2017 Regional Hubs - OEMs - Supply Chain Providers Regional Hubs - OEMs - Supply Chain Providers Education - Advanced Manufacturing - R&D - Space Education - QUÉBEC AEROSPACE QUÉBEC
QUÉBEC AEROSPACE 2017 Image courtesy of Pratt & Whitney Canada Dear Reader,
In a constantly-evolving industry landscape, Québec’s aerospace sector prides itself on remaining at the cutting-edge of research and innovation, a key factor in the province’s international success. As a driving force of Québec’s economy, support of the sector remains paramount as a strategic area for development. The global landscape is constantly changing and aerospace hubs around the world must continue to adapt to compete. For this reason, Aero Montréal and the Québec government are investing heavily into Industry 4.0 technologies and supporting their implementation, particularly in SMEs. By fostering a more competitive supply chain, our industry will continue to thrive and maintain its global leadership position. Alongside our focus on the development of Québec’s existing aerospace ecosystem, we remain open for business and ready to support companies looking to relocate or establish subsidiaries in the region. Long favored by foreign companies as an entry point into the North American market, Québec’s operating environment is highly attractive and can cater to the needs of any aerospace company. We are indeed proud to present in the pages that follow some highlights of this industry, an economic linchpin and source of pride for Québec.
Suzanne M. Benoît Dominique Anglade President, Minister of Economy, Aéro Montréal Science and Innovation, Government of Québec Arctic Ocean CONTENTS Global Business Reports
Exclusive Editorial Opinion Interviews Analysis Survey Leading industry and GBR’s reporters provide government figures from unique insights into all aspects The results of GBR’s survey Québec’s aerospace of Québec’s aerospace value records market sentiment industry discuss market chain after months of research of Québec’s leading trends with GBR on the ground aerospace executives 12, 13, 14, 15 and 8, 38, 86, 116 and many more many more 138-139
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Introduction to 55. Interview with Alta Precision 105. Thoughts Québec’s Aerospace Industry 56. Interview with Mecaer America 106. Québec’s Aerospace 4: A solution to cost 57. Interview with Héroux-Devtek pressures 8. Introducing Québec’s aerospace ecosystem 58. Driving Change: Engine manufacturers prove 110. Interview with AV&R 11. Regional Map of Québec major proponents of R&D 111. Interview with Hypertherm Robotic Software 12. Interview with Québec’s Minister of 60. Interview with GE Aviation 112. Interviews with Buildit Software Solutions Economy, Science and Innovation 61. Interview with Rolls Royce Canada and with Radix 13. Interview with Aéro Montréal 62. Avionics: Facilitating safe flight 113. Thoughts 14. Interview with Fonds de Solidarité FTQ 64. Interview with Thales Canada 15. Interview with Investissement Québec 65. Interview with Rockwell Collins Canada 16. Québec’s Aerospace Cluster: A bird’s eye 66. Enhanced Experiences: Cabin interiors view 68. Interview with Innotech-Execaire Aviation Research and Development 18. Regional Profile: City of Laval Group 19. InterviewPaci c with Economic Development, City 69. Interview with GAL Aerospace 116. Banding Together: Québec’s innovation of LavalOcean 70. Interview with F.List Canada ecosystem 4 20. Regional Profile: Agglomeration of Longueuil 71. Interview with Ingenio Aerospace 119. Interview with CRIAQ 21. Interview with Economic Development of the 72. Interview with GGI Solutions 120. Innovation Finds New Routes Agglomeration of Longueuil 73. Interviews with Astronics LSI and with Luxia 122. Interviews with Pratt & Whitney Canada 22. Regional Profile: City of Mirabel Innovation 123. Interview with Concordia University Québec 23. Regional Profile: Québec City 74. Driving Efficiency to Meet Competitiveness: 124. Interview with McGill University and with 24. Regional Profile: Sherbrooke Québec’s service and equipment providers MITACS & Polytechnique Montréal Canada 25. Regional Profile: Granby 76. Interview with Larecoere 125. Interview with University of Sherbrooke 26: The Big Four: Québec’s OEMs 77. Interview with PCM Innovation Group United States 28. Interview with Bombardier 78. Interview with P3 Group National Capital 29. Interview with Bell Helicopter Textron 79. Interview with Marinvent Province Capital Canada 80. Safety First: Optimizing inspection, testing License to Fly: 30. Interview with Pratt & Whitney Canada and maintenance measures Training Québec’s Workforce 31. Interview with CAE 82. Interview with Ansys NTI 32. Crossing Borders: Québec’s outward facing 83. Interview with CEL Aerospace 128. Developing the Talent Pool: Keeping up with aerospace supply chain demand 34. Factsheet 132. Interview with CAMAQ 133. Interview with TRU Simulation and Training Space
From the Ground Up: 86. Punching Above its Weight: Québec’s Space Aircraft Building Blocks Industry The Future of Québec’s 87. Factsheet Aerospace Industry 38. A New Order: Québec’s supply chain reaches 90. Interview with Canadian Space Agency turning point 91. Interview with MDA 136. Québec’s Claim to Global Leadership 41. Thoughts 92. The Science of Light: Québec’s booming 138. GBR’s survey of Business Sentiment Saguenay 42. Table of Capabilities optics and photonics industry amongst Québec’s aerospace executives 44. Aircraft Building Blocks: From the foundry to 94. Interview with National Optics Institute 140. Final Thoughts final assembly 95. Interview with Space and Defense Systems, 142. Credits 45. Interviews with Sonaca Montréal and with ABB Québec Mecachrome 96. Interviews with MPB Communications and Atlantic 46. Interview with L3 Communications MAS with Nüvü Camēras Trois-Rivières Ocean 47. Interviews with Stelia Aerospace and with 97. Space: Québec’s new economic frontier Saint-Jérôme Avior Sherbrooke 48. Aircraft Building Blocks: Components and Montréal sub-assembly Ottawa 50. Interview with Arconic Titanium and Adapting to Change Engineered Products 51. Interview with TNM Anodizing and Paint 102. Aerospace in Québec: The case for an 52. Interview with Tekalia Aeronautik industrial policy 53. Actuation and Landing gear 104. Expert Opinion: 100% of Nothing 0 75 150 Kilometers
0 75 150 Miles Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Arctic Ocean
Québec Aerospace 2017 Industry Explorations Global Business Reports
This research has been conducted by Catherine Howe, Sorina Dumitru and Matthias Lomas Edited by Mungo Smith Graphic design by Gonzalo Da Cunha
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0 75 150 Miles Image courtesy of Pratt & Whitney Canada GBR • Industry Explorations • QUÉBEC AEROSPACE 2017 INTRODUCTION TO QUÉBEC'S AEROSPACE
“Aerospace is a key area of focus for economic development because it aligns with three main pillars that must be met for economic growth: entrepreneurship, advanced manufacturing and exports… For these reasons, the government has launched industrial strategies over the years to support the industry and has recently made unprecedented investments into developing the sector, particularly focusing on innovation.ˮ
- Dominique Anglade, Minister of Economy, Science and Innovation, Government of Québec EDITORIAL Global Business Reports
Introducing AEROSPACE INDUSTRY AT A GLANCE CANADA: ECONOMIC IMPACT Québec’s Source: AIAC contributed close to aerospace US$28 billion to GDP ecosystem and 208,000 jobs
in the Canadian economy
the industry directly generated US$27.2B in revenues over 87,000 in employment 8 and nearly US$13 billion in GDP
QUÉBEC: SALES Québec holds a prominent position on the counts for 52% of the Canadian aerospace Source: Gouvernement du Québec international stage as one of the world’s industry’s total sales and is home to 70% average annual growth top three aerospace hubs alongside Se- of the country’s research and development in sales of attle and Toulouse. From as early as 1928, (R&D). when Pratt & Whitney Canada (P&WC) Situated in eastern Canada, the predomi- was founded to repair and overhaul Pratt nantly French-speaking province is ideally 5.2% & Whitney’s Wasp radial piston engines, located only a short distance from the bor- (1991-2016) Québec has been forging its path to the der of its largest export market, the United world-leading position it holds today. States. Alongside its favorable geographic total annual sales of Driven through the 1980s and beyond location, Québec’s retention of the French by Bombardier through its purchase of language and European flavor make it an Canadair and de Havilland Canada, the ideal choice for European companies to US$14.4 billion provinces’s aerospace industry today is access the North American market. The re- diverse, spanning the entire aerospace sup- gion’s international links are apparent both (2016) ply chain, with four prime contractors, ap- in the high number of exports–Québec ex- proximately 15 Tier-1 suppliers and rough- ports over 80% of aerospace production di- ly 200 small to medium-sized enterprises rectly or indirectly–and the high number of 52% (SMEs). subsidiaries that have been established in of Canadian aerospace sector sales (2015) Québec’s aerospace ecosystem is well sup- the province over the years. These include ported at both a provincial and national Bell Helicopter Textron, Pratt & Whitney level due to its important economic im- Canada (P&WC) and GE Aviation, subsid- pact. With 2016 sales of US$14.4 billion, iaries of U.S.-based Textron, Pratt & Whit- 80% growing at an average annual rate of 5.2% ney (a division of United Technologies) of Québec aerospace industry output is over the last 25 years, the province ac- and General Electric respectively, as well exported outside Canada
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports FACTSHEET
“ What makes the Canadian and Quebec aerospace sector unique is our philosophy and vision around promoting industry and research. With the support of government, we are able to export 90% of our products. We have great schools and institutions to work with and a favorable operating environment. The government’s innovation strategy has clearly been a part of our investments in advanced manufacturing. The Canadian ecosystem is a basis for our growth and our future.
