists within BAE SYSTEMS at Warton and Samlesbury is unique in that the skills and resources are still in

Lancashire has the skills and resources to design and integrate a whole aircraft in one sub-region of the UK.

a whole aircraft in one sub-region of the UK. This has been illustrated by the successful creation of the UK Mantis and Taranis unmanned aircraft systems demonstrators over the last 8 years. This expertise is now being directed to the next generation of projects, including the UK-French Unmanned Future Combat Air System (FCAS) demonstrator programme.

Image © BAE Systems Image © AIRBUS

NWAA has contact information for over 375 organisations in the Lancashire region with an interest in the aerospace sector.

The current NWAA Membership is some 183 organisations with 53 companies having postcodes within the Lancashire region. Figure 1 (overleaf ) shows a schematic of the Aerospace Supply Chain for the North West of England with companies located in Lancashire highlighted in red. At the top of the supply chain, BAE SYSTEMS provides integration of the platform (aircraft, ship, submarine, land systems), whilst also supporting the product over the complete life cycle.

However, it can be seen that Lancashire makes a significant contribution to the whole supply chain through metal machining & composite manufacture of aircraft structural and engine

components in companies such as RLC Group, Senior Aerospace Weston, Magellan Aerospace (Blackpool) and Kaman. These are supported by companies such as A&G Precision, Addison, BCW, T&R Engineering and Velocity.

Furthermore, there is an associated process and treatment industry largely located in Lancashire comprising of companies such as Bodycote, Hycrome, Silverfield and Curtiss-Wright Surface Technologies.

There is clearly a core capability for Lancashire in Engine Sub-Systems with companies such as Rolls-Royce (Barnoldswick), Safran Nacelles (Burnley), MB Aerospace and Paradigm Precision (Burnley) providing complex integration of metallic and composite components into fan systems, nacelle systems and thrust reverser systems. Figure 1 (overleaf ) indicates

that there is a lesser presence of pure Avionics / Electrical Systems companies, although this experience does exist in other areas of the North West such as in Ferranti Technologies (Oldham), MBDA Missile Systems (Lostock) and APPH Landing Gear Systems (Runcorn). It should also be remembered that there is world-class avionics and electrical systems integration capability within BAE SYSTEMS itself.

The North West of England and Lancashire in particular is home to one of the most extensive supply chains in the UK.

Structures Power

Avionics/Electrical/Mechanical Systems

MRO

Platform Integrators Operators

Tier 2 Metal Structures

Machining & Specialists Treatments

MaterialsTier 2 Composite Structures Manufacturing Systems

Design & Engineering

Academia

Com

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Inte

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Infra

stru

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eNorth West Aerospace Alliance Strategic Industry Map

AirbusBombardierGKNSpiritLeonardo Helicopters

TriumphFerranti Technologies, ElbitOxley DevelopmentsMBDA Missile SystemsRaytheon SystemsDenis Ferranti MetersAPPH

UTASRockwell CollinsSafran Landing SystemsThalesGELeonardo A&SS

Rolls RoyceParadigm PrecisionSafran NacellesGeneral ElectricP&WUTC Aerospace Systems

Hyde GroupMagellanRLCSeniorParadigm Precision

Kaman CompositesTeledyne CMLVelocityHyde GroupAttwater

BAE SystemsBombardierAirbusBoeingEmbraer

LeonardoHondaMitsubishiCOMACUAC

British AirwaysThomas CookTUIeasyJetRyanairLufthansaVirgin Atlantic

UK MoD/RAFOverseas Air Forces

BAE SystemsThomas CookEuraviaRaytheon SystemsAir LiveryRolls Royce

Marshall Aerospace & Defence GroupLufthansaBritish AirwaysFlybeBabcock Defence Systems

Company

Thyssen KruppCytecNeo NickelSigmatexAmariAlcoaCastle Metals

ElectroimpactHyde Group

LancasterEdge HillManchesterLiverpoolCumbriaSalford

Company X

StockistsWincantonFlexMB AerospaceWescoUmeco/Pattonair

A&G PrecisionELE TechnologiesAddisonMagellanPDSPenninePrecision PartsSilcomsT&R Precision EngineeringRegal

Key:Companies in black type have a presence in or near the region. Companies in grey type are examples of companies outside the region which may be targets for future business partnerships or inward investmentCompanies with a red diamond have facilities in Lancashire.

