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Mitsubishi’s SpaceJet Decision Ends Japanese Civil OEM Ambitions

lcloo

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Japan doesn’t have enough domestic market to justify a project like China does. Neither Japan is in a financial position to give incentives to domestic airlines to shift to this new platform.

It’s a beautiful looking aircraft nonetheless.
They had more than 450 orders for Spacejet, that is more than enough to make handsome profits if the project was successful.

Therefore the excuse of small domestic market does not hold.
 

Indos

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Short distance jet plane is basically not having much advantage with propeller one since the short distance will make the difference is not that great. Propeller plane is also less expensive and more efficient in fuel consumption compared to jet plane. Short route, economic wise, should use propeller plane like ATR 72

I think this is why Indonesian R80 program I think has more business rational over Japanese civilian plane program.


They had more than 450 orders for Spacejet, that is more than enough to make handsome profits if the project was successful.

Therefore the excuse of small domestic market does not hold.

This kind of 450 order is just LOI and more like marketing gimmick, the same also happen with Indonesia N219 during 2014-2017, but the actual order can be quite different when the plane has already been ready to enter the market (certification phase has been completed)
 
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zhxy

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It's a money burning program, it's wise for Japan to give it up in the country's difficult economic situation.
Recently, Japan is planning to increase its military budget, project 20,000 tons of cruisers (possibly real) and buy a lot of Tohamawk missiles, at the same time they also launch a number of other military projects.

The difficult economic situation is not the main reason. It has more to do with the will and vision of the leader.

What is happening in Japan reminds me of the decision to abandon the WS-6 engine project, the Y-10 program and abandon the investment in Chinese chip research in the past.

The short gains and then the long pain.

They will continue to depend on foreign countries in the future. And one day in the future, they realize the importance of technological independence, they will have to start all over again, but the lost time is something they cannot get back.
 
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Indos

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Recently, Japan is planning to increase its military budget, project 20,000 tons of cruisers (possibly real) and buy a lot of Tohamawk missiles, at the same time they also launch a number of other military projects.

The difficult economic situation is not the main reason. It has more to do with the will and vision of the leader.

What is happening in Japan reminds me of the decision to abandon the WS-6 engine project, the Y-10 program and abandon the investment in Chinese chip research in the past.

The short gains and then the long pain.

They will continue to depend on foreign countries in the future. And one day in the future, they realize the importance of technological independence, they will have to start all over again, but the lost time is something they cannot get back.

Mitsubishi is 100 % private sector and not SOE like China and Indonesian aerospace companies, thus its decision will depend more on its business perspective. There is no rational for private companies to build plane that doesnt reach BEP and give good profit for the companies.

Any way, even if it is developed by SOE, civilian plane, still needs to be competitive for overall price, fuel consumption, and others since the consumers will likely be private sectors that is sensitive for overall price and its operating cost

Unlike building plane for military that will likely get order by the government like Indian Tejas
 
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zhxy

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Mitsubishi is 100 % private sector and not SOE like China and Indonesian aerospace companies, thus its decision will depend more on its business perspective. There is no rational for private companies to build plane that doesnt reach BEP and give good profit for the companies.

Any way, even if it is developed by SOE, civilian plane, still needs to be competitive for overall price, fuel consumption, and others since the consumers will likely be private sectors that is sensitive for overall price and its operating cost

Unlike building plane for military that will likely get order by the government like Indian Tejas

It is similar to Brazilian EE-T1 Osorio. The company that developed this tank went bankrupt because of this project. And recently, Brazil is interested in some tanks from abroad.

Brazil EE-T1 Osorio.jpg


The government should invest in and support private companies in some special situations.

The final decision belongs to Japan.
 

beijingwalker

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The long, slow death of Mitsubishi’s SpaceJet

By Scott Hamilton

Feb. 9, 2023, © Leeham News: Mitsubishi Heavy Industry’s (MHI) announcement this week that it finally killed the SpaceJet program is hardly new. This was apparent as far back as January 2020 when all the Canadian and American leadership at Mitsubishi Aircraft Corp (MITAC) was unceremoniously booted out. Then, in May 2020, using the COVID pandemic as an excuse, all US operations were closed; so was the recently opened Canadian engineering center; the budget was reduced by 95%; and nearly all the engineers at the home office in Nagoya, Japan, were laid off or reassigned.

MHI refused to state the obvious. Instead, officials said repeatedly that the program was “paused.” This drip, drip, drip was all about saving face. Thus, the slide in MHI’s presentation about why the program was finally being killed was more candid than expected.

Ignores M100, focuses on MRJ90

MHI’s slide detailing why it terminated the SpaceJet program focused on the MRJ90 and ignored the redesigned, certifiable model, the M100 SpaceJet.