- Maria Della Posta, Senior Vice President, Pratt & Whitney Canada (P&WC)
AEROSPACE TEAM 9
AN ESSENTIAL FUND FOR THE AEROSPACE ” SECTOR With over $370 million invested to date, the Fonds de as European companies such as Mecaer, Sonaca and notably France-based Safran solidarité FTQ plays an important role in Québec’s and Stelia, which formed in 2015 through aerospace sector. The Fonds is a partner of key industry the merger of Airbus subsidiaries Aerolia players, including Avior, AV&R, Bombardier, Héroux-Devtek and Sogerma. and Groupe Meloche. The presence within the province of major international OEMs such as Bombardier, With its sector expertise, strategic vision and extensive Bell Helicopter Textron, CAE and P&WC business network, the Fonds helps companies flourish by has laid the foundation for a prosperous offering patient capital. aeronautics sector. “We are the only prov- ince in Canada with OEMs,” stated Su- If you’re looking for a Québec business partner to help zanne Benoît, president at Aéro Montréal, you set up in the province through a merger, acquisition or Québec’s main organization for represen- creation of a subsidiary, we are ready and willing to prosper tation of the industry. “They play a vital role in investing in innovation and stimu- with you. lating research projects and inspiring talent in our universities.” The Big Four OEMs are supported by ap- proximately 15 Tier-1 integrators, includ- ing Héroux-Devtek, Mecaer, L-3 MAS, Sonaca, Safran, Stelia, GE Aviation and Rolls Royce Canada. Nevertheless, the at- tractiveness of the province lies to a great fondsftq.com extent in the approximately 200 special-
Global Business Reports Arctic Ocean EDITORIAL Global Business Reports
ized SMEs occupying distinct niches in of focus for economic development be- manufacturing and sub-assembly. The cause it aligns with three main pillars that large number of SMEs reflects the entre- must be met for economic growth: entre- “ preneurial nature of the cluster, which has preneurship, advanced manufacturing and developed around a private market unlike exports…The sector also employs 40,000 many rival clusters around the world. In people and Bombardier alone is the largest response to cost pressures and increasing aeronautics company in Canada. For these For the U.S. market, we are seeing a demand for more integrated services, Qué- reasons, the government has launched in- higher number of barriers related to bec’s aerospace supply chain is marked by dustrial strategies over the years to support military programs. The regulations consolidation as SMEs strive to compete the industry and has recently made unprec- and complexity are rising. There are with players both nationally and interna- edented investments into developing the currently many variables within the tionally. sector, particularly focusing on innova- United States that we must monitor Canada has also been very active in the tion.” as we scope and plan to expand to space sector since the early 1950s. Québec Clearly demonstrating its commitment to the United States for more military plays a key role in the industry, particularly the sector, the government recently invest- programs. The speed of introducing a as home to MDA Corporation, which was ed heavily in Bombardier’s C-series pro- founded in 1969 and today operates from gram, of which it owns 49.5%. Although program into production or moving a 11 locations in the UnitedPacic States, Canada the move has been met with some criti- program forward is very slow because and other countries further afield. “Over- cism, Anglade clarified: “Given that we are there are many risks involved and the all, Québec represents Oceanaround a third of a shareholder, this should be viewed as an impact of stopping production is big. 10 Canada’s space industry,” commented Syl- investment, not a subsidy.” vain Laporte, CEO at the Canadian Space The national government also recently an- Agency. “As of 2015, total revenues for nounced a 73% increase in defense spend- - Serge Audet, the space industry in Canada were about ing over the next 10 years, which will General Manager, C$5.3 billion, of which Québec constituted certainly impact demand in the region’s ATLAS Aeronautik C$1.67 billion. In addition, there are about aerospace sector. According to the Stock- 163 organizations that deal with space in holm International Peace Research Insti- Canada, 41 of which are based in Qué- tute, an independent international institute bec…The 163 organizations across Cana- dedicated to research into conflict, arma- da spent C$256 million on R&D in 2015, ments, arms control and disarmament, with Québec’s players contributing C$77 Canada is already the sixth-highest spender million. In terms of employment, there are in the North Atlantic Treaty Organization around 10,000 direct employees working (NATO) and 16th in the world. Increased in the space sector in Canada, of which government spending will likely offset ” roughly a third are employed in Québec.” challenges experienced by some compa- tion and early-stage R&D and, due to its Québec’s long history in aerospace has nies in securing continued work with the high number of universities carrying out secured the sector’s place as an impor- U.S. government. Whilst Canada has long cutting-edge research and the volume of tant strategic industry for the province’s been considered a domestic source for U.S. innovative startups and specialized SMEs, economic development. In 2016, Premier Defense and the two countries are very in- Québec is ideally placed to respond to Saguenay Philippe Couillard announced an invest- tegrated from a defense standpoint, poten- these trends. As well as programs geared ment of C$510 million over five years tial shifts in trade dynamics could jeopar- towards greener aircraft such as GARDN, –C$250 million in direct aid and C$260 dize the favorable relationship. the current main area of focus going for- Québec million in loans and other financing–to- Drawing on expertise from different in- ward will be towards the adoption of “In- Trois-Rivières
wards the expansion and diversification dustries, the backbone of Québec’s thriv- dustry 4.0” technologies to increase the Saint-Jérôme of the aerospace sector, with the expecta- ing aerospace ecosystem is innovation. competitiveness of the cluster. Taken in Sherbrooke Montréal tion to generate up to US$2.8 billion in With numerous programs coordinated at a response to the rapid growth of industries Ottawa investment. “Québec’s aerospace industry regional and national level, collaboration in lower-cost operating environments and is critical to the economy,” commented across company types and organizations of the increased efficiency these technologies Dominique Anglade, the Government of all shapes and sizes has been key in driv- offer, Québec’s aerospace sector has no in- Atlantic Québec’s Minister of Economy, Science ing the industry forward. Larger compa- tention of relinquishing its leading position Ocean and Innovation. “Aerospace is a key area nies are increasingly outsourcing innova- into the future. ▬
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Arctic Ocean Global Business Reports FACTSHEET
AEROSPACE MANUFACTURING AEROSPACE MRO REGIONAL MAP EMPLOYMENT SHARE BY REGION (2014) EMPLOYMENT SHARE BY REGION (2014) Source: AIAC
WESTERN CANADA
16% Pacic 44% Ocean 11
QUÉBEC
55%
18%
ONTARIO
24%
24%
Saguenay ATLANTIC
Québec 4%
Trois-Rivières 14% Saint-Jérôme Sherbrooke Montréal Ottawa
Atlantic Ocean
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations INTERVIEW Global Business Reports
The mission of the Ministry of Economy, support them. The days in which the OEMs Science and Innovation of the Government had many suppliers are long gone and it is of Québec is to support business growth, now paramount that SMEs meet the stan- entrepreneurship, science, innovation, ex- dards of global multinationals in order to port trade and investment in the province. approach contracts. This is pushing SMEs to consolidate. The globalization of SMEs With 50% of Canadian aerospace pro- is critical and much of the Ministry’s strat- duction based in Québec and C$14.4 egy is focused on bringing this about. billion in sales in 2016, what is the sig- nificance of the aerospace sector to Qué- What is the government doing to sup- bec’s economy? port SMEs in reaching international Generally speaking, Québec’s economy is markets? performing well, with low unemployment In order to export, SMEs need to become rates and a balanced budget for three years top performers; to do this they need to in- running, creating a strong framework. vest in Industry 4.0 processes and in auto- Aerospace is a key area of focus for eco- mation in particular. For this reason, the nomic development because it aligns with Ministry launched the MACH-FAB 4.0 Dominique three main pillars that must be met for eco- initiative with Aéro Montréal which focus- nomic growth: entrepreneurship, advanced es on helping SMEs transition to Industry manufacturing and exports. For example, 4.0. The Ministry also launched an export Anglade aerospace comprises the highest concentra- strategy in October 2016 and has a dedi- tion of R&D out of any other industry and cated organization to support exports. Ev- is the number one export driver, which is ery time we travel internationally to events, key considering exports (40% to the rest of we bring an aerospace team to promote ex- Minister of Economy, Canada and 60% internationally) account ports from SMEs and to find forums for Science and Innovation for 50% of Québec’s GDP. The sector also them to meet customers. GOVERNMENT OF QUÉBEC employs 40,000 people and Bombardier 12 alone is the largest aeronautics company in Do you expect any challenges with the Canada. For these reasons, the government change in U.S. Administration, and in has launched industrial strategies over the which international markets do you ex- years to support the industry and has re- pect to see most growth? cently made unprecedented investments There is no question that relations are get- into developing the sector, particularly fo- ting tougher with the United States. How- cusing on innovation. ever, counterparts in states such as New York, Texas, Hawaii, Pennsylvania and Could you elaborate on the govern- Maine have made it clear that they want ment’s support for the industry? to keep current commercial agreements in We have introduced many initiatives relat- place because they see the benefits. The ed primarily to R&D and exports and have Canadian and the U.S. economies are high- chosen to invest heavily in Bombardier’s ly integrated–a finished product may have C-series of which we own 49.5%. Given crossed the border five times during devel- that we are a shareholder, this should be opment. In addition, whilst the U.S. trade viewed as an investment, not a subsidy. deficit is huge, the percentage associated Another example of our commitment was with Canada is very low at less than 2%. our ability to move Bell Helicopter’s pro- NAFTA has been in place for some time, duction of the 505 model from the United and a degree of adapting could in fact be States to Québec. Equally important is our beneficial to all parties. work to support the space sector, appar- ent in our recent significant investment in Where does the greatest opportunity lie a C$200 million project led by MDA. In in the market for foreign direct invest- total, we have invested C$400 million in ment (FDI)? advanced manufacturing this year, associ- Tier 1s are the missing element in Qué- ated with 242 projects. bec’s ecosystem. There are specific com- panies the Ministry is targeting that could How important are the big four OEMs add significantly to the sector in Québec. in driving Québec’s aerospace cluster? The government will remain focused on The OEMs are the anchors of the indus- attracting, advising and investing in such try and set the standards for the SMEs that companies. ▬
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports INTERVIEW
Suzanne M. Benoît
President AÉRO MONTRÉAL
Created in 2006, Aéro Montréal is a strategic think tank that groups some positive developments, including through the MACH FAB 4.0 all the major decision makers in Québec's aerospace sector. Its mission Initiative in which SMEs work together to develop automation tech- is to mobilize Québec's aerospace cluster to support the growth of the nology. industry and its excellence on the global stage. How important are the OEMs in driving positive change in the Could you provide a brief introduction to Aéro Montréal’s role in industry? Québec’s aerospace industry? We are the only province in Canada with OEMs. Four of them are lo- We were created in 2006 by the industry for the industry in order to cated in the Greater Montréal area: Bombardier, CAE, Pratt & Whitney mobilize companies, universities, research centers and unions around Canada and Bell Helicopter Textron Canada. They play a vital role in strategic issues to make Québec’s aerospace ecosystem more competi- investing in innovation and stimulating research projects and inspiring tive. talent in our universities. Québec is an ideal location for OEMs. For example, Bell Helicopter recently re-patriated the production of its 505 How is Aéro Montréal helping companies transition to Industry helicopter model due to several factors, including the province’s strong 13 4.0? talent pool, the industry’s flexibility and the support of the government. Compared to industry sectors such as automotive, the aerospace sector is just starting on this trajectory. Our industry is generally more cau- Could you give examples of collaboration in the industry leading to tious, as lower production volumes make it harder to build the business advancement in innovation? case for return on investment. Companies such as Pratt & Whitney In 2011, Aéro Montréal launched the Coalition for Greener Aircraft Canada are embracing the digital shift with intelligent cells and in- program, SA2GE (Smart Affordable Green Aircraft), which aims to novative business processes. Aéro Montréal launched the MACH FAB develop parts and systems in a more environmentally-friendly way as 4.0 Initiative to support SMEs by assisting some of the more advanced part of the fight against climate change and in compliance with new companies involved in the MACH program with their transition to In- environmental regulations. We had great success with this initiative, dustry 4.0. Through adopting Industry 4.0 processes, SMEs become with 27 SMEs, five universities and four R&D centers collaborating. more digitally connected with their clients, which is a strong incentive The Québec government and private companies contributed C$150 for adopting these technologies. Our role is to ensure SMEs’ aware- million in five R&D projects. Héroux-Devtek, for example, worked on ness of the importance to make the shift to 4.0 and to identify solution a project to launch more environmentally-friendly surface treatment providers to support them in that shift. technologies. Advancements of this sort will place them in a strong position on new generations of aircraft with the OEMs. In 2016, we SMEs are under pressure to integrate their services, which is a launched phase two of the SA2GE program, with five projects being driving force for consolidation. Do you see this as a positive trend? selected. Between now and March 2020, Bombardier, CAE, Esterline Consolidation will continue and Aéro Montréal encourages this trend. CMC Electronics, Thales Canada and TeraXion will undertake strate- SMEs are currently too dependent on a limited number of customers; gic initiatives for Québec's aerospace industry as part of the SA2GE moreover, OEMs are no longer buying directly from SMEs but instead project. Their work will focus on manufacturing, avionics, optics and from integrators mostly located outside of Canada. Because SMEs analyzing big data, among other areas. must sell to international integrators, Aéro Montréal assists them in their internationalization and we facilitate meetings between interna- What are Aéro Montréal’s main priorities over the next few years? tional OEMs and Tier 1s and Québec’s SMEs. These include, for ex- We need to bring more integrators to Québec, such as subsidiaries of ample, regular meetings with Boeing and Lockheed Martin. large foreign companies. This will bring opportunities for our SMEs Québec does not have enough Tier 1s and we need to encourage Tier and foster supply links with our OEMs. We have also recently launched 3 and 4 companies to work together to fill that gap. This could be a strategic defense committee to create a portal to advertise business achieved through consortiums or joint ventures, not necessarily merg- opportunities in the defense sector. This will become more important ers. Consortiums are not commonly seen in Québec as companies are given the federal government’s announcement in June 2017 to increase wary about partnering with competitors. However, there have been defense spending by 73%. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations INTERVIEW Global Business Reports
Jean Wilhelmy & André Viau
JW: Senior Vice-President Aerospace, Construction, Services and Transportation AV: Portfolio Manager, Aerospace Industry JW AV FONDS DE SOLIDARITÉ FTQ
Fonds de solidarité FTQ is a development contribution it makes to the province’s ex- How is the industry structure likely to capital fund with a mission to contribute ports. shift in the longer term? to Québec's economic growth by creating, JW: There will be bigger companies in maintaining or protecting jobs through in- Could you elaborate on the range of more traditional fields and smaller compa- vestment in SMEs in all spheres of activity. funding offered across SMEs and the nies in niche areas. The bigger machining OEMs? companies will probably come to resem- Could you provide a brief introduction JW: We have influence at both ends of the ble integrators by adding services such as to Fonds de solidarité FTQ (Fonds)? supply chain and our support for the OEMs surface treatment, engineering and sub- JW: The Fonds was created in 1983, a time has positive repercussions for SMEs: bet- assembly. At the same time, there will be 14 of crisis in which companies lacked equity, ter performance in the OEMs translates smaller companies that are highly special- to finance companies, particularly SMEs, to better demand for the SMEs’ services. ized and innovative, such as AV&R in ro- to help them survive. Since its founding by Whilst we do not sit on the board of com- botics. Québec’s largest central labor body, FTQ, panies like Bombardier, CAE and Héroux AV: There are powerful disruptive technol- the Fonds’ primary focus has been to in- Devtek, we are strong partners and able to ogies coming into play such as 3D print- vest in SMEs so that they can grow and communicate our involvement with their ing, robotics and more broadly Industry ultimately provide more employment to suppliers. When investing in SMEs, we 4.0, which are evolving fast. Companies Québecers. Over time, as companies stabi- are usually minority shareholders, own- will have to adapt or be swept aside. In our lized, our method evolved to support com- ing 20% to 40% of the company. Unlike role on the board of companies, we want to panies which were performing well in their other funds, the Fonds favors a long-term ensure that they have a strategy in place to respective industries. Citizens receive a partnership. adapt to these changes. tax credit to incentivize them to invest in the Fonds given that it makes unsecured Is consolidation in the supply chain the Do companies have access to the neces- investments. It now has around 645,000 best way to increase the sector’s com- sary talent pool? shareholders and C$13.1 billion in net as- petitiveness? JW: Companies are struggling to find the sets. AV: The OEMs want fewer but stronger right talent and sometimes have to search Our main focus is the support of local com- suppliers. Companies of C$20 million internationally for it. There are not enough panies but we also want to attract foreign are fragile. However, a company of about younger people pursuing the technical companies to bring more economic activ- C$100 million will have a stronger bal- skills needed by the industry. The transi- ity into Québec. For example, we have in- ance sheet and access to funding that will tion required by the influx of new technol- vested in French company Mecachrome, enable them to better support the OEMs. ogies can also be a challenge. which has facilities in Québec. Our strategy is to support the re-grouping of companies so that they can reach this What are the main objectives for the How important is aerospace to the size range. We have also seen consortiums Fonds over the next few years with re- Fonds’ activities? form, especially in the construction indus- gard to aerospace? AV: The Fonds has a portfolio of around try, where some companies form a joint- JW: We will continue to support both half a billion dollars in the aerospace in- venture when unwilling to invest the nec- smaller and larger companies and focus dustry, spread over three funds and about essary capital. Consortiums could work on growing the companies we have in our 15 companies. Aerospace is hugely impor- but many captains on a boat can be prob- portfolio. We also plan to take advantage tant given the number of people it employs lematic. We are currently more focused on of investment opportunities presented by in Québec, the quality of the jobs and the encouraging acquisitions. recent new market entrants. ▬