BodycoteHycromeKilgourKing & FowlerSilverfieldWallwork

AssystemMorson ProjectsHyde Group

SafranAveva

UClanAMRC

Figure 1

The range of capabilities in the region include, Design Engineering, Avionics, Raw Material Supply, Carbon Composite Material & Component Manufacture, Metal Machining & Fabrication, Superplastic Forming and Diffusion Bonding, Electron Beam Welding and Plasma Coating technologies.

Many of these key capabilities are provided in the region by the companies detailed on the following pages.

With two Lancashire based sites at Samlesbury and Warton, BAE SYSTEMS Military Air and Information is a major employer and economic driver in the region, with some 11,000 on-site workers.

The North West of England and Lancashire in particular is home to some of the most diverse and capable Aerospace & Advanced Manufacturing companies in the UK.

The company possesses expertise to design and build fixed wing military aircraft and training aircraft, as well as provide training, support and information services. It uses the sophisticated manufacturing processes of Super Plastic Forming & Diffusion Bonding, Carbon Composite manufacture and world class Multi Axis Machining to produce components for some of the world’s leading combat aircraft notably Eurofighter Typhoon and Lockheed Martin’s F-35 Lightning II.

The Samlesbury site is the sole manufacturer of the Typhoon Front Fuselage within a multi Government collaboration integrating a range of parts from a global supply chain to produce a fully functional front Fuselage (Cockpit).

Samlesbury is also responsible for the supply of systems and significant machined Rear Fuselage and Empennage components on the F-35 Lightning II that also includes key suppliers within the region.

The Warton site is the home of the final assembly line for Eurofighter Typhoon where all the major components provided by the consortium are marshalled prior to Assembly into a fully combat ready aircraft.

The world’s second largest aeroengine manufacturer Rolls Royce has operated a site at Barnoldswick since the mid 1940’s.

Super plastic forming, Diffusion Bonding, Ultrasonic inspection, 3D Moment Weighing and Multi Axis complex machining of Titanium materials are used to manufacture Wide Chord Fan Blades for both Civil and Military applications.

Other core competencies, including Electron Beam Welding, are used to manufacture complex fabricated and Machined Front and Tail Bearing housings for the companies Civil, Marine and Industrial applications.

Rolls-Royce has invested more than £100m in the Barnoldswick site over the last three years as it modernises its facilities and increases production of engines for widebody passenger aircraft. The site employs around 1,000 people directly and has a global Supply Chain.

Safran Nacelles employs 850 people at its Burnley site in Lancashire. The site is synonymous with the manufacture of nacelle systems and thrust reversers. In recent years, the site had been primarily associated with the Airbus A330, but is now embarking on new programmes such as the Airbus A320neo (new engine option), Comac C919 and A330neo.

Operating in all segments of the civil aviation market, from business and regional jets to mainline commercial jets, Safran develops complete nacelle systems for their engines, and provides a full slate of support services. In addition, Safran Nacelles makes advanced composites for aerostructures. Safran Nacelles is part of the Safran group, a leading international high-technology group with four core businesses: aviation, space, defence and security.

Operating worldwide, the Group has 66,500 employees and generated sales of €15.8 Billion in 2016.

MBDA, is a world leader in missiles and missile systems, it is a multi-national group with 10,000 employees worldwide.

The new facility in Lostock, near Bolton, employs around 300 people on UK based production related activity. It is part of the only European group capable of designing and producing missiles and missile systems to meet the whole range of current and future operational requirements for the three armed forces (army, navy, air force).

They are a prime contractor for a series of strategic multi-national programmes. Overall, the group offers a range of 45 products in service and another 15 in development. These cover Air Dominance, Battlefield Engagement, Maritime Superiority and Ground Based Air Defence environments.

Image © Rolls-Royce

Sigmatex is a £59 Million turnover business with some 220 employees in 2015. Its headquarters and UK production facility are based in Warrington, with 3 further sites in the US and China.

Sigmatex states that it is the world’s leading independent converter of carbon fibre. Sigmatex develops and manufactures carbon fibre textiles for composite material applications. From global locations, Sigmatex supplies woven carbon fibre textiles including 3D, spread tow, innegra, recycled, unidirectional, multiaxial, and 2D woven solutions across a broad spread of industries, ranging from the world’s high volume automotive manufacturers to performance leisure brands and most of the world’s major aerospace companies.

