AVIC I eyes Airbus factories

AVIC I, China’s main state-owned aviation firm, plans to buy all or part of six Airbus factories in Europe, including the historic Filton plant in Bristol, the company said on Wednesday. “Our intention is to buy into all or some of these facilities but we have not reached a final agreement,” a spokesman for AVIC I said on Wednesday.

The bold move shows China’s growing confidence as it scours the world for assets to buy with its newfound wealth. But it is also recognition on Beijing’s part that it will need to acquire more foreign technology and expertise if it is to fulfill its ambition of producing large aircraft to rival Airbus and Boeing.

“The Chinese are ready and willing and just waiting for the Europeans to say when and what they are allowed to buy,” said Martin Craigs, president of the Aerospace Forum Asia. “But there will be some agitated hearts and glistening eyes if people think the crown jewels of British aerospace history are being sold to the Chinese.”

Filton is the plant the British Concorde launched its maiden flight from in 1969, at a time when China was tearing itself apart in the disastrous Cultural Revolution. Under an aggressive restructuring plan, known as “power 8”, Airbus intends to cut 10,000 jobs and sell all or part of six of its 16 facilities, including two factories in France and three in Germany.

Speaking at the Paris Airshow earlier this week, AVIC I’s general manager Lin Zuoming said that if his company were successful in buying the plants it would make a commitment to keep them open and make them into competitive and economical suppliers for Airbus.

A spokesman for Airbus in Beijing said it was “normal” for AVIC I to show interest in acquiring the factories but would not comment further. By searching the world for things to buy with its vast foreign exchange reserves China is following a trajectory traced by Japan in the 1980s and it is likely to run up against much of the same resistance Japan did.

It is unclear whether European laws would allow a Chinese state-owned company to purchase such sensitive assets but Airbus has itself already established an assembly plant in the eastern Chinese city of Tianjin, which is scheduled to go into operation next year. Beijing signaled its intention earlier this year to begin producing large commercial aircraft by the year 2020 but in order to meet that goal it will have to acquire more advanced technology to produce ancillary products such as engines, brakes, hydraulics and air conditioning systems.

AVIC I is leading a programme to produce the first Chinese-made 70-110 seat regional jet by next spring but industry experts say many of the parts used in the so-called Advanced Regional Jet for the 21st Century are actually provided by foreign suppliers.

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