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports INTERVIEW
Investissement Québec offers guidance and chining companies manufacturing parts financial solutions to corporations that are for Pratt & Whitney, including highly- looking to set up in Québec. specialized titanium parts for engines, for example. However, there are also many In 2016 to 2017 alone, Investissement small entrepreneurs that want to offer these Québec was involved in C$1.5 billion of services. Meanwhile, international compa- investment into the region. Could you nies often want to find a company to buy briefly introduce the organization and in Québec. When we travel to international its significance to Québec? events, we often bring entrepreneurs with We manage our business through a dual- us and try to match opportunities. funding model. On the one hand, we act as The Tier 2 and 3 subcontractors in Québec a government arm for economic develop- are very good and have production models ment. There are mandates through the gov- that make them competitive on the inter- ernment economic fund for attracting stra- national stage, using Industry 4.0 technolo- tegic businesses and maintaining strategic gies and other innovative processes. Inves- businesses in which the government might tissement Québec launched a big Industry Pierre decide to intervene and support companies. 4.0 initiative, for which we are now in the These decisions lie with the Government second year. The initiative includes financ- of Québec and we are the mechanical parts ing to grow our entrepreneurs and increase Gabriel that execute these mandates. The other type competitiveness, but also non-financial so- of fund through which we provide industry lutions such as the labor support. Only one Côté support is through partnership with other element of our plan to increase implemen- financial entities to do deals on -commer tation of these technologies is financial; the President and CEO cial terms. However, Investissement Qué- rest focuses on facilitation through other INVESTISSEMENT QUÉBEC bec is not a bank or a financial institution means to incorporate the culture of innova- like Fonds FTQ. We are there to support tion into our manufacturing. business sustainably on a long-term basis. 15 This long-term view separates us from oth- What is the vision for Investissement er organizations in our ecosystem. Québec going forward? Over the years, we have provided a huge Today’s economy is favorable, with an av- amount of support to the aeronautics indus- erage unemployment rate of 6%, one of the try. We have 12 offices around the world lowest in the last 40 years. We have very through which we connect our aerospace strong economic stability and a favorable companies to other international markets. fiscal system. Because our grid runs on re- One of our core activities is the attraction newable energy thanks to Hydro-Québec, of investment and the other is to further the many multinational corporations are inter- development of the industry in Québec. ested in establishing a base here to promote green power. Private investments are still Where does the balance lie between at- somewhat of an issue, but with the tools tracting healthy competition and filling that we have Investissement Québec is market gaps versus potentially dislodg- able to get a lot of leverage on the dollars ing companies in the region? spent. For our manufacturing initiative, ev- We judge these variables based on analysis ery dollar generated two-and-a-half dollars of Québec’s imports. Meanwhile, it is also of private investment. There is an appetite important to diversify the supply base for for innovation. price, quality and innovation purposes. The The other side of Investissment Québec is balance must benefit Québec’s ecosystem the attraction of investment, which has be- as well as presenting the best scenario for come more competitive. Compared to 10 the OEMs. There are many variables and to 15 years ago when there were perhaps we are in the middle to find that balance. 400 to 500 organizations dedicated to the attraction of investment around the world, When it comes to supporting Québec’s today there are 4,000. It is a very tough ecosystem, are there any gaps in the market, but Québec sells itself very well market or particular ways to increase internationally. ▬ competitiveness? When looking at the supply chain at some of the lower tiers, there are many large ma-
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Québec’s “ Québec also provides aerospace businesses with a competitive Aerospace Cluster: operating cost environment, as Montréal ranks second for most competitive operating costs among A Bird’s Eye View major metropolitan areas in North America specializing in aerospace.
- Denis Giangi, President, Today, as throughout the province’s history, tion still has 20 million square feet of available most of Québec’s aerospace activity emanates land located close to Saint-Hubert Longueuil. Rolls-Royce Canada from Greater Montréal, focused in four main Mirabel is a rising star when it comes to attrac- centers: the Agglomeration of Longueuil, tive aerospace hubs. “Mirabel’s population is the City of Mirabel, the City of Laval and growing by 40% to 50% every 10 years, with the Saint-Laurent-Dorval-Point-Claire area. many more workers attracted by factors such Alongside these major hubs lie smaller, spe- as cheaper housing and the excellent school cialized centers of aerospace activity spread network,” remarked Gilbert LeBlanc C.Ec.D., across Québec. director at Mirabel économique, the economic Across the St. Laurence River from Montréal, development agency for the city. Longueuil stands out for the size of its aero- Recognizing Mirabel’s advantages, P&WC space industry. It is the base of engine maker opened state-of-the-art assembly and test fa- around 2,000 jobs and housing 30 companies,” P&WC and landing gear systems and compo- cilities for its next generation of jet engines the region’s aerospace ecosystem is significant 16 nents integrator Héroux-Devtek, in total ac- in 2011 at a site named the Mirabel Aerospace and has proven an attractive destination for counting for 8,200 aerospace jobs, representing Center. Equally notably, Bombardier chose new entrants. Austria-based F. List, a special- about 20% of all aerospace jobs in the province Mirabel as the location for the final assembly ist in aircraft cabins, recently chose Laval as and 45% of Québec’s aerospace SMEs. Lon- of its C Series aircraft. its strategic location in North America, for ex- gueuil is a natural home for aerospace compa- In particular, Mirabel has become a hub for ample. Factors considered, according to Marc nies due to four main factors: the availability of subsidiaries of international companies want- Tremblay, assistant general manager at Laval skilled labor, excellent transport infrastructure, ing to establish a base in Québec. Aerostructure Développement Économique, included: “The a high quality of life and availability of land. manufacturers Sonaca Montréal and STELIA excellent infrastructure, enterprise-friendly ad- “The availability of skilled labor in manufac- Aerospace, assemblers such as Mecachrome, ministration and the availability of highly qual- turing is a major advantage in the area and the landing gear specialist Safran Landing Sys- ified and experienced aviation professionals.” first factor companies look for when selecting tems and in-service-support (ISS) provider L-3 Other notable companies include Mecaer a location,” commented Julie Ethier, executive MAS are all subsidiaries of foreign companies America, a subsidiary of Italian integrated director, Economic Development of the Agglo- located in Mirabel. Mirabel économique offers landing gear specialist Mecaer and Arconic, mération de Longueuil (DEL). generous tax credits to attract companies to the the producer of titanium airframe components A high-quality labor force is underpinned by region from all over the world and the city has and the only company in the province to have a strong education and research infrastructure the lowest taxes of any region in Greater Mon- achieved MACH level 5 in Aéro Montréal’s with École nationale d’aérotechnique (ÉNA), tréal. “We offer these incentives because we MACH supply chain development initiative. the biggest aerospace institute in North Amer- face competition from other aerospace clusters Lastly, the Saint-Laurent-Point-Claire-Dorval ica, attracting students from around the world. around the world,” commented LeBlanc. “We area on the Island of Montréal is home to over Furthermore, the Canadian Space Agency want to attract more international subsidiaries 60 aerospace companies, which draw advan- (CSA), the Canadian National Research Coun- to the region, particularly those of aerospace tages from its proximity to all of the other cil (NRC) and the Aerospace Technology companies.” major hubs, downtown Montréal and Trudeau Center (CTA) are located in the area, all sig- With 42 million square feet of land available Airport. The area boasts representation from nificant contributors to cutting-edge aerospace for development, much of it available in the companies of all levels of the supply chain and research. airport’s thriving industrial site, Mirabel’s of all sizes: from two of Québec’s Big Four In terms of transport infrastructure, companies aerospace cluster has room for further growth. OEMs in Bombardier and CAE, Tier 1 integra- in Longueuil benefit from excellent highway Occupying a strategic position between Mira- tors like Esterline CMC Electronics and Thales access to the rest of Canada and the United bel and the Island of Montréal lies Laval, where Canada, finishing and surface treatment shops States and from proximity to the Port of Mon- companies benefit from the ideal location and such as TNM Anodizing & Paint and Ultraspec tréal, Trudeau Airport and Saint-Hubert Lon- proximity to all other major companies found and service providers like MANNARINO Sys- gueuil Airport. Furthermore, the agglomera- in the Greater Montréal region. Accounting for tems & Software.
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Smaller, specialized hubs Highlighting the organization’s strong net- works with government institutions and for- Just beyond the perimeter of the Greater Mon- eign investors, Granby Industriel’s general “ tréal area, specialized areas of activity can be manager, Patrick St. Laurent, added: “Each We offer a very rich ecosystem and found in clusters such as Québec City, Granby time a foreign delegation makes a trip to a favorable geographic location to and Sherbrooke. Canada we receive a phone call, often due to export to locations such as the United Québec City, for example, is built on a culture companies wanting to establish a subsidiary or States and Mexico. We therefore offer of innovation spanning many industries. With develop an aerospace partnership with one of over 400 laboratories, institutes and research our companies.” access to Québec’s OEMs, such as centers in a city with a population of under Located approximately 90km east of Granby, Bombardier, and companies are also one million people, this concentration is one the town of Sherbrooke is the base of a number able to position themselves close to of the highest in Canada. Photonics is one of of highly specialized SMEs and Sherbrooke other OEMs in North America, such the city’s key areas of excellence, with oth- University. The university stands out for its as Boeing in the United States. The ers including composites and plastics. Indeed, strong industry ties and the key role it plays in proximity of these markets is a very Québec City is home to the National Optics many programs throughout the development strong attraction. Institute as well as ABB’s Space & Defense cycle, contributing and adding value from the Systems division, which specializes in optical- very early stages of innovation at technology based analyzing and sensing instruments for readiness level (TRL) 1 to product launch at - Pierre Gabriel Côté, the space sector. Québec City is also home to TRL 10. President and CEO, the largest R&D center in defense and security, Innovative SMEs include Exonetik, which de- Investissement the Valcartier Research Centre (DRDC), and velops magnetorheological fluid actuators and the largest centers in nutrition and infectious NGC Aerospace, which develops guidance, Québec disease. “An important element is the capa- navigation and control (GNC) systems for au- bility to transfer that R&D from the research tonomous vehicles used in the space and aero- centers to the private sector,” emphasized Carl nautical industries. Viel, president and CEO at Québec Internation- al, the regional economic development agency. ” “INO has been able to create over 30 compa- Montréal’s Airports: a natural home for Despite its focus on passenger traffic, a large 17 nies over the years. In general, we place an aerospace companies number of Québec’s aerospace companies con- emphasis on facilitating the commercialization gregate in close proximity to Trudeau Airport, of technologies. Over the last 10 years, over Montréal’s airports are also focal points for the benefitting from the doubling of direct- inter 40% of jobs created in Québec City have been aerospace industry, of which Mirabel Airport national flights from 2005 to 2015 to over 75 innovation-based. This is double the Canadian stands out. Until the early 2000s, Mirabel’s air- destinations. In addition, Saint-Hubert’s airport average, which sits at 20%, and 10% more than port shared passenger traffic with Trudeau Air- is making its own claim as an aerospace center. the province. We want to continue to bridge the port but it has since flourished as an all-cargo While much smaller than Trudeau or Mirabel gaps and build relationships with universities and industrial airport. In fact, all of Mirabel’s airports, it is Canada’s fifth-busiest airport due and research centers to ensure that companies international companies are located on the air- to the presence of major pilot training schools continue to foster innovation and grow.” port’s industrial site. Aéroports de Montréal, and its position as a hub for general aviation. Granby, meanwhile, has 15 aerospace compa- which operates Mirabel and Trudeau airports, As of 2015, the airport is receiving investment nies, accounting for close to 1,000 jobs, and has has made 50 million square feet of land avail- of C$17 million from the federal government become a center of expertise for metal fabrica- able at Mirabel Airport, half of which is ser- to improve its runways, including raising the tion and high precision machining. Significant viced and ready for use. The airport works load of one runway to accommodate heavier companies include machining and assembly in- closely with Aéro Montréal, Investissement aircraft such as Bombardier’s C Series and the tegrators NSE Automatech, Avior and ATLAS Québec, Montréal International and the City Boeing 737. As a result, MRO specialist Pro Aeronautik. The region is supported by Granby of Mirabel to attract more aerospace compa- Maintenance Aviation is looking to set up a Industriel, which promotes companies within nies to the site. “As ADM is a not-for-profit service center for the C Series at the airport, Granby’s two poles of excellence, aeronautics company, we are able to offer very competitive which could attract more aerospace companies and transport, and manages six million square rates. As an example of the support offered to to the site. feet of land. “Granby Industriel offers land at companies locating in Mirabel, two years ago, Whilst Québec has several nodes of excellence competitive prices and offers a 100% property ADM financed and built a facility for STELIA and clusters of activity, the province’s aero- tax credit for the first five years,” highlighted Aerospace, an Airbus division, at the airport. space industry is characterized by collabora- Eric Tessier, industrial commissioner at Gran- As a result, we won Airbus’ supplier of the tion and ease of access. Supported by excellent by Industriel. “Granby is also well located, year award,” commented Charles Gratton, vice infrastructure, companies work closely with near Montréal and only 30 km from the U.S. president, real estate and commercial services each other across the region and beyond; prox- border. In addition, the production and labor at Aéroports de Montréal (ADM). ADM also imity is less important today than it once was costs are 20% cheaper here than in Montréal recently invested C$60 million into one of its and companies increasingly look to the talent and the living costs are lower while the quality two 12,000-foot runways, which are now able pool and quality of life as one of the most im- of life is arguably higher.” to service any type of aircraft in the world 24/7. portant factors when selecting a location. ▬
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CITY OF LAVAL Source: Gouvernement du Québec
Mayor: Marc Demers Area: 477 sq. km GDP: 14.3 billion GDP Per Capita: US$33,644 Blainville Population: 430,000 Jobs: 200,000 Mirabel
AEROSPACE LAVAL COMPANIES Boucherville
ere des Prairies
Rivi
Longueuil Saint-Bruno-de-Montarville
JOBS
2,000 Montréal Pointe-Claire Brossard 18 MAJOR COMPANIES Chambly Arconic, Beaconsfield Fleuve Saint-Laurent Héroux Devtek, M1 Composites, Granby Mecaer America s
Lac St-Loui
LAVAL
Strategically located, Laval offers a prime business location, a highly dynamic environment and easy AT THE HEART OF access to qualified labour. THE METROPOLITAN Salaberry-de-Valleyfield AEROSPACE INDUSTRY Contact us to learn more about our services, incentive programs and tax credits available to businesses.