Kaman Corp is headquartered in Bloomfield, Conn. USA. In Lancashire, Kaman is based at Darwen and Burnley, employing 330 people with an annual turnover of £28 Million. Kaman has a further UK site in Hyde in Cheshire, employing 70 people.

Kaman Composite Structures at Darwen has world-class facilities in structural composites manufacture. Its six computer-controlled Autoclaves provide it with the largest independent autoclave capacity in the UK.

Kaman also has a “state of the art” capability in out-of-autoclave structural composites manufacture. The manufacturing capability includes a full suite of clean room facilities, non-destructive testing and mechanical testing equipment.

The Tooling Centre of Excellence in Burnley opened in 2014. It is equipped with the latest design suite for enhanced design and manufacturing. This purpose-built facility is equipped to meet the increased size requirements of modern aircraft structures assembly tooling, including a new 20 metre 5 axis CNC milling machine capable of machining the largest aerospace tools, and a 6 metre coordinate measuring machine used for high-precision digital inspection.

The APPH Group has been designing and manufacturing hydraulic systems and landing gears for diverse civil and military markets for many years. Since 2014, it has become part of the Toronto listed, international Heroux-Devtek group.

APPH provides a total design solution for aircraft hydraulic applications, from single system components to complete integrated landing gear systems.

APPH has a filtration systems facility in Bolton, a landing gear and maintenance, repair & overhaul facility in Runcorn and a precision machining facility in Nottingham. Together, they employ around 330 staff with sales of almost £45 Million.

Assystem is a €1 Billion turnover group with 12,500 staff. Assystem UK, a £90 Million turnover, 900 person business in the UK has been headquartered at Bamber Bridge, Lancashire.

Assystem is one of the leading European Aerospace engineering firms and relies on thirty years of experience shared by 4,000 employees specialised in Aerospace. They are gathered in business excellence centres, integrated within international teams working in locations around the world to meet the customer’s need as locally as possible. Historically a leading edge Aerostructure design company, Assystem has grown into a key player which can manage engineering throughout the entire product life cycle.

In May 2017, Assystem announced an agreement with the private independent investment company Ardian with a view to selling to Ardian 60% of its R&D outsourcing division Global Product Solutions (GPS) which includes its aerospace interests to give access to the resources and expertise that Ardian deploys. This is aimed at enhancing GPS’s growth and its geographical and sectorial reach to ensure, over the long run, its position as a market leader.

Image © AIRBUS

Senior Aerospace Weston, located in Earby, Lancashire, is part of Senior plc. It is a leading supplier of a wide range of complex precision machined components, and sub-assemblies for original equipment manufacturers (OEMs) predominantly in the commercial aviation market sector. They support multiple segments of an aircraft’s build, including the manufacture of engine compressor and fan components, engine pylon mounting brackets, pintles, wing ribs and associated aero-structure components.

Over the past nine years ,the business has relocated to two purpose built facilities of 120,000 sq. ft.

Senior plc is a £1 Billion turnover, international manufacturing group, with 33 operations in 14 countries.

Other Senior Aerospace Group businesses - BWT and Bird Bellows - have NW based sites at Macclesfield and Congleton.

Curtiss-Wright Surface Technologies’ organisation, formerly the Metal Improvement Company (MIC), has a Lancashire base in Earby. It is an element of the $2 Billion turnover Curtiss-Wright Corp. The organisation provides advanced surface treatments to complex high integrity metallic aeroengine components by laser shock peening. Laser peening offers designers the ability to surgically place residual compressive stress into key areas of components to retard crack initiation and growth enabling increased fatigue strength ratings. Curtiss-Wright Surface Technologies developed its laser peening process in conjunction with the Lawrence Livermore National Laboratory. Their laser peening process uses a unique high energy Nd:glass laser in conjunction with precision robotics to provide consistent and repeatable coverage of the square laser spots in the desired areas of the parts to be laser peened used on Rolls-Royce fan blades and discs.

Euravia is a specialist aviation company, now part of the international C$1 Billion Magellan Aerospace group, providing high quality, cost effective maintenance, repair and overhaul services for a wide range of gas turbine engines - with particular expertise in the Pratt and Whitney Canada PT6 engine series.

