Management, Labor Inefficiency Hold Back Avic

By Bradley Perrett
Source: Aviation Week & Space Technology
September 09, 2013

With obviously strong funding and rising technical skills, China's civil aircraft production is seeing marked advances in its sophistication. After decades of slow progress, the industry is now turning out large and technically difficult components of aircraft for foreign OEMs, while less assuredly developing its own.

Its great shortcoming, however, is in labor efficiency. Avic, the organization at the core of the industry, has more than 400,000 employees, compared to Boeing's 170,000. Even allowing for its military and non-aviation activities, Avic seems grossly overstaffed. Western industry executives consistently report that Avic employs inordinately large numbers of people in production. With so many workers to use, Chinese managers seem to have little incentive to increase labor efficiency. The result is high-quality civil aerospace production with doubtful profitability.

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