450-978-5959 lavaleconomique.com [email protected]
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Laval’s convenient location has helped the Greater Montreal Area. We are strategically area to become an important hub for the aero- located near Mirabel, Dorval, and Longueuil, space industry supported by the Economic De- where the 4 OEMs are located. velopment Division. What is the role of the development council Could you introduce the region and the in supporting existing companies? aerospace ecosystem you have in Laval? The City of Laval Economic Development Di- Blainville Laval offers a dynamic economic environ- vision promotes and ensures Laval’s economic Mirabel ment and access to a skilled workforce. Cur- development by seeking out new investments, rently the 3rd largest city in the province of by welcoming and supporting businesses and Québec, with 430,000 residents, it ranks 1st entrepreneurs in order to stimulate job growth among Québec regions for anticipated popula- and business expansion to ensure sustainable tion growth over the next 20 years. As part of a benefits for Laval citizens. LAVAL greater metropolitan area of 4 million people, We offer financial incentives and guidance for Boucherville it benefits from an abundant qualified and businesses and entrepreneurs. We are recog- skilled workforce. nized as having the best customer service for Boasting 11,400 companies in key sectors, in- company implementation and issuing permits ere des Prairies cluding many head offices and subsidiaries of among the 10 largest cities of the province. Rivi Marc foreign companies, Laval constitutes a diver- Our real estate investment team assesses the Longueuil Saint-Bruno-de-Montarville sified environment that is conducive to- eco needs of businesses and institutions, searches Tremblay nomic success. Laval’s 4 municipal industrial for and proposes implementation sites, and parks, 15 private parks and 5 industrial zones supports new implementations or the expan- offering 40 million sq. ft. of industrial space sion of existing businesses. Finally, our mo- available for development mean that real es- bility and international business team supports tate availability in Laval is very attractive. businesses in their exporting efforts, organizes Montréal Deputy General Director, Furthermore, the close proximity of highway trade missions, and recruits, hires and supports Pointe-Claire Brossard Economic Development and integrated public transit networks pro- the integration of specialized foreign workers. CITY OF LAVAL vides Laval companies with easy access to the 19 entire educational and research infrastructure What is the value proposition for Laval Chambly Beaconsfield in the Greater Montreal Area. over other attractive regions? Fleuve Saint-Laurent The aerospace industry in Laval is comprised The most important factor is our strategic of over 30 companies that employ nearly 2,000 location; we are close to everything. Further- people. It is a very significant industry in this more, we have put together aGranby very interesting city, not only because of the quality of the jobs incentive program through which the owner of that it offers, but also in terms of the impact an eligible building will be granted a property s on large and diverse industrial subcontractors tax credit for a period of 60 months. Two other and providers. We are proud to count on an advantages are cost of living and quality of industry that makes the Greater Montreal Area life. The cost of doing business and of living Lac St-Loui shine internationally that is well represented in are more affordable here than in other cities. Laval. Among the 30 aerospace sector compa- Laval offers a fabulous quality of life because nies in Laval, key players are: Arconic, Avior, it is an urban city with plenty of green space. Héroux-Devtek, M1 Composites Technology Being at the edge of downtown Montreal, our Mecaer America, Liebherr Canada, FACC location is especially good for young families Solutions, F. List, Latecoere Services, Electro- seeking a high quality of life and easy access Kut, NTS Consulting and others demonstrate to services that meet all their needs. that Laval is the premier area to do business. What are the objectives for the Laval Eco- Salaberry-de-Valleyfield What are some of the advantages to operat- nomic Development Division to further de- ing in this region? velop the region? Located in the heart of the Greater Montreal The first is to continuously improve our busi- aerospace hub, Laval is approximately 20 to ness environment; make it easy for companies 30 minutes from downtown Montreal, Mon- to implement or expand their facilities here. tréal-Trudeau International Airport, the Port Secondly, providing fast and efficient service of Montreal or Montréal-Mirabel International is key. We must develop strategies that sup- Airport, in addition to being less than 100 km port speed in transporting people and parts. from the US border. A highway network con- The third objective is to continuously develop necting Laval to Montreal by different routes competitive incentives, starting with ease of provides fast access from any direction in the access to labour. ▬
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BlainvilleSource: Gouvernement du Québec AGGLOMERATION Mirabel President: Monique Bastien Area: 282.4 sq. km OF LONGUEUIL Population: 419,677 Cities: Boucherville, Brossard, Longueuil, Saint-Bruno-de-Montarville and Saint-Lambert THIRD-LARGEST Laval AEROSPACE AGGLOMERATION Boucherville IN QUEBEC COMPANIES
ere des Prairies
Rivi
LONGUEUIL Saint-Bruno-de-Montarville
Saint-Lambert JOBS
Montréal 8,200Pointe-Claire Brossard
Chambly BeaconsfieldMAJOR COMPANIES Fleuve Saint-Laurent Héroux-Devtek, Pratt & Whitney Canada Granby 20
s
Lac St-Loui 45 % OF QUEBEC’S SMEs INDUSTRIAL PARKS ARE HERE 15 zones and industrial parks
Salaberry-de-Valleyfield MANUFACTURING COMPANIES
THE AGGLOMÉRATION DE LONGUEUIL 40% manufacturing companies THE UNIQUE of which LANDING SITE FOR YOUR 45% are exporters BUSINESS
MNCs 235 subsidiaries of multinationals generating 15,200 jobs
1 866 599-2335 [email protected]
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Blainville 250 different companies every year and con- authorities in the zoning of this land to make it Mirabel duct an annual census of their requirements, so easily available for new companies to use. we really understand their needs and are able to adapt our service offering accordingly. One How strong is the research and education of the most important services we offer is fi- infrastructure in the agglomeration of Lon- nancial assistance–we provide grants and help gueuil? Laval companies to identify different incentives of- The agglomeration is home to many research Boucherville fered by the government and other public and agencies, including the Canadian Space Agen- private agencies. We recently helped an aero- cy (CSA), the Canadian National Research ere des Prairies space SME by finding financial partners, pro- Council (NRC) and the Aerospace Technology
Rivi viding preparation support in the pitch to these Center (CTA). The CSA is where Canadarm partners and organizing a roundtable for rapid was designed and the CTA houses cutting-edge LONGUEUIL Saint-Bruno-de-Montarville feedback. This resulted in significant capital test equipment not found elsewhere in North Julie raised to finance the company’s research and America and works with aerospace companies development. from across Québec. There are also private Saint-Lambert DEL also supports innovation by connecting research centers at Pratt & Whitney Canada Ethier companies with research organizations and as- (P&WC) and Héroux-Devtek. sisting them with their intellectual property and The École nationale d’aérotechnique (ÉNA), Montréal commercialization strategy. The types of busi- located here, is the biggest aerospace institute Executive Director Pointe-Claire Brossard nesses in our agglomeration are those that typi- in North America and attracts students from ECONOMIC DEVELOPMENT cally invest the most in R&D. Compared with around the world. It is also the only institution OF THE AGGLOMÉRATION DE the Québec average, there are twice as many in North America which specializes on teaching Chambly Beaconsfield LONGUEUIL (DEL) businesses that reinvest over 5% of their rev- skills in aircraft construction and maintenance. Fleuve Saint-Laurent enues into R&D. Building on this strong foun- dation, DEL helps and encourages these com- What types of companies are you particu- DEL supports economic development within panies in their future developmentGranby and growth. larly focused on attracting to the region at the agglomeration of Longueuil by attracting We have also more than 600 exporters in the present? new businesses and offering a wide range of region and we help them identify foreign part- We want to attract new aircraft carriers and a 21 s services to simplify, facilitate and accelerate ners, prepare for trade shows and meet customs maintenance center for Bombardier’s C Se- the implementation of local companies’ busi- and logistics requirements. We are always look- ries, which we hope will be achieved through the construction of a new passenger terminal Lac St-Loui ness plans. ing to add to our services. For example, next September we are launching an incubator for at Montreal Saint-Hubert Longueuil Airport. Could you provide a brief introduction to the startups. This September, we are also announc- Together with the provincial government, we region and DEL’s activities? ing a very big project involving the purchase of are financially invested in the airport’s expan- The agglomeration of Longueuil is composed new technologies in line with Industry 4.0 that sion; if it goes ahead, we expect it to attract of five different cities–Boucherville, Brossard, we will loan to local companies and training new businesses and generate many jobs for Longueuil, Saint-Bruno-de-Montarville and programs in partnership with Emploi-Québec. the region. In addition, we want the machin- Saint-Lambert. There are around 2,000 compa- ing and manufacturing suppliers of P&WC and nies located in the region’s different industrial What are the main advantages for compa- Héroux-Devtek to set up facilities on the large zones, with most involved in manufacturing. nies looking to locate in the agglomeration amount of available land located near these two Salaberry-de-Valleyfield Our agglomeration is home to 85 companies of Longueuil? companies’ facilities. involved in aerospace, 45% of the total number The availability of skilled labor in manufac- in Québec, accounting for around 8,000 jobs. turing is a major advantage in the area and the What are DEL’s keys goals for the aerospace DEL’s ultimate goal is to help facilitate col- first factor companies look for when -select sector in the region over the next five years? lective wealth in the area through job creation ing a location. This partly reflects the training We want aerospace to remain the leading sector and increased investment. Our mission has two offered by many schools located here for the in the agglomeration and want to be considered main elements: to accelerate the realization of aerospace industry. Secondly, the agglomera- the number one region in Québec. DEL will business plans of companies located here with tion has excellent transport infrastructure with continue to collaborate with its many partners our personalized services and to attract new highway access to the rest of Canada and the to attract companies to the region. Overall, businesses to the territory in partnership with United States, close proximity to the Port of we want to make our companies even more the five cities and organizations like Investisse- Montréal and Montréal–Pierre Elliott Trudeau competitive, position the region as an innova- ment Québec and Montréal International. International Airport and the location of Mon- tion hub and develop new specialized services treal Saint-Hubert Longueuil Airport on our for the aerospace industry. For example, next What are some of the ways in which DEL territory. Thirdly, aerospace companies value fall we will be holding conferences for the supports aerospace companies in the local the very high quality of life in our agglomera- aerospace industry focused on innovation and area? tion. Finally, we still have more than 20 million exporting and bringing together smaller com- With its wide array of services, DEL is consid- square feet of well-positioned land available panies with bigger players and research orga- ered a one-stop shop for SMEs. We visit about close to our airport. DEL works with the city nizations. ▬
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“Of the 23 international companies based in Mirabel, most are linked to the aerospace industry, making the sector very important to the region… Montréal-Mirabel International Airport also brings many advantages to the region and companies operating near the site. It holds two runways of 12,000 feet which can handle any type of aircraft in the world, 24/7.”