Operating from four purpose-built, fully FAA and EASA approved facilities in Lancashire, England, with sales of £14 Million and 70 staff, Euravia offers a Total Support framework for PT6 Engine Operators around the world.

It is difficult to get an accurate picture of employment in the aerospace sector from government data.

According to Office for National Statistics (ONS) data, the North West employs a sixth of the total number of Aerospace workers in the UK.

Traditionally, government statistics based on Standard Industrial Classification (SIC) codes have obscured much of the aerospace sector as many companies are “disguised” as “metal working” or “electro-mechanical equipment”.

Many large and medium-sized aerospace companies have taken to out-sourcing ‘non-core’ services (security, catering, IT systems, human resources etc.) which were previously undertaken in-house. As such, data obtained from the ONS often indicates lower levels of employment than is often considered the reality.

The national aerospace trade association, ADS, has published its annual survey for 2017 and indicates a workforce in Aerospace and Defence of some 120,000 people up from 113,000 in 2016. These figures include workers in organisations assessed to be part of the aerospace supply chain, but not necessarily that explicitly describe themselves undertaking activities

The North West employs nearly a fifth of the total number of Aerospace workers in the UK.

addressing the: manufacture of air and spacecraft (SIC : 3030); or repair and maintenance of aircraft and spacecraft (SIC : 3316).

Data from the ONS (Figure 2) indicated a total of some 85,000 employees categorised as working in the manufacture of air and spacecraft related machinery.

These numbers would indicate that

Image © AIRBUS

Employment in Manufacture of Air and Spacecraft and related Machinery

RegionAerospace

Employment

% of Aerospace

Employment

% of Total Employment in

the Region

East 7,000East Midlands 15,000London 500North East 1,500North West 14,000Scotland 2,250South East 9,000South West 19,000Wales 9,000West Midlands 6,000Yorkshire and The Humber 1,250

United Kingdom 85,000

Fig. 2 – ONS Data for Employment in Air and Spacecraft Related Machinery, 2015

the North West of England has some 14,000 employees working in Aerospace representing a sixth of the UK industry.

The equivalent for repair and maintenance of aircraft and spacecraft is 17,000 employees nationally and 900 in the North West of England.

Analysis by NWAA, focussing on aerospace related manufacturing, indicates that, in reality, the top 56 Aerospace companies in the North West of England have a combined turnover of over £8 Billion and employ approximately 25,000 people directly i.e. over a fifth of Aerospace workers in the UK.

Of these 56 companies, some 31 are located in Lancashire and have a combined turnover of almost £5 Billion and employ some 17,000 people, some 25% more than the official numbers would suggest. Furthermore, there are an additional 22 NWAA members with a Lancashire postcode.

The official numbers under-represent employment in the Lancashire Aerospace Sector.

Fig. 3 - Distribution of members of NWAA in the North West

Historically, Lancashire and the areas around Derby and Bristol have been host to the principal aircraft companies following the second world war; companies such as Bristol Aerospace, English Electric, De Havilland, Hawker Siddeley, Rolls-Royce etc.

The Lancashire Aerospace Industry, and the Warton and Samlesbury sites in particular, grew out of the English Electric Company to become BAE SYSTEMS as we know it today.

The two BAE SYSTEMS’ Lancashire sites employ approximately 11,000 people.

The three key regions of Aerospace Capability in the UK are Lancashire, Derby and Bristol.

Lancashire

In total, there are just over 308,000 manufacturing employees in the North West of England, the highest figure for any region of the UK (Ref. 2).

The North West of England is home to a number of companies in key UK manufacturing sectors; Aerospace (BAE SYSTEMS, Rolls-Royce, Safran Nacelles), Automotive (Jaguar Land Rover, Bentley Motors, General Motors/PSA Group, Leyland Trucks), Ship Building (BAE SYSTEMS), Nuclear (AREVA, Westingouse Toshiba,, NuGeneration, Sellafield Limited) and Pharmaceuticals (AstraZeneca, GSK, Novartis).

Lancashire provides employment in manufacturing for over 81,000 people and the ONS data indicates that of these, some 14,000 are directly employed in Aerospace in the North West region and over 13,000 of these are in the Lancashire area - the single largest concentration of aerospace employment in any county (Local Enterprise Partnership).

