India's potential to attract aerospace investments, interview with Eaton (U.S.)

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    India's potential to attract aerospace investments, interview with Eaton (U.S.)

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    07 May 2010 8ak: Boeing’s 2009 - 2028 forecasts predicts (image (c) Boeing) that Asia will require an additional 9,000 planes costing about $1.2 trillion and the region will account for 31% of global aircraft sales in this period. However, this does not guarantee aerospace investments in India as a recent PriceWaterHouse report said that not all countries that are being sold to, will also see sourcing deals. Within Asia alone, India faces tough competition from countries like Singapore, UAE and China in getting companies to invest here. To get an insight in to what global Aerospace companies think of India as an aerospace investment destination, 8ak Editor, Manu Sood, spoke with Eaton Corporation’s Aerospace Group President, Brad Morton and Einar Johnson, Vice President - Customer Solutions Service about Eaton’s strategy for Aerospace group and prospects for India. The following is a combination of 8ak research and a telephone interview.

    For those who dont know the company, Eaton Corporation is a diversified power management company with 2009 sales of $11.9 billion. Eaton is a global technology leader in electrical components and systems for power quality, distribution and control; hydraulics components, systems and services for industrial and mobile equipment; aerospace fuel, hydraulics and pneumatic systems for commercial and military use; and truck and automotive drivetrain and powertrain systems for performance, fuel economy and safety.

    Eaton's Aerospace division was added through an acquisition of Aeroquip Vickers about a decade ago. Since then Eaton’s Aerospace has established itself as a leading supplier of hydraulics, motion control and fuel systems. In 1999, Eaton's sales were US$187 million and this grew to $1.6 billion out of $11.9 billion (Eaton Corporation’s 2009 total sales).

    Eaton has a strong presence in India with manufacturing and sales locations for Electrical, Hydraulics, Automotive and Truck transmission businesses. Additionally, Eaton also has a strong engineering team in India comprising around 700 engineers who undertake design, development and customer interface activities to support its global activities. Out of that Aerospace has a dedicated team of engineers who support global projects.

    Specific to aerospace and outside of its commercial programs, Eaton supplies hydraulics and fuel systems to India’s Jaguar, Harrier Hawk, Sea King, Advanced Light Helicopter, Intermediate Jet Trainer (IJT) and Light Combat Aircraft programs. Even people who know Eaton dont know that they also supply several Russian platforms, including the export version of the Mi-17s and Mi-171s helicopters.

    “We’re not just a hydraulics components company,” said Brad Morton, Eaton Corporation’s Aerospace Group president. “We provide electrical components and cockpit panels. We provide fuel management systems for aircraft and for ground support of aircraft. We’re focused on all aspects of power management, and we’re using a lot of the same concepts and techniques around systems management and systems integration and expanding our portfolio to be a partner with the OEM supplier.”

    “India is a very important part of our aerospace design and development, as well as our defence markets,” Morton said. “Our engineering team in India supports all of our platforms, and they are the design centre for many of our components. Our strategy is to increase our sourcing from India by growing our component and supplier base and establish a clear presence with an increased focus on the military segment.”

    "As primary aerospace manufacturers such as Airbus and Boeing increase their investments in Asia, their suppliers and service partners will likely follow them. Eaton is already present in India and moreover, an estimated 15 percent of Eaton Corporation’s global revenues are derived from Asia. Eaton is looking to expand its aerospace business in India by building on a well-established manufacturing, sales and technical base in the country”, said Einar Johnson, vice president of customer solutions and services for Eaton’s Aerospace Group.

    Coupled with the demand for new aircraft in India is projected annual growth of 8 to 10 percent in the maintenance, repair and overhaul market. One significant change that the company sees on the horizon for India is an improvement in aircraft maintainability and logistics, particularly for its military fleet.

    Eaton’s Aerospace group currently does a lot of design and support work for our global business from India. As their content expands, they have the potential to move to assembly and testing. The more systems capability they have, the more attractive they become for OEMs to work with them.

    “We are willing and eager to move in to India to work with the supply base and logistics and regional repair facilities,” said Einar Johnson, vice president of customer solutions and services for Eaton’s Aerospace Group. “Indian companies like HAL, Mahindra and Tata have ambitious aerospace programs. As India buys more western aircraft, Eaton will follow its partners as they expand there.”

    So far Eaton has found India to be a favourable environment for business, despite its reputation at times for being overly bureaucratic. To India’s credit, Morton thinks that having a more stringent network of rules and regulations in place has been beneficial for the country’s burgeoning aircraft industry. “In general, processes and procedures may be more bureaucratic than we typically encounter, but we understand that it’s controlled growth, and that it’s deliberate and sustainable,” Morton said. “This may have helped India grow despite the current global financial crisis.”

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