- Gilbert LeBlanc Blainville C.Ec.D., Director, MIRABEL Mirabel économique
INVESTMENTS 2016 CITY OF MIRABEL Laval Source: Gouvernement du Québec C$419,099,825 Boucherville
President: Mayor: Jean Bouchard Area: 477 sq. km creatingere des Prairies 953 jobs Population: 50,513 Rivi Median income: C$43,080 (2015) LONGUEUIL Saint-Bruno-de-Montarville INDUSTRIAL PARKS AEROSPACE 22 COMPANIES Montréal Pointe-Claire 5 Brossard
Chambly Beaconsfield MANUFACTURING JOBS Fleuve Saint-Laurent JOBS 4,000 7,600 Granby s
MAJOR LacCOMPANIES St-Loui MNCs Pratt & Whitney Canada, Bell Helicopter, Bombardier, Sonaca Montréal, Mecachrome, Salaberry-de-Valleyfield Safran, LAND AVAILABLE L-3 MAS 42 million sq. ft of greenfield land
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QUEBEC CITY Source: Gouvernement du Québec
Mayor: Régis Labeaume Area: 3 349 sq. km Population: 807,211 GDP: C$34.6 billion GDP per capita: $44,404 Universities: 5
Blainville MIRABEL AEROSPACE
KEY COMPANIES APN, Laval OVER Boucherville Amec Usinage, INO, ere des Prairies ABB, Rivi LABS, INSTITUTES AND Creaform, LONGUEUIL Saint-Bruno-de-MontarvilleRESEARCH CENTERS TeraXion
“Whilst Montréal has a 23 wide range of OEMs and Montréal US$189.4 Pointe-Claire Brossard Tier 1s, Québec City has a concentration of Tier 2s million that can be built into their Chambly Beaconsfield IN ECONOMIC BENEFITS manufacturing chains.” Fleuve Saint-Laurent
Granby - Carl Viel, President and CEO, s Québec International Lac St-Loui QUÉBEC
Salaberry-de-Valleyfield Montréal Ottawa
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RESIDENTS
THE STRONGEST GROWTH OF POPULATION IN QUÉBEC “Sherbrooke is an innovative human-sized city; not too SHERBROOKE small and not too big, with two Source: Gouvernement du Québec GDP French and English universities.
As a small community, we Mayor: Bernard Sévigny Population: 163,623 are able to communicate well Area: 366 sq. km and decide collectively on our Urban boroughs: Brompton, Jacques Cartier, Rock- ForestSaint-ÉlieDeauville, MontBellevue, Lennoxville +4.9% priorities. If a company has Universities: 2 A THRIVING a mid- or long-term R&D MANUFACTURING SECTOR 24 project, we sit down with our researcher and his team AEROSPACE to make sure the company UNEMPLOYMENT RATE finds the right research team COMPANIES and infrastructure for the project to have and achieve its NGC Aerospace, milestones.” Mesotec, 6.2% Tekna Plasma Systems, BELOW THE PROVINCIAL AVERAGE FOR FIVE YEARS - Josée Fortin, Composites BHS General Director, Sherbrooke Innopole Québec
SHERBROOKE Montréal Ottawa
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GRANBY Source: Gouvernement du Québec
Mayor: Pascal Bonin Area: 48.24 sq. km
AEROSPACE
“As well as metal fabrication COMPANIES “Each time a foreign delegation and high precision machining, makes a trip to Canada we Granby also has capabilities in receive a phone call, often composite manufacturing and due to companies wanting to tooling machines for OEMs.” establish a subsidiary or develop an aerospace partnership with JOBS one of our companies.” - Patrick St. Laurent, General Manager, 894 25 Granby Industriel - Eric Tessier, Industrial Commissioner, INVESTMENTS 2016 Granby Industriel C$13,048,385
KEY COMPANIES NSE Automatec, Avior, ATLAS Aeronautik Québec
GRANBY Montréal Ottawa
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president of external relations. “Following strong driving force behind a lot of innova- this successful entry-into-service in Europe, tion that takes place in Québec. “We are very The Big the C Series will make its Asian debut later involved in all aspects of our community in 2017 with Korean Air.” and the Canadian ecosystem,” commented On the business jet side, the Global 7000 Maria Della Posta, P&WC’s Senior Vice and Global 8000 aircraft have set the stan- President. “We have more than 23 ongoing Four: dard for a new category of large business university agreements in Canada and major jets. The Global 7000 aircraft is the first and ongoing projects with CARIC, CRIAQ and only clean-sheet business jet with four liv- GARDN which connect us with all kinds of ing spaces. SMEs, universities and colleges to develop Québec’s It should come as no surprise that the im- our technologies with. We run 10 of the 13 pact of the OEM on the region is significant. Natural Sciences and Engineering Research “While Canada represents less than 10% of Council of Canada (NSERC) chairs… With OEMs Bombardier’s revenues, we have a strong the support of the Canadian government, we footprint here with over 21,000 employees, are also working with the aerospace cluster including more than 15,000 in Québec, and to create a consortium with themes related several production and engineering sites,” to advanced manufacturing and digitization. One of Québec’s defining characteristics is noted Marcil. “This reflects our 75-year Additionally, we work with more than 1,300 the presence of not just one but four OEMs: history and our strong commitment to this suppliers in Canada. In collaboration with Bombardier, CAE, Pratt & Whitney Canada country. It also enables us to leverage Can- the federal government, we have put in place (P&WC) and Bell Helicopter Textron Can- ada’s competitive strengths, such as strong a program to help suppliers gain aerospace ada. Each focused on different areas, these R&D capabilities, world-class engineering accreditation. We derive a lot of value from prime contractors drive Québec’s aerospace talent and high-value manufacturing.” these collaborations, and we try to give as ecosystem and provide strong bridges to the For the C Series, the final assembly, -sys much back to the community as possible.” international markets for many of their sup- tems integration and pre-flight operations P&WC’s focus on innovation is apparent in pliers. “We are the only province in Canada all take place at Bombardier’s Mirabel site, that almost 8,000 of the engines in service with OEMs,” highlighted Suzanne M. Ben- while the carbon-fiber fuselage and cockpit have full engine health management and 26 oît, president at Aéro Montréal. “They play are built at the site in St. Laurent. “Québec communication capabilities. “We also have a vital role in investing in innovation and suppliers are also part of the effort,” high- a new Oil Analysis Technology, which gives stimulating research projects and inspiring lighted Marcil, referencing Pratt & Whitney high visibility into the health and efficient talent in our universities.” Canada and CAE as suppliers of the engines operations of the engine without intrusive Bombardier takes top spot as Canada’s big- and pilot-training simulator respectively. inspection,” expanded Della Posta. “These gest aeronautics company and the global “So, while the C Series aircraft relies on a technologies allow us to be more proactive leader in airplanes and trains, posting rev- truly global supply chain, Québec ingenuity with our customers, while helping them enues of C$16.3 billion in 2016. The compa- played a central role in its success.” move toward more fully planned mainte- ny’s commercial aircraft segment has been Just around the corner from Bombardier’s nance environments and providing insights marked by the production ramp-up and rev- main Mirabel site is Bell Helicopter Textron to pass on to our engineering organization to enue-generation phase of the C Series air- Canada, a subsidiary of U.S.-based Textron. develop better next-generation products. We craft, the first all-new clean-sheet designed Bell Helicopter’s Mirabel facility focuses are immersed in how to transform our busi- family of single-aisle aircraft in the 100- to on commercial helicopters, currently the ness model and bring more customized solu- 150-seat segment in nearly 30 years. Fol- Bell 505, Bell 439, Bell 412 and Bell 407 tions to serve the diverse missions and needs lowing the CS100’s entry-into-service with programs. In March 2017, Bell Helicopter of our customers. Other areas of great in- SWISS and the CS300 with airBaltic, in also unveiled its FCX-001 concept aircraft, vestment are product lifecycle management conjunction with significant orders from Air which includes a plethora of innovative fea- (PLM) and other systems and technologies Canada and Delta, the aircraft backlog was tures, including a rotorless tailboom and an that position us well for the future.” increased to over 350. In 2017, the CS100 electric motor as part of a hybridized pro- With its mission, “Performance. Personal. aircraft completed a non-stop transatlantic pulsion system. Stepping further into the Guaranteed.”, in mind, P&WC is now work- flight from London City Airport to New future, the rotorcraft company announced a ing on the next large PT6 for general avia- York’s John F. Kennedy Airport and was partnership with Uber for the development tion and is currently modernizing and digi- awarded steep approach certifications, -en of air taxis. tizing all its early engines. abling SWISS to start operating the aircraft Reaching its 90th year of operation in 2018, Founded in 1947, CAE Inc. is a Canadian at London City Airport on August 8, 2017. Pratt & Whitney Canada (P&WC) is Qué- manufacturer of simulation technologies, “The performance and reliability of the bec’s aircraft engine manufacturer and a modelling technologies and training ser- aircraft have been outstanding so far, with global leader. Having produced its 100,000th vices and a leader in training pilots, offer- more than 1.5 million passengers flown on engine in April 2017, the company today has ing cadet to captain training solutions. With more than 100 routes and airBaltic operating upwards of 65,000 engines in service on 13 the increase in expected passenger trips the aircraft up to 17 hours per day,” high- different families of aircraft. Exporting 90% and number of flights, CAE stands in good lighted Olivier Marcil, Bombardier’s vice of its products, P&WC is nevertheless a stead to capitalize on the expected demand
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growth for its services. “Over the next 10 a few years ago, transferring our supply US$1 billion into Bombardier’s C Series, years, IATA forecasts that passenger trips chain along with it,” added Garneau. “We for example. Whilst some have criticized will grow by more than 4% yearly, meaning now have much more of a Mexico-focused the move, the government’s 49.5% stake the commercial aviation industry will dou- supply chain in these areas. Similarly in in the company indicates the commitment ble over the next 20 years,” outlined Marc Québec, as we look towards the next genera- to the program’s development as an invest- Parent, CAE’s president and CEO. “Airlines tion of helicopter and next commercial pro- ment that will benefit the entire region. The will need more pilots. In fact, at the Paris Air gram, we will be building a strong Canadian government also recently invested C$200 Show, we introduced our first-ever CAE Air- supply chain, looking for companies that can million in support of the space sector, in a line Pilot Demand Outlook to the market. It match us in innovation and follow us where project led by MDA. indicates that more than 255,000 pilots will we are heading in terms of technology.” In great part due to significant government be needed in the next 10 years and that over The presence of major OEMs elevates Qué- investment, Québec’s aerospace sector has 50% of them have not yet started to train.” bec’s aerospace industry on a global scale; become a key economic driver for the re- As with its other OEM peers, CAE places a many local suppliers have used these rela- gion. “The aerospace industry is recognized heavy focus on R&D, investing more than tionships as stepping stones to the interna- for creating high quality jobs, generating C$1.3 billion over the past 10 years. tional markets. “We invest in our suppliers steady R&D investments and stimulating by developing them and providing them exports,” underscored Marcil. “This results with green belt training sessions,” explained in significant economic benefits for both Selecting suppliers Parent. “We use the Aéro Montréal MACH governments and society. In fact, since program for supplier development in order Bombardier entered the aerospace sector in The industry is currently transitioning from to increase competencies and the ability to 1986, the company and its employees have a bullish market, where huge orders were se- drive joint cost-reduction initiatives.” been the source of almost C$18 billion in cured for new aircraft in development, to a Citing quality as the most important factor government revenue through direct program bearish one in which OEMs are focused on in selecting a supplier followed by cost, Par- repayments and taxes paid. This is why a ramping up production at an unprecedented ent continued: “Thirdly, we look for suppli- growing number of countries compete to scale to meet order books, rather than on ers that can deliver subassemblies involv- grow their local aerospace industry and at- new aircraft sales. As a result, OEMs are ing mechanical parts, electrical wiring and tract foreign aerospace investments.” experiencing pressures on their margins, electronic equipment. Fourth, as a signatory Government support is essential for a thriv- translating into cost pressures across the en- to the UN Global Compact, we are taking ing industry and has played a part in at- 27 tire supply chain. “OEMs have spent heav- steps to ensure responsible procurement… tracting new business to the region as well ily on developing their current programs Social and environmental factors are consid- as supporting its existing ecosystem. For and there are no new ones in development, ered alongside financial factors when mak- example, Bell Helicopter Textron recently so they have reached a period of the busi- ing procurement decisions and are detailed decided to locate its Bell 505 operations in ness cycle where they are not selling many among the criteria used for supplier selec- Québec over Louisiana, United States. “The new planes,” commented Sylvain Boisvert, tion. Finally, supplier innovation is captured first consideration is the expertise developed general manager at Safran Engineering through appropriate partnerships with rel- within the region through the years, and the Services. “For this reason, they are focus- evant subcontractors.” access to talent we have in Canada… Sec- ing on productivity, which translates to cost In order to compete in today’s environment, ond is the support offered by the government reductions. Safran Engineering Services has suppliers must meet global standards and here in Québec and Canada at large,” noted therefore received a lot of demand from Tier measure up against international players on Cynthia Garneau, president at Bell Helicop- 1s for assistance with improving profitabil- aspects such as quality, cost and delivery ter Textron Canada. “We get more attention ity through weight reduction and identifying time. The government and key organizations here than companies in the United States be- other cost saving measures.” such as Aéro Montréal are therefore focused cause the sector’s economic impact is pro- Concurrently, in recent years, OEMs have on increasing the competitiveness of region- portionally much greater.” shown a clear preference for long-term con- al players through initiatives such as Aéro Supported by the broader ecosystem with tracts rolled out to fewer, often larger sup- Montréal’s MACH program. The MACH an increasing emphasis on collaboration, pliers that can offer integrated services due initiative aims to strengthen the supply chain Québec’s OEMs continue to drive the re- to the efficiency gains that can be secured. structure by creating special collaboration gion’s aerospace industry through economic “Our priority is finding suppliers that are links among customers and suppliers. Ini- impact and access to global markets. Gov- very cost-competitive and agile in meeting tially deployed in 2011 over five years un- ernment provisions will continue to play an market demands,” emphasized Cynthia Gar- der Bombardier’s mentorship, in December important role in the success of Québec’s neau, president at Bell Helicopter. “Proxim- 2016, Aéro Montréal received C$2 million aerospace industry and, reflecting the grow- ity is also important for us.” in financial support for the initiative. ing importance of SMEs as a source of in- In today’s globalized environment, there is novation, there will be a more equal focus often a better business case for establishing on smaller companies going forward. In an supply chains closer to the export market or Government support increasingly global industry, continuing to in lower-cost jurisdictions. “We transferred foster a competitive supply chain in Québec the build of all of our cabins and wire har- The government plays a key role in sup- will be key in ensuring heightened economic nesses to our facility in Chihuahua, Mexico, porting the industry, recently investing return from the region’s OEMs. ▬