Based on NWAA Membership data, the top 31 aerospace companies (of 53 companies) located in Lancashire employ some 17,000 people. These are companies where the majority of the business would be considered to be Aerospace.

Lancashire has the highest number of manufacturing employees compared to other UK regions.

Image © BAE Systems

Derby Area

The total number of employees in manufacturing in Derby, Derbyshire, Nottingham and Nottinghamshire was 127,000 in 2015. Of these, a total of 53,400 people were employed in manufacturing by a Derbyshire business in 2015 (Ref. 3).

Derbyshire and the surrounding area provides a home to some of the world’s best-known manufacturing companies; Toyota (Automotive), JCB (Construction Equipment) and Bombardier (Rail). Today, Derby is home to the 2nd largest aircraft engine manufacturer in the world; Rolls-Royce.

Rolls Royce employs 12,000 people in the Derby area making it the city’s biggest employer. The business buys goods and services directly from 600 companies across the Midlands. In total, the business supports 34,000 jobs in the local supply chain and more

widely in the economy. In total, the activities of Rolls-Royce account for 3% of East Midlands GDP.

Bristol Area

The aerospace sector in and around Bristol is probably best represented by the West of England and Gloucestershire LEP areas. Together, 70,000 people are employed in Manufacturing, of which 11,500 are in aerospace businesses.

The companies encapsulated in this data include AIRBUS UK, GKN Aerospace, Rolls-Royce and supply chain companies providing materials, equipment components and technical support services to the prime contractors.

Image © AIRBUS

Figure 4 shows a summary of the data collected. It is clear that all three regions have significant global aerospace pedigrees, capability and capacity.

Lancashire could consider itself to be the leading aerospace centre as it has the ability to integrate the capability of the other two regions (e.g. aerostructures from GKN in Bristol and engines from Rolls-Royce in Derby) into an aircraft that can then be tested, maintained and supported through the whole lifecycle.


Lancashire (a) Derby Area (b) Bristol Area (c) Total Employees 694,600 1,055,900 893,700 Total in Manufacturing 81,000 127,000 70,000 Total in Aerospace 17,000* 13,000 11,500

2015

Fig 5 – Comparison of Employment in the Three Largest UK Aerospace Centres

Data Cover:-

a) Lancashire LEP area b) D2N2 LEP – Derby, Derbyshire, Nottingham, Nottinghamshire LEP areas c) West of England and Gloucestershire LEPs area

* Lancashire aerospace employment numbers have been taken from NWAA membership data

Growth Potential

Commercial and Military aircraft markets are currently following different cycles, which act as a hedge for suppliers.

Total sales for the Aerospace sector were £31.8 Billion in 2016. as recorded by ADS, up from £29.4 Billion in 2015. In addition, UK Defence sector sales were recorded by ADS as a further £23 Billion in 2016, down from £24 Billion in 2015.

Commercial

In the civil aerospace sector, it is estimated that there will be global demand for some 34,900 new passenger aircraft (Figure 6). with a total market value of US$5.3 Trillion, by 2036. AIRBUS and Boeing have strong order books bolstered by the emerging markets (and

particularly Asia-Pacific) with strong demand for Single-Aisle aircraft such as A320neo and the B737MAX.

The civil aerospace sector continues to be dominated by the launches of the Airbus A320neo and by that of the Boeing 737MAX.

Airlines and leasing companies have been stimulated to continue placing large orders for both aircraft types in order to replace ageing, less fuel-efficient aircraft.

Order activity for larger commercial aircraft over the last 10 years has been such that the Industry backlog has grown from 4,988 aircraft in 2007 to 12,589 by the end of 2016.

In short, the backlogs for the Boeing 737 and Airbus A320 alone are truly unprecedented

in terms of size, that extended to 10,097 aircraft by the end of 2016. This is equivalent to almost 10 years’ annual production. Both AIRBUS and Boeing have further plans to ramp up production of single-aisle aircraft programmes with production targets each growing to 52-60 aircraft per month by 2019 from current rates of 40-45.

The global commercial aircraft market appears to have crossed a peak demand. The long term demand drivers & fundamentals for commercial aviation, however, remain firmly in place with a strong passenger traffic growth trend projected over the next 2 decades.

Growth Potential.

Fig. 5 - Airbus Global Market Forecast, 2017.

