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Airbus to shift engineering and design work to India
By siliconindia
Bangalore The European passenger plane maker Airbus SAS will transfer 20 percent of its engineering and design activities to low cost countries, and India will get the major chunk of the work. The work will be shifted to India by 2012, as the company aims to compete better against its main rival Boeing, reports Livemint.
Airbus has an engineering centre in Bangalore consisting 120 people , which will be expanded to 450 employees next year.
Airbus also outsources work to around 20 Indian IT and engineering service providers, including Infosys Technologies, Satyam Computer Services (now owned by Tech Mahindra), Quality Engineering and Software Technologies (Quest) and HCL Technologies.
"There is a big push at the top level to grow business in India in the next three to four years. Around 60 percent will be done internally and 40 percent local outsourcing," informed Eugen Welte, Head of Operations, Airbus Engineering Centre India, at an aerospace symposium in Bangalore.
"Airbus will increase the work it outsources to Indian firms to save as much as 40 percent of costs," Welte said.
The company has also directed its top suppliers such as aero engine maker Snecma SA to move work to India for driving the costs down, either by setting up captive centres or working with local suppliers. "They have price reduction targets every year," said Welte.
Although the company has centres in China and Russia as well, but a majority of the work will be done out of India, added Welte.
India is the fastest growing market for Airbus, with 68 percent of its future plane orders coming from the country. The European Aeronautic Defence and Space (EADS), the parent company of Airbus, had committed investments of 
13,700 crore in 2006 in India over next 15 years including for the Airbus engineering centre.
EADS spends about the same amount per year on engineering services like research, modelling, flight physics and aircraft design.
The Indian unit builds flight management systems and models to test aircraft parts and systems virtually before production. However, Welte denied specifying the budget for engineering services.
Its rival Boeing also had increased the work it outsources to Indian firms. In December 2007, Boeing signed a 10 year manufacturing contract for 4,650 with Hindustan Aeronautics (HAL) for making subsystems for its fighter planes such as F-18 Super Hornets and Apache helicopters.
13,700 crore in 2006 in India over next 15 years including for the Airbus engineering centre.
EADS spends about the same amount per year on engineering services like research, modelling, flight physics and aircraft design.
The Indian unit builds flight management systems and models to test aircraft parts and systems virtually before production. However, Welte denied specifying the budget for engineering services.
Its rival Boeing also had increased the work it outsources to Indian firms. In December 2007, Boeing signed a 10 year manufacturing contract for 4,650 with Hindustan Aeronautics (HAL) for making subsystems for its fighter planes such as F-18 Super Hornets and Apache helicopters.