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tling with activity. More than 2,000 Bom- Complementing our footprint in Canada bardier employees are currently focusing with facilities abroad enables us to harness on ramping up C Series production. the comparative advantages they can offer, enhancing our competitiveness. It can also Where else is Bombardier currently fo- help us gain greater market access, creat- cusing its resources? ing new opportunities for growth at home We refocused our resources on the devel- and across our global network of sites. It is opment of the Global 7000: Bombardier’s not a zero sum game – quite to the contrary new ultra-long range business jet. This – developing global value chains is critical aircraft has four distinct living spaces and to make our Canadian operations more ef- a wing designed to optimize performance ficient and to keep Bombardier among the while ensuring a perfectly smooth ride, world’s top three aerospace players. even at a speed of Mach 0.925. As of Sep- tember 2017, we had three flight testing In today’s research and development vehicles in flight testing. The aircraft had environment, a great deal of innovation already reached its maximum altitude and is arising from universities and SMEs. a speed of Mach 0.995. How open is Bombardier to collabora- Olivier The Global 7000 is on track to enter into tion? service in the second half of 2018 as Bombardier is, by far, the top R&D inves- planned. Meanwhile, we are also expand- tor in Canada and invested more than C$6 Marcil ing our Global Completion Centre in Mon- billion in R&D in the past 10 years. In tréal, where the design, manufacturing and our Québec aerospace operations, we are installation of passenger interiors of the actively participating in close to 20 col- Vice President, External Relations new aircraft will take place, creating near- laborative projects involving universities, BOMBARDIER ly 1,000 jobs. SMEs and other industry players.
HQ location: Montréal, QC The Québec government has shown a Could you outline Bombardier’s main 28 Other office locations: Dorval, Mirabel and great deal of financial support for Bom- objectives over the next few years? Saint-Laurent, QC; Toronto, ON; Belfast, United Kingdom; Wichita, United bardier’s C Series. Could you elaborate In 2015, Bombardier launched a five-year States; Querétaro, Mexico; Casablanca, on the importance of the government in turnaround plan that aims to transform this Morocco (aerospace only) driving the industry? company into a US$25 billion business Company type: The aerospace industry is recognized for with a 7% to 8% EBIT margin by 2020. original equipment manufacturer creating high quality jobs, generating To reach these objectives, we first de- Key products and services: business aircraft, commercial aircraft, aerostructures and engi- steady R&D investments and stimulating risked the company by securing the right neering, services, rail transportation solutions exports. This results in significant eco- level of liquidity to execute our plan. We Key industries served: Aerospace: 53%; Rail nomic benefits for both governments and then turned our focus to building our earn- Key aerospace customers: society. Since Bombardier entered the ings power and cash flow. To get there, we Business aviation: 65%; Commercial aviation: 30%; aerospace sector in 1986, the company and are driving an operational transformation Aerostructures and Engineering Services: 5% its employees have been the source of al- across Bombardier, tackling all aspects of Exports: 84% most C$18 billion in government revenue cost. This will enable us to translate the through direct program repayments and significant investments we made in our taxes paid. new commercial and business aircraft into Bombardier is a Canadian multinational higher margins and to deleverage the com- and one of the world’s leading aircraft There is often a stronger business case pany’s balance sheet. manufacturers. for OEMs in receipt of government in- On the revenue front, two of the largest vestment to offshore. How should the growth drivers will be the C Series and Could you update us on the C Series balance be managed so that the region’s the Global 7000 aircraft. Our Commercial highlights and the significance of the ecosystem sees maximum return? Aircraft team is currently ramping up pro- program to the region? While Canada represents less than 10% of duction to meet our target of 90 to 120 C The performance and reliability of the air- Bombardier’s revenues, we have a strong Series aircraft deliveries per year by 2020 craft have been outstanding so far, with footprint here with over 21,000 employ- and at Business Aircraft, all hands are on more than 1.5 million passengers flown on ees, including more than 15,000 in Qué- deck to bring the Global 7000 aircraft more than 100 routes and airBaltic operat- bec. This reflects our 75-year history and into service in the second half of 2018, ing the aircraft up to 17 hours per day. Fol- our strong commitment to this country. It as planned. Additional growth will come lowing this successful entry-into-service also enables us to leverage Canada’s com- from Bombardier Transportation, our in Europe, the C Series will make its Asian petitive strengths, such as strong R&D ca- US$8-billion rail transportation business, debut later in 2017 with Korean Air. In pabilities, world-class engineering talent which has a healthy order backlog of more parallel, our facilities in Québec are bus- and high-value manufacturing. than US$32 billion. ▬
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Bell Helicopter is a manufacturer of commer- and follow us where we are heading in terms cial and military helicopters headquartered in of technology. the United States with operations in Mirabel One area of opportunity lies in automation as and is counted amongst Québec’s “Big 4” our implementation is limited. We intend to OEMs. work closely with our suppliers to improve our manufacturing processes and capabilities Could you introduce and contextualize Bell through automation. Helicopter’s Mirabel operations? Our business in Mirabel is focused on com- Bell Helicopter recently decided to locate mercial helicopters, currently the 505, 429, its 505 operations in Québec over Louisi- 412 and 407 programs. The aircraft we build ana, United States. What motivated this here are specific to our facilities and not man- decision, and what are the advantages of ufactured by any other division worldwide. operating in Québec? Encompassing the full spectrum of a helicop- The first consideration is the expertise devel- ter’s lifecycle, our capabilities span design, oped within the region through the years and product development, building of prototypes, the access to talent we have in Canada. We flight-test activities and certification, working have universities with very strong aerospace Cynthia very closely with Transport Canada for certifi- portfolios. Whilst we are only a 900-person cates and validation-type certificates with the company, we have close to 40 interns this year FAA, YASA, and other international airwor- and we are focused on developing and retain- Garneau thiness authorities. ing talent. A large ramp up can be problematic without securing the right talent for the future. How strong is current demand, and where Second is the support offered by the govern- President do you see the greatest growth opportu- ent here in Québec and Canada. We get more BELL HELICOPTER nity? attention here than companies in the United TEXTRON CANADA Demand has been very stable for the last three States because the sector’s economic impact years, although not as high as it has been in is proportionally much greater. When we an- HQ location: Fort Worth, Texas, USA the past. Right now, we mainly work on the nounced the 505 relocation from Louisiana 29 Other office locations: day shift, which is the appropriate schedule to Mirabel the timeline was astounding. Our Training Academy in Fort Worth, Texas, USA Advanced Composites/Rotor Systems/Drive given the market demand. However, we have CEO raised the idea on a Friday, requested a Systems/Flight Research Centers in Texas, USA the capacity to increase to a second or third- meeting with the Québec government on the Assembly Centers in Amarillo, Texas, USA; in shift opportunity, if required. We are very ag- Tuesday and a month later we had a done deal, Lafayette, Louisiana, USA and in Chihuahua, ile when it comes to meeting market demand bringing an additional 100 jobs to the region. Mexico. and always able to adjust with little impact to Suppy Center in Calgary, Canada Many sales, support and service Centers and the workforce. Bell Helicopter recently unveiled its FCX- Customer service facilities around the world The biggest opportunity for us is with the 505. 001 aircraft. What are some other areas of Key products and services: We are starting delivery of the first aircraft, R&D focus? Focus on commercial helicopters: assembly transforming the backlog of 400 letters of in- The concept aircraft unveiled at HAI Heli- and composite parts manufacturing, product development, flight testing, customization and tent into firm orders. Market demand remains Expo in March 2017 has many innovative customer support. strong for the 407, 429 and 412 and we see aspects, including a rotorless tailboom and Key industries served: Aerospace increasing demand for the 429 in particular. an electric motor as part of a hybridized pro- Key aerospace customers: For Bell Helicopter pulsion system. Aside from the FCX-001, as a whole: 64% military, 36% commercial (Util- ity, Corporate, Private, HEMS, Parapublic, Oil What are Bell Helicopter’s priorities when there is increasing interest around UAVs and and gas, etc.) it comes to selecting suppliers and how optionally-piloted aircrafts. At Uber’s 2017 Exports: 90% should companies differentiate themselves? Elevate Summit in Dallas, we announced our (for Bell Helicopter Textron Canada) Our priority is finding suppliers that are very partnership with Uber on developing the air cost-competitive and agile in meeting market taxi of the future. The 525 is also currently in demands. Proximity is also important for us. development and to be built in Emerald, Texas We recently transferred the build of all of due its large size. Following the unfortunate our cabins and wire harnesses to our facility event of last year, we put our flight test on in Chihuahua, Mexico, transferring our sup- hold but we hope to resume our flight opera- ply chain along with it. We now have much tions as soon as NTSB releases its report. The more of a Mexico-focused supply chain in V-280, the next generation of tilt rotor, is go- these areas. Similarly in Québec, as we look ing well and is focused right now on the U.S. towards the next generation of helicopter and Future Vertical Lift (FVL) military program. next commercial program, we will be build- We spend approximately C$25 million every ing a strong Canadian supply chain, looking year on R&D, and our Mirabel operations are for companies that can match us in innovation very much integrated into the strategy. ▬
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Pratt and Whitney Canada is a leading en- ing, automated in-process inspection, self- gine manufacturer and is counted amongst compensation, robotics and advanced line Québec’s “Big 4” OEMs. health monitoring. We are pushing towards predictive maintenance across our opera- Celebrating its 90th year of operation in tions. 2018, Pratt & Whitney Canada is well These technologies also require a completely established both within Québec’s ecosys- different skillset for our employees. We have tem and worldwide. Could we begin with moved from traditional machinists, inspec- a brief introduction to P&WC today and tors and maintenance technicians to highly any major updates since we met in 2015? trained cell leaders with multi-disciplinary In April 2017, we produced our 100,000th skills for problem-solving. We also need engine. Today, we have upwards of 60,000 engineers who are skilled in mechatronics, engines in service in over 200 countries and automation and metrology. We are working territories, on 14 different families of engines with local schools to adapt their programs to for everything from helicopters to APUs. our needs. Our PurePower® PW800 engine, now certi- fied, is meeting and exceeding all of its per- When it comes to P&WC’s supply chain, Maria formance expectations. Inaugurated in 2010, is the Québec ecosystem still considered the Mirabel Aerospace Centre is now moving very competitive? at a very good pace and our Advanced Man- What makes the Canadian and Québec aero- Della Posta ufacturing Center, which manufactures parts space sector unique is our philosophy and vi- for the PW800 and NGPF engines, is ramp- sion around promoting industry and research. ing up production. In 2015, we welcomed With the support of government, we are able Senior Vice President the Auxiliary Power Units (APUs) business, to export 90% of our products. We have PRATT & WHITNEY CANADA adding almost 10,000 engines to our fleet. great schools and institutions to work with (P&WC) Our APUs can be found in nearly every large and a favorable operating environment. The airline in the world. government’s innovation strategy has clearly 30 Additionally, we have launched a whole been a part of our investments in advanced new suite of digital engine services. One is a manufacturing. The Canadian ecosystem is a HQ location: Longueuil, QC brand new customer portal, MyP&WC Pow- basis for our growth and our future. Other office locations: er; another is additional functionality in our Lethbridge, Halifax, Mississauga, Ottawa, Mirabel, St-Hubert, Kalisz, Rzeszow, Shanghai, engines' capabilities–almost 8,000 of the en- Going forward, what are the key ob- Singapore + many other locations worldwide gines in service today have full engine health jectives and the next areas of focus for Company type: Gas turbine engine design, management and communication capabili- P&WC? manufacturing, services ties. We also have a new Oil Analysis Tech- Our mission is to continuously inject tech- Key products and services: Gas turbine en- gines, sales, repair and overhaul services nology, which gives high visibility into the nology into all of our product lines. We are Key industries served: 100% aerospace health and efficient operations of the engine working on the next large PT6 for general Key aerospace customers: Business aviation, without intrusive inspection. These technolo- aviation and civil helicopters and have a big general aviation, regional turboprops, civil gies allow us to be more proactive with our effort afoot to inject new technology in all helicopter, auxiliary power units, military, after- market services customers, while helping them move toward of our platforms. A consistent focus for us is Exports: 88% more fully planned maintenance environ- developing next generation engines, which ments and providing insights to pass on to we are currently working on. We will con- our engineering organization to develop bet- tinue to bring a high level of capability in ter next-generation products. Other areas of technology to all of our facilities in Canada great investment are product lifecycle man- and worldwide. agement (PLM) and other systems and tech- When it comes to serving our customers, nologies that position us well for the future. our simple mission is "Performance. Per- sonal. Guaranteed." More customization will What are P&WC’s greatest focus areas also be the way of the future. Our focus is for process innovation? on bringing in different levels of customiza- For the past few years, we have been devel- tion and transforming our business model oping advanced manufacturing and automa- in line with global trends. We also play a tion, moving from automating machines to leadership role in establishing the direction building fully automated production cells of some of the Canadian aerospace cluster which machine complex components end- initiatives. We need to join forces to ensure to-end. We have three new cells in Québec we have what it takes to bring our vision to and others in our facilities around the world. reality and promote Canadian aerospace on These cells incorporate closed door machin- the world stage. ▬
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports INTERVIEW
CAE is a global leader in modelling, simu- Over the next 10 years, IATA forecasts that lation and training for civil aviation and passenger trips will grow by more than 4% defense, offering cadet to captain training yearly, meaning the commercial aviation solutions. industry will double over the next 20 years. Airlines will need more pilots. In fact, at the CAE is celebrating its 70th anniversary Paris Air Show, we introduced our first-ever this year. What are some of the defining CAE Airline Pilot Demand Outlook to the characteristics of the company today? market. It indicates that more than 255,000 Training is all we do and innovation still de- pilots will be needed in the next 10 years fines who we are. We operate more than 65 and that over 50% of them have not yet training centers and flight schools around started to train. the world and train more than 120,000 pi- New and innovative pilot career pathways lots annually. We continue to be the leader and training systems will be required, in the sale of flight simulators. Today, we which is great news for CAE. are truly a training services company with 60% of our business coming from our ser- What are CAE’s current areas of focus in vices vs products. terms of R&D? Marc One of the key elements will be how we le- This year, CAE announced a number of verage existing technologies and big data to large aviation training contracts. Could create training programs that are tailored to Parent you expand on some of these? the specific needs of each pilot. We call that We recently announced our fiscal 2017 re- adaptive training. If the data shows that the sults; it has been one of the best years in pilot has problems in landing with cross- President & CEO our seven-decade history. We expanded winds, for example, the training program CAE our relationships with customers around will focus on this aspect until it is mastered. the globe. In Civil Aviation Training Solu- tions we continued to lead the market with The aerospace industry is embracing In- a near-record year of 50 full-flight simula- dustry 4.0. How is CAE keeping up with 31 tors sold and in training services we signed these trends? HQ location: long-term contracts with Jet Airways in CAE’s global leadership in training comes 8585 Cote-de-Liesse Saint-Laurent, Quebec India, Vietnam Airlines and Korea Airports in large part from our commitment to invest Other office locations: Corporation, among others. in both technological and operational inno- 160 sites in over 35 countries Our Defense & Security business secured vation. CAE is a 4.0 company, well posi- Company type: Training products and services major long-term training contracts in which tioned to leverage the current technological Key products and services: Training and simu- lation, in-service support and crew sourcing CAE provides the full solution–we call revolution. We are embracing new digital Key industries served: these Training Systems Integrator (TSI) technologies such as big data, artificial in- Aerospace, defence and healthcare contracts. In fact, we ramped up orders by telligence and machine learning at a fast Key aerospace customers: 40% for a record US$1.4 billion contracts speed. Our annual Innovation Challenge Civil aviation: 58% of revenues this year. Our innovative approach enabled initiative, launched in 2012, leverages em- Defence and security: 38% of revenues Healthcare: 4% of revenues (2017 figures) us to win the contract to create the U.S. ployees’ creativity to spark winning ideas Exports: 90% Army’s new fixed-wing training center and that often evolve into concrete improve- program, which we inaugurated ahead of ments and new products. This helps us to schedule. Other defense contracts include harness the value of the digital world. This a 20-year naval training program for the year, we received more ideas than ever be- United Arab Emirates and a contract for fore, with submissions focused on cloud the French Air Force Initial Flight Training. computing, cybersecurity, new training me- We also won key national programs with dia and the environment. the Fixed Wing Search and Rescue Airbus C295 training program for the Royal Ca- Could you outline CAE’s main objectives nadian Air Force where CAE will provide over the next three to five years and the the training center, flight training devices, overall vision for the company? courseware and instructors. In addition, we Over the last couple of decades, CAE has extended our NATO Flying Training Centre established itself as a thought leader in program, which we deliver here in Canada, aviation training and we are now bringing to 2023. to market some of the most innovative and comprehensive solutions that we believe How is demand for skilled personnel de- will enable us to unlock a greater portion of veloping? the civil aviation training market. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations EDITORIAL Global Business Reports
Image courtesy of CAE Crossing borders: Québec’s outward facing aerospace supply chain
Despite standing out as a self-sufficient hub of activity, Québec’s aerospace ecosystem is far from contained. Not only is the prov- “ ince well connected nationally, the region also exports 80% of its production either The government is aware of the 32 directly or indirectly. Aerospace is, in fact, the number-one export driver in Québec, challenge; the clock is ticking on a lot which is significant considering exports ac- of the smaller suppliers. Their reliance count for 50% of Québec’s GDP. Of these on a very local OEM customer base exports, 40% are to the rest of Canada and, is a big vulnerability, so they need of the remaining 60%, the biggest export to penetrate international markets market is the United States. outside the Québec cluster. For Strong export strategies are particularly the cluster to evolve, the smaller important for SMEs for two main reasons. companies need to be supported Firstly, in today’s globalized environment, in addressing these challenges. The companies along the supply chain are able Québec Government as well as to source suppliers with fewer geographic Canada are very aggressive in helping restrictions and are therefore able to pursue to promote companies and assist competitive offers more freely. Secondly, in response to OEM demands for fewer sup- them in penetrating new markets. pliers, SMEs must grow and extend their Government officials are not sticking capabilities. SMEs therefore need to be big- their heads in the sand and ignoring ger and more robust; growth is only possi- the problem. ble by winning more contracts, so it follows that SMEs must look further afield than their domestic market. Equally, by com- - Stephen Kearns, peting more actively internationally, com- President and CEO, panies can further raise their visibility on Avior (Produits Intégrés) their home turf. “Suppliers in Québec need to break out of the Québec bubble,” com- mented Stephen Kearns, president and CEO at Avior (Produits Intégrés). “It is a major challenge as this takes considerable time and investment. It makes sense for suppli- ers to diversify their customer and program base and move up the food chain towards
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports” Global Business Reports EDITORIAL
more integrated structures, which will come dealing with countries such as China and is from exports. Companies remaining at the therefore better positioned to support com- Tier 4 level will need to develop new cus- panies entering these regions.” “ tomers which includes emerging Tier 2 sup- The true impacts of a reformed NAFTA are There is no question that relations pliers such as Avior.” still under a great deal of speculation and, Avior is a full-service manufacturer of considering Canada has had a longstand- are getting tougher with the United lightweight structures and complex me- ing free-trade environment with the United States. However, counterparts in chanical assemblies aiming to become a States even prior to NAFTA, the relation- states such as New York, Texas, Tier 2 supplier by building a track record ship is unlikely to be uprooted. In addition, Hawaii, Pennsylvania and Maine have of performance and innovation, investing whilst the U.S. trade deficit is large, in the made it clear that they want to keep in 3D printing technology and robotics, for region of US$46 billion, less than 2% is as- current commercial agreements in example. sociated with Canada. place because they see the benefits. In light of Québec’s export orientation, “Changing trade dynamics is the biggest The Canadian and the U.S. economies companies and government organizations challenge facing the global industry,” noted are highly integrated–a finished will be keeping a close eye on interna- Alain Ricard, head of the transport team at product may have crossed the border tional trade dynamics. For the province as Norton Rose Fulbright. “However, the trad- five times during development. In a whole, 20% of GDP is tied to exports to ing relationship between Canada and the addition, whilst the U.S. trade deficit the United States. As a close neighbor, the United States is very intertwined. Whilst country is often first in mind for companies there is currently a lot of rhetoric about is huge, the percentage associated wishing to expand their footprint. “As half renegotiations of trade deals, in the end it with Canada is very low at less than of our [aerospace] production is exported would achieve little because the trading 2%. NAFTA has been in place for to the United States, we are very tied into relationship between the United States and some time, and a degree of adapting the U.S. economy, which is quite cyclical,” Canada is already well balanced in terms could in fact be beneficial to all 33 explained Alexandre Faria, vice president, of advantages and disadvantages for both parties. business development at Export Devel- countries. The industry will remain highly opment Canada (EDC), Canada’s self-fi- globalized, despite any policy hurdles that nanced export credit agency. “Any changes may arise.” - Dominique Anglade, to NAFTA would have a huge impact on As with customer portfolios, diversification Minister of Economy Québec companies. Since we do not know across different markets is key in order to Science and Innovation, where the negotiations will lead, diversifi- mitigate arising risks across different bor- Québec government cation is the way to avoid challenges later ders. “Diversification of markets is always on. It is essential that the SMEs increase good for the industry,” added Ricard. “This their participation in both local and global trend, along with the move towards con- supply chains.” solidation in order to gain a bigger share of With representation across the globe, the global market, should prevail no matter ” EDC’s role is to facilitate trade between key what political disruption occurs or not.” buyers with Québec companies, regularly Other organizations such as the Centre de creating a financing pool for the buyers and recherche industrielle du Québec (CRIQ) leveraging these relationships to identify help manufacturers achieve compliance procurement opportunities from Canada. with regulations across export markets, In addition, EDC also supports foreign di- with a dedicated facility in Montréal that rect investment (FDI) for companies with can conduct more than 1,000 tests to ensure a subsequent export angle. Commenting on conformity with all required export mar- further regions of focus outside of North kets. Government agencies such as Export America, Faria continued: “With the CETA Québec provide further export services. agreement imminent, Europe will be a key Companies across the supply chain will market for us to focus on. Mexico is another continue to focus on export markets with area of focus. Market growth in Asia is im- encouragement from Québec’s govern- mense, so more companies are looking to ment. Not only does this foster greater supply or invest into the region. The key to competitiveness among suppliers in the success is in choosing the right partner, the region, but of course drives the industry’s right place to be established and protecting reputation on the international stage, attain- patents. EDC is getting more experience in ing greater market share. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations FACTSHEET Global Business Reports
QUEBEC EXPORTS TO THE UNITED STATES AEROSPACE EXPORTS BY REGION
Source: Desjardins Source: AIAC / Statistics Canada CANSIM and Trade Data Online (2015) United States South and Central America Exports Imports Trade balance Close to 80% of aerospace In curent C$M Europe Middle East manufacturing was exported 70,000 Asia Paci c Africa 2% 2% 60,000 3% Aerospace was twice as trade diverse* as the manufacturing 50,000 12% sector.
40,000 Aerospace export intensity** was 30,000 55% higher than that of the manufacturing sector average.