SpaceJet-Kill-1024x717.png


The references in the slide are accurate—as far as they go. The MRJ90 was uncertifiable as designed, due to inexperience by MITAC’s staff. They didn’t have the knowledge to undertake a full airplane program with all the integration, regulatory and certification requirements required. This led to the need to alter certain crucial designs of the MRJ90. Even so, the aircraft remained outside the US labor contract Scope Clause requirements related to weight; the MRJ90 was too heavy.

The insurmountable problems with MRJ90 led to repeated delays and billions of dollars in cost overruns. The Western team recruited to save the program came from Bombardier, Embraer and Boeing. They recognized the MRJ90 was unsavable and wanted to discontinue development of the MRJ90 in favor of redesigning the smaller MRJ70. This airplane had not only the same fundamental design shortcomings as the larger MRJ90. It also was designed to carry too few passengers, which made it uncompetitive with the Embraer E175-E2 and the legacy E175-E1.

Redesigns of the MRJ70 added passengers, shaved weight and updated the interior. LNA’s analysis of the redesign concluded that the airplane had a double-digit advantage vs the E1 and single-digit vs the E2.


Acquiring the CRJ program

One major consideration as the Western executives worked to save the program identified was the need for a global support system for their regional jet. Creating one from scratch would be an immense task. Talent, locations, infrastructure and not the least time and money were obstacles. So MITAC proposed to MHI that Bombardier’s entire CRJ program and its global support system be acquired. The CRJ itself was already a dead duck. Outclassed by the E-Jet and ignored by Bombardier as its focus shifted to the mainline C Series jet, there was a backlog of perhaps two dozen CRJs. Bombardier already planned to end production. MHI agreed to buy the CRJ global support system for eventual transition to the SpaceJet. The remaining orders for the CRJ came with it. The purchase price was about US$550m, with a targeted closing date of June 1, 2020.

Orders and MOUs

The MRJ90 had nearly 200 conditional orders from the USA’s Skywest Airlines and Republic Airways Holdings, plus low double-digit firm orders from Japan’s ANA and a US lessor. The Skywest and Republic orders were conditioned on US pilot contracts being relaxed to accept the heavier airplane. Skywest also had a similar conditional order for 100 E-175-E2s. Because pilot unions were clear they weren’t going to approve adjusting the Scope Clause, none of these conditional orders was firmed up.

But the M100 SpaceJet, as the redesigned MRJ70 was branded, met Scope. MITAC eventually obtained nearly 500 Memorandums of Understanding for the M100 from Mesa Airlines (which was announced) and (unannounced) from major US airlines and European carriers. But these were never firmed up because MHI’s ambivalence was already in the open for all to see.


More money needed

As 2019 came to a close, it was clear to MITAC executives that another US$3.5bn would be needed to finish certification of the M100. A prototype was completed. The executives wanted to discontinue work on the MRJ90 and redirect money, production and engineering resources to the M100. MHI refused to do so, preferring to complete certification of the MRJ90. Insiders said this was a face-saving way to avoid admitting mistakes associated with the MRJ90.

Development for the MRJ90 and now the M100 SpaceJet had cost about US$8.5bn. MHI’s other divisions were losing money for the first time in decades and the new MHI CEO vowed to stem losses.

By January 2020, the Western executives were on their way out. Nobody at MHI publicly acknowledged the true meaning but to outsiders knowledgeable of Japanese culture understood this was the beginning of the end of the SpaceJet program.


Then COVID became a global pandemic in March 2020. By May, MHI closed US operations and a Canadian engineering center opened in September 2019. The budget for the SpaceJet was reduced by 95% and MITAC engineers at the home office in Nagoya, Japan, were let go or reassigned within MHI. The program was dead—but MHI promulgated the fiction that it was merely paused.

MHI wanted to cancel the deal with Bombardier to purchase the CRJ assets, but it was too late. Closing was only weeks away and MHI ultimately went ahead. Upon closing, MHI wrote off the entire purchase price. This cleared the decks for MHI RJ, as the new company was called, to be a profit center supporting the CRJs for years to come. With an eye toward the day when CRJs eventually are retired, a new hangar was built in West Virginia capable of servicing mainline jets.

Stated Reasons to kill SpaceJet

MHI ignored the M100 SpaceJet in its entirety in the slide outlining why the program was discontinued. Nevertheless, the slide is surprisingly candid otherwise.


Setting aside the references to the MRJ90, which was going to be discontinued upon certification of the M100 (some omitted by MHI), all the other data in the slide rings true. Pratt & Whitney and Collins Aerospace, two key suppliers of the MRJ90, were especially reluctant to modify pricing for the M100.

Loss to the industry

The termination of the M100 program is a loss to the commercial aviation industry. It also kills MHI’s once-in-a-lifetime chance to become a global player in a duopoly with Embraer. Airlines like product competition. A larger M130 and a still larger derivate were in MITAC’s plans, eventually providing a family of airplanes. All this is gone.

 

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