The Competitive Status of the U.S. Civil Aviation Manufacturing Industry: A Study of the Influences of Technology in Determining International Industrial Competitive Advantage (1985)

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COMPETITIVE ASSESSMENT OF TECHNOLOGY 129 Aerospace Laboratory (NAL), are responsible for Japanese engine research, development, and manufacturing efforts. MHI has been involved in licensed production of JT8D-M9 engines and also in commercial overhaul and repair of turbofan engines since about 1972. IHI, the largest of the threes is the prime contractor for F-100 engines, produced under license and used on the Japanese-built F-15 fighters. In 1979 these three companies established a domestic consortium, Japan Aero Engines Corporation (JAEC), which joined with Rolls Royce to develop a new engine (the RJ500) for the 150-passenger airplane market. This development has evolved into the V2500 engine and been supplanted by an expanded multinational consortium in which the Japanese companies (through JAEC) participate as a 23 percent risk-sharing partner. The others include Pratt and Whitney along with Rolls Royce (each with 30 percent shares), and also MTU and Fiat (with 11 percent and 6 percent, respectively). The most ambitious independent Japanese engine effort to date has been the FJR710. This engine, begun in 1971 under sponsorship of NAL and subcontracted to IHI, MHI, and KHI, is an 11,000-pound thrust, high bypass ratio turbofan engine. Figures 5-7 through 5-9 show that the FJR710 is not compatible with today's commercial transport engines. Development of the engine has proceeded slowly, suggesting a focus on development and demonstration rather than a viable commercial engine. The Japanese plan to invest $181.6 million through 1986 on the V2500's development—essentially a doubling of the $93 million that has thus far been allocated to the FJR710 program. While Japan's participation in the V2500 program is that of a minority partner, its longer-term objectives in the development of contributing engine technologies—in high-temperature alloys, coatings, and ceramics—should not be overlooked. Status of General Aviation, Regional, and Rotorcraft Propulsion All three types of aircraft, of course, use smaller powerplants and gearboxes to transfer power. Thus, the benefits of advances in large engines do not accrue to these smaller versions. The advances in high-temperature materials technology are applicable, and the strength of the U.S. infrastructure in these materials is valuable. The U.S. is thought to be ahead in propulsion technology for all of these aircraft. As noted earlier, the Canadian government has targeted engines of this size as an opportunity and is supporting development. In doing so, Canada is able to capitalize on proximity to high-temperature materials capability in the United States. 

COMPETITIVE ASSESSMENT OF TECHNOLOGY 130 There are currently 18 jet engine manufacturers in the free world and a total of 26 companies participating as licencees, consortia members, or joint venture partners. The three manufacturers of large engines and their associated companies account for approximately 75 percent of the market. Their share of the market for engines under 5,000 lbs. thrust, however, drops to under 45 percent. Four other U.S. companies—Garrett, Lycoming, Allison, and Williams Research—have more than 40 percent of the market. The development cost of a new engine in this size range is from $200 million to $1 billion, and these smaller engine manufacturers are marginal with respect to their ability to fund the development of a new engine. They face a formidable task in competing with companies receiving government support. Just as in the case of smaller aircraft, the technology and capital requirements for these smaller engines are a more attainable target for smaller countries. West Germany, France, Italy, Sweden, Japan, and Israel all have active entrants in this field. Engine Development and Production Capabilities Commercial transport engine development and production capabilities are strongly dependent on (1) the availability of specialized test facilities such as altitude chambers and wind tunnels, (2) the manpower available in the industry, and (3) suitable production facilities. Altitude Test Chambers and Wind Tunnels Figure 5-12 and Table 5-1 show the availability and capability of engine altitude test chambers of sufficient size to test medium-and large-sized commercial transport engines. Both the United States and the United Kingdom have test facilities available. The only other country currently possessing a suitable facility is France. The Office of Science and Technology Policy (OSTP) report on Aeronautical Research and Technology Policy indicates that “... with minor exceptions, existing and planned [U.S.] major facilities are adequate and will not require replacement in the near future.”2 A 1981 study was conducted by NASA titled Survey of Altitude Test Facilities and Wind Tunnels—U.S.A. and Foreign. Information in this report, summarized in Figure 5-12 and Table 5-1, which lists major United States and foreign altitude chambers and wind tunnels, indicates that Europe, in general, has sufficient modern test facilities to support independent development of engines by European manufacturers.3 Japan lacks altitude test chambers and wind tunnels to support research and development of engines. The recent altitude test of