Fig. 6 - Airbus Global Market Forecast, 2017, including freighter aircraft.


The UK also provides considerable product and support services to Middle Eastern customers. Exports to continental European markets also provided strength, particularly involving Airbus Helicopters, Leonardo Helicopters & Aircraft Divisions, MBDA.

percent in 2017, as defence spending in the US has returned to growth after multi-year declines in defence budgets, and future growth may be driven by the new US administration’s increased focus on strengthening the US military.

Exports of UK components to the USA driven by military aircraft programmes such as F-35 Lightning II, plus those of more mature programmes such as the Lockheed Martin C130J, all help.

Defence

Rising global tensions have led to increasing demand for defence and military products in the Middle East, Eastern Europe, North Korea, and the East and South China Seas. This is in turn resulting in increased defence spending globally, especially in the United Arab Emirates (UAE), Saudi Arabia, South Korea, Japan, India, China, Russia.

Defence sector revenues are likely to grow at a much faster 3.2

Growth Opportunities for BAE SYSTEMS.

The defence sector in Lancashire is heavily influenced by BAE SYSTEMS and their main aircraft programmes Eurofighter Typhoon and the F-35 Lightning II.

As of May 2017, some 599 Eurofighter Typhoon aircraft have been ordered of which 500 have been built. Orders have been received from UK (160), Germany (143), Italy (96), Spain (73), Saudi Arabia (72), Kuwait (28), Austria (15) and Oman (12).

With current orders, manufacture of Eurofighter Typhoon will continue to 2022. During that period, the national Final Assembly Lines (FALs) will progressively close. The German & Spanish FALs in 2018, the UK FAL in 2019 and finally the Italian FAL in 2022.

The Eurofighter partners reportedly continue to pursue sales prospects in Asia (Malaysia, Indonesia), Europe (Belgium, Finland, Poland & Switzerland) and the Middle East (Bahrain and repeat orders for Saudi Arabia, Kuwait, and Oman).

In the absence of a new fifth generation fighter jet programme, it is of national importance that the Eurofighter Consortium continues to achieve export success otherwise it must be recognised that the capability to integrate whole aircraft, generated over the last 100 years, could be lost from the region within the next decade.

BAE Systems has also been exploring further international collaborative development opportunities. In January 2017, BAE

Systems and Turkish Aerospace Industries (TAI) signed a Heads of Agreement to collaborate on the first development phase of an indigenous fifth-generation fighter jet for the Turkish Air Force – TF-X. This agreement is ahead of a planned contract with a value in excess of £100 Million. At its peak, hundreds of Turkish and UK engineers will collaborate on the TF-X programme helping to support collaboration on the skills, technology and technical expertise required to deliver the programme.

The BAE SYSTEMS Samlesbury site has invested significantly in the largest defence programme in the world – the F35 Lightning II led by Lockheed Martin.

As the F-35 Lightning II programme’s only Level 1 partner, British industry will build 15 percent of each of

the more than 3,000 planned F-35s, generating significant export revenue and GDP growth. The programme is projected to create and support more than 24,000 jobs across every region of the United Kingdom.

BAE SYSTEMS is responsible for manufacturing up to 15% by value of each and every F-35 aircraft (excluding propulsion). That’s not just for those aircraft manufactured for UK defence, but the entire global fleet. The aft fuselage and vertical and horizontal tails - effectively the rear section - of every F-35 are built at Samlesbury’s state of the art advanced manufacturing and assembly facilities in Lancashire.

A monorail system works to pulse the aircraft along a production line allowing the tails to pass through three stations where sealants and two carbon skins are applied in a series. This state-of-the-art production capability is enabling the company to meet the programme target of producing one aircraft per day.Over recent years, BAE Systems has invested over £150m in new facilities and equipment to ensure that they can meet the demands of the F35 programme. The big challenge and opportunity now is to quadruple the production rate, whilst at the same time halving the unit cost.


BAE Systems in Lancashire is a leading industry participant in the Anglo-French bilateral Future Combat Air System (FCAS) programme, which aims to produce an operational system by 2030.

A 12 month study phase is underway, following a two-year feasibility study that began in November 2014. This will ultimately lead to a full-scale £1.5 billion demonstrator development programme starting at the end of 2017. The programme has involved the three UK and three French companies, BAE Systems,

Dassault Aviation, Rolls Royce, Safran, Leonardo and Thales.The Demonstration Programme will develop two full-scale versatile and world-class Unmanned Combat Air Systems (UCAS) operational demonstrators by 2025. These demonstrators will be used for operational test and evaluation work over the following 5-10 years and could serve as the basis for a future operational capability beyond 2030.

This programme builds on the extensive investment in advanced combat air technologies made by BAE Systems and the UK

Government. This has included Taranis, a £185 Million Unmanned Air Vehicle (UAV) project led by BAE SYSTEMS Warton and in partnership with Rolls-Royce, QinetiQ and GE Aviation. Taranis commenced its flight programme in 2013.

Named after the Celtic god of thunder, the 12m long concept demonstrator with a wing span of 10m has been assessing the development of the first ever autonomous stealthy Unmanned Combat Air Vehicle, which would ultimately be capable of precisely striking targets at

long range.This technology is key to sustaining a strong industrial base and to maintaining the UK’s leading position as a centre for engineering excellence and innovation.


The Lancashire Aerospace Supply Chain has been able to balance the defence business cycle with the huge increases in the civil aerospace market.

The key elements to growth are:-

Infrastructure

Lancashire Local Enterprise Partnership (LEP) has secured £320m of Growth Deal funding to facilitate infrastructure projects across the county. Local district authorities have also acquired substantial funds to deliver solutions to identified local needs.

Major companies and a number of SMEs have continued to invest in major Aerospace related facilities, including those detailed earlier in this report, with commitments of an estimated further third of a billion pounds.

There is already a well-established portfolio of locations supporting business

Growth Levers for the Lancashire Aerospace Supply Chain.

& industrial activities right across the county, both with sites already provisioned for such activities, as well as greenfield areas for new development.

In addition, Lancashire has also provided specialist locations across the county to cover the needs of the aerospace and advanced engineering sectors. These include the Lancashire Advanced Manufacturing and Energy Cluster (LAMEC) sites and the Burnley Aerospace Supplier Park providing the supply chain with excellent opportunities to expand business. The Lancashire LEP has been successful in securing Enterprise Zone (EZ) status for four separate sites across Lancashire; the largest number of EZ sites awarded to a single LEP.

Where companies find challenges in creating the business cases for investment and growth, Lancashire provides advice and support through its BOOST growth hub, including access to finance. In addition, the North West Aerospace Alliance (NWAA) provides aerospace industry specialist programmes and support for competitiveness and growth.

Resources

In the last 6 years, UK aerospace companies have delivered an increase in productivity, whichhas been six times more than in the economy as a whole.

In addition to businesses investing in automated design and manufacturing systems to sustain and expand capability, further growth will call for additional skilled resources and new talent.

The North West of England has

the highest number of manufacturing employees in any region of the UK and an abundance of talent generated by Universities such as Manchester, Liverpool, Lancaster, UCLan,Salford and Bolton. There remain, however, significant skills gaps in key areas of the industry such as composite design, manufacturing engineering and sub-tier supply chain management.

For the future skills pipeline, Lancashire boasts of having the highest annual number of “STEM” graduates in the UK. This is

derived from the 4 Universities and 12 Further Education colleges that serve the county and beyond. Additionally, significant investments continue to be made to address specific areas and topics. These include, UCLan’s digitME programme to support SMEs in exploiting Industry 4.0 concepts; T2000’s Advanced Manufacturing & Automation Centre (AMAC), with the most current systems on which to train and develop capabilities; UCLan’s Civic Drone Centre promoting exploitation opportunities for drone applications; BAE Systems’ Academy for Skills & Knowledge (ASK) sized for both BAE Systems’ requirements and its wider supply chain; UClan’s Engineering Innovation Centre (EIC): and the proposal to develop a Lancashire based, NW hub of the national Advanced Manufacturing Research Centre (AMRC) at

the Samlesbury LAMEC site. Together, these are able to form a formidable skills and innovation exploitation capability. Management

There appears to be a step change in the way that a £5 - £10 Million SME can be managed as a supplier supporting local customers, to a £15 - £20 Million supplier that is part of a global aerospace industry, responsible for managing sub-tiers.

The latter organisation requires a step-change in leadership and management capability. Boost, Lancashire’s growth hub can provide ambitious SMEs a range of support for this, including participation in the Lancashire Forum run by Lancaster University, ranked as one of the top universities in the world

Image © AIRBUS


Image © UK MOD Crown Copyright

Competitiveness

The Lancashire Aerospace Supply Chain has the means to differentiate itself in terms of technology, quality and delivery to make it internationally competitive.

Customers are typically seeking a 20% reduction in cost from UK suppliers to achieve global competitiveness. The North West Aerospace Alliance (NWAA) has been an active proponent of world-class supply chain improvement capability from the North West region. NWAA has created and managed the Aerospace Supply Chain Excellence (ASCE) programmes since 2006 and is now leading the latest programme aligned to the national aerospace SC21 framework.

It is estimated that there will be global demand for some 34,900 new passenger & freighter aircraft, worth around US$5.3 Trillion, by 2036.

The Aerospace Growth Partnership (AGP) between UK Government and Industry is used as an example of the sector partnerships being sought under the UK Industrial Strategy.

It has created a vision (Means of Ascent Ref. 7), so as to keep the UK aerospace industry at the forefront of the global aerospace industry for the next 20 years and beyond.

The AGP is now focussed on delivering the technologies, skills, capabilities and investment that will allow the UK to compete new strategic work packages. New manufacturing processes, new skills and a flexible and adaptable supply chain will be critical if the UK is to grasp these opportunities.

Fitting with UK Strategy.

The creation of the Aerospace Technology Institute represents a joint Industry and Government investment of £2 Billion over 7 years to 2020 to give certainty and stability for technology and innovation.

Furthermore, Government is proposing further support for a new phase of the £23 Million project (National Technology Exploitation Programme, NATEP) which has developed 100 new technologies in the supply chain and has been delivered via each of the UK’s regional aerospace trade associations.

The aerospace industry in the North West of England has benefited from a further £20 Million of government investment over the last 10 years through NWAA’s Aerospace Supply Chain Excellence (ASCE) Programmes and the GAMMA UAV Programme. NWAA has worked with companies to improve leadership, strategy, lean production systems and manufacturing capabilities. NWAA has forged a level of collaboration amongst

the supply chain that will enable them to enhance the management of their own supply chain and with customers boost competitiveness.

The AGP report describes that opportunities will be identified to bring high-value work back to the UK that may currently be overseas.

The aim of NWAA is to ensure that companies in the North West of England are competitive and able to deliver that work with to the right quality and on-time-in-full.

Image © AIRBUS

The UK’s Aerospace Growth Partnership describes in its strategy document “Means of Ascent” how the UK Aerospace Industry is the largest in Europe and the second largest in the world after the United States. The value that it provides in terms of revenue, employment, skills and technology makes it strategically important.

The North West of England is home to over a fifth of that industry’s UK’s workforce and Lancashire is at its heart. Lancashire has over 100 years of aerospace experience and has designed and manufactured over 150 different aircraft.

The design capability that exists in companies such as BAE SYSTEMS and Assystem is globally significant.

The Lancashire supply chain contains many companies with unique capabilities particularly, for example, in systems integration of engine components (Rolls-Royce Barnoldswick, Safran Nacelles and Paradigm Precision).

Conclusion.Today Lancashire has the skills and resources, through BAE SYSTEMS, to integrate the core capability of the other two significant UK aerospace centres into a whole aircraft.

Lancashire is No.1 for aerospace jobs in the UK, with the greatest concentration of aerospace people in any of the Local Enterprise Partnership (LEP) areas.


This report has been produced by: North West Aerospace Alliance, Units 9 &10, South Preston Office Village Cuerden Way, Bamber Bridge, Preston, PR5 6BL

North West Aerospace Alliance ™North West Aerospace Alliance, NWAA and ASCE are all Trade Marks.

Tel: + 44 (0) 1772 648800

www.aerospace.co.uk

@NWAerospace

@takeoffnw

Contact Details:

North West Aerospace Alliance, Units 9 &10, South Preston Office Village, Cuerden Way, Bamber Bridge, Preston, PR5 6BL Tel: + 44 (0) 1772 648800 W: www.aerospace.co.uk

LANCASHIRE No.1 for Aerospace Jobs for Aerospace Jobs ... Rolls-Royce, UK MOD and Museum of Science...

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