20,000
2015 Aerospace exports grew 54% 10,000 between 2010 and 2015. Exports to the Asia Paci c market registered 0 21% the highest growth (+105%) during 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 60% that period.
* Trade diversity refers to the share of total exports to non
34 ** Export intensity: Exports/Shipments Alexandre AEROSPACE EXPORTS BY PRODUCT CATEGORY
Source: AIAC / Global Trade Atlas Faria Supply Chain Related
VP Business Development Close to 55% of aerospace Airplanes & Rotorcraft EXPORT DEVELOPMENT product exports were supply Simulators CANADA (EDC) chain related* 3% 50% Engines**
Established over 70 years ago, Export De- ping out of their comfort zone. EDC’s role is What are the objectives for EDC over velopment Canada (EDC) is Canada’s self- to help these SMEs grow to a certain level the next three to five years? financed export credit agency. for them to be able to serve the larger com- Our aggressive goal is to grow our clientele panies in the way that they expect. from 7,000 to 30,000 customers. We want Have export strategies changed recently to help as many companies as possible with 16% Avionics in line with greater demands from po- How do you ensure that exporting com- knowledge and services to truly support tential customers? panies still have the appropriate eco- their needs. We are looking into differ- Québec has a highly-diversified economy nomic impact in the Québec region? ent approaches, such as financing tooling. 13% Landing Gear** and 20% of our GDP is related to export. Companies we support must have a footprint Companies are facing pressure to support 43% Within that, manufacturing represents 90% in Québec. They must already be established development costs, which is a challenge for 2015 54% of the region’s exports. Since more OEMs here and contribute to Québec employment. SME’s. We are recognizing a need to assess 21% Other Pars are asking for fewer suppliers, SMEs need If they are opening business elsewhere, it our current offerings and look for innova- to be solid and be able to provide what the must be another arm of their company here. tive solutions that are aligned with the way OEMs are asking for. To achieve success, We have not experienced difficulty in estab- in which the sector is changing. Our goal is SMEs must be bigger, stronger and more lishing a balance because exporting makes to continue identifying gaps that we can fill; competitive. Québec’s companies are very Canadian companies stronger, more innova- cash flow is the key component for compa- * See Annex Table 5 for details of exports by competitive and our currency helps. Nev- tive and increases their sales. In the end, the ny growth, so we step up when we can. ▬ product category ertheless, Québec companies prefer to deal integrated processes should make the com- ** Engines and landing gear include their with companies close by rather than step- pany more competitive worldwide. respective systems and components
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports FACTSHEET
QUEBEC EXPORTS TO THE UNITED STATES AEROSPACE EXPORTS BY REGION
Source: Desjardins Source: AIAC / Statistics Canada CANSIM and Trade Data Online (2015) United States South and Central America Exports Imports Trade balance Close to 80% of aerospace In curent C$M Europe Middle East manufacturing was exported 70,000 Asia Paci c Africa 2% 2% 60,000 3% Aerospace was twice as trade diverse* as the manufacturing 50,000 12% sector.
40,000 Aerospace export intensity** was 30,000 55% higher than that of the manufacturing sector average.
20,000
2015 Aerospace exports grew 54% 10,000 between 2010 and 2015. Exports to the Asia Paci c market registered 0 21% the highest growth (+105%) during 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 60% that period.
* Trade diversity refers to the share of total exports to non
** Export intensity: Exports/Shipments 35
AEROSPACE EXPORTS BY PRODUCT CATEGORY
Source: AIAC / Global Trade Atlas Supply Chain Related
Close to 55% of aerospace Airplanes & Rotorcraft product exports were supply Simulators chain related* 3% 50% Engines**
16% Avionics
13% Landing Gear**
43% 2015 54%
21% Other Pars
* See Annex Table 5 for details of exports by product category
** Engines and landing gear include their respective systems and components
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations Image courtesy of Mecaer GBR • Industry Explorations • QUÉBEC AEROSPACE 2017 FROM THE GROUND UP: AIRCRAFT BUILDING BLOCKS
“Consolidation will continue and Aéro Montréal encourages this trend. SMEs are currently too dependent on a limited number of customers; moreover, OEMs are no longer buying directly from SMEs but instead from integrators mostly located outside of Canada. Because SMEs must sell to international integrators, Aéro Montréal assists them in their internationalization strategies by encouraging them to integrate and adopt Industry 4.0 technologies.ˮ
- Suzanne M. Benoît, President, Aéro Montréal EDITORIAL Global Business Reports
A New Order: Québec’s supply chain reaches turning point
38
Alongside the Big Four OEMs and Tier 1 in the Tier 1 and Tier 4 levels and more integrators, Québec’s aerospace cluster is broadly amongst the region’s SMEs. Many home to over 200 SMEs occupying dis- smaller companies lack the capacity and “ tinct niches in manufacturing and sub-as- resources to truly meet demands for more sembly and making a significant contribu- integrated services and evermore cost-ef- Consolidation is likely to continue into tion to the sector’s economic impact. The fective solutions but also lack the invest- the future and has been a continuous large number of SMEs reflects the entre- ment capital to address these areas. Unable trend at the Tier 1 and Tier 4 levels. preneurial nature of the cluster, which has to grow rapidly and significantly increase This creates pressure on the industry developed around a private market unlike their international presence, these compa- from both ends: the customers will many rival clusters around the world. nies are likely to either be bought up or continue to demand price reductions The industry is currently transitioning drop out of the market. Companies along and the raw material suppliers from a bullish market, where huge orders the supply chain with sufficient capital are increasing costs because they are were secured for new aircraft in develop- likely to make acquisitions to increase ca- bigger and more powerful. In turn, ment, to a bearish one in which OEMs are pacity to take on more customers or larger this creates difficulty for Tier 2 and focused on ramping up production at an contracts or add capabilities to offer a will make it increasingly difficult for unprecedented scale to meet order books, more complete solution. SMEs to remain competitive and stay rather than on new aircraft sales. As a re- Consolidation within the industry is not sult, OEMs are experiencing pressures on a new theme but the trend is certainly in the market at all. their margins, translating into cost pres- increasing and having more pronounced sures across the entire supply chain. Con- effects. “The industry has talked about currently, in recent years, OEMs have consolidation for 25 years but it has not - Claude Baril, shown a clear preference for long-term happened before,” commented Chris Managing Director, contracts rolled out to fewer, often larger O’Neill, president and COO of Mecaer STELIA Aerospace suppliers that can offer integrated services America, a division of the Italian supplier North America due to the efficiency gains that can be se- of integrated landing gear systems. “The cured. demands of OEMs are becoming more so- Largely because of these trends, Québec’s phisticated every year. This makes it hard- aerospace supply chain is undergoing an er for smaller suppliers to compete, which evolution marked by consolidation with- will cause further consolidation.”
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports” Global Business Reports EDITORIAL
Commenting on the resulting reduction in nies to work on contracts for which they ment that has seen the most recent growth. available work, O’Neill continued: “Ev- might not otherwise have the resources. Companies offering solutions to accelerate ery momentous change in business allows Alongside industry-led projects run timelines, increase efficiency and reduce for both opportunity and concern. We will through the Consortium for Research costs are generally in strong demand. find a way to exploit this opportunity but and Innovation in Aerospace in Québec Montréal-based AV&R which specializes the impact on smaller companies produc- (CRIAQ), there are initiatives such as in automation and robotics has an order ing manufactured parts will be more pro- SAGE and now SA2GE, launched by Aéro backlog of over five years, for example. nounced. They will either need to integrate Montréal to develop parts and systems Whilst the benefits of these technologies or will be forced to drop out of the mar- in a more environmentally-friendly way. are clear, the upfront investment can be ket.” The initial program, launched in 2011, in- problematic for SMEs and does not present Mecaer America is focusing on diversi- volved 27 SMEs, five universities and four a strong business case if volumes are low. fying its client base utilizing Aéro Mon- R&D centers with contributions of C$150 However, through initiatives like MACH tréal’s MACH initiative to reach this goal. million from the Québec government and FAB 4.0, Aéro Montréal and the Québec The initiative aims to encourage compa- private companies across five R&D proj- government are promoting SMEs’ uptake nies, particularly SMEs, to develop more ects. Phase two of the program, launched of Industry 4.0 processes, such as automa- integrated services and better identify and in 2016, is in fact led by the SME TeraX- tion, robotics, additive manufacturing and serve the needs of OEMs and Tier 1 inte- ion. internet of things (IOT), to increase their grators. After safety, the two themes at the center competitiveness, particularly against inter- SMEs’ awareness of the need to better of innovation in commercial aviation are national rivals. Equally, supporting com- align themselves with the demands of their efficiency and cost reduction (without a panies in their export strategies means in- customers has driven numerous acquisi- tradeoff on quality). Indeed, whilst much creased volumes, making automation and tions since 2015. For example, PCM IN- of the industry is experiencing slower de- implementation of robotics more feasible. NOVATION acquired TechFab in April mand, it is the engineering services seg- By increasing operational and cost effi- 2016 to form a small integrator focused ciency, SMEs will improve their competi- on tooling and Sinters America purchased tiveness by better serving OEM’s needs DCM Group in December 2015 to form an and narrowing the cost gap with lower- integrated design and components manu- “Over the last five years, OEMs and cost jurisdictions. Uptake of these process- facturing company. “The objective of the es is therefore essential for SMEs to retain 39 Tier 1s transferred parts of their acquisition is an integral one and one that their position in the market. The support is difficult to accomplish: we needed a supply chain responsibility to Tier offered by Aéro Montréal and the Québec stronger base in order to win confidence 1s and some Tier 2s. However, some government further cements continued from the OEMs and Tier 1 suppliers. We Tier 1s and Tier 2s do not have the investment into this area and widespread therefore decided we needed to exert more supply chain maturity to receive these implementation of these technologies. control over our supply chain than we had transfers from their customers. Some With this focus, Québec is set to sustain a been so we chose to grow vertically and SMEs do have this maturity, which more efficient and competitive SME net- horizontally,” stated Éric Ledoux, DCM is why they are growing faster than work, although continued consolidation is Group’s president and CEO. the others. On the opposite side, still to be expected to address demand for With market conditions becoming more OEMs and Tier 1s need to help their integrated services. and more challenging, companies must subcontractors in order to support tick all the boxes to get a seat at the table. their cost reduction initiatives. Gaps in the market The supply chain is not changing; it has changed. We must see the Identifying opportunity Presently, the vast majority of Québec’s supply chain as a global entity and approximately 15 integrators are foreign In this environment, it is difficult for new not just buying parts, creating real companies. These include Airbus subsid- players without a longstanding reputation partnerships with suppliers. iary Stelia Aerospace, which supplies part to enter the market without a breakthrough of the fuselages for the Bombardier Global technology. However, as OEMs increas- - Real Julien, 7000 and 8000 business jets, and Bel- ingly look to start-ups and universities for President, J2 Procurement gium’s Sonaca, which manufactures wing new technologies, there are opportunities panels and stringers. However, there is a available for those offering something gap in the market for Tier 1 integrators that unique that offers measurable value or ben- can provide services such as flight control efit. Collaboration is at the heart of many systems, power and distribution electric new development programs, furthering in- systems, hydraulic systems, fuels systems novation through combined effort among and air management systems. companies that once saw collaboration as Given the market is heavily skewed to- a competitive disadvantage. These models wards SMEs, it would be a challenge also provide a platform for smaller compa- for Québec’s companies to fill this gap.
Global Business Reports QUÉBEC AEROSPACE 2017 ” Industry Explorations EDITORIAL Global Business Reports
“ We need to bring more integrators to Québec, such as subsidiaries of large foreign companies. This will bring opportunities for our SMEs and foster supply links with our OEMs. Québec also needs to invest more in showcasing its capabilities to the global market and allocate more resources to help SMEs accelerate the digital shift.
- Suzanne M. Benoît, President, Aéro Montréal
“SMEs in Québec typically have rev- example Stelia North America, which” enues of between C$5 to 10 million, whilst focuses on the design, development OEMs are demanding to work with C$100 and fabrication of advanced composites to C$200 million businesses,” commented structures, was formed through the merger Guillermo Alonso, president of Montréal- of France-based Airbus subsidiaries based SME Alta Precision, an international Sogerma, which owned Canada-based leader in supplying build-to-print landing Composites Atlantic, and Aerolia. gear assemblies and sub-assemblies for the military and commercial aerospace 40 markets. The future of the supply chain A potential solution is the consortium model which has seen a great deal of up- As supply chains become increasingly take in European countries such as Italy globalized and the world becomes smaller, and France. By collaborating and com- Québec’s aerospace sector will be marked bining capabilities, companies are able to by consolidation as companies strive not “ increase their resources to take on larger only to compete internationally but to stay contracts and provide a more integrated in business. However, a key question go- The evolution in small businesses service offering. However, this has so far ing forward will be whether consolidation will likely not be the same in the proved unpopular in Québec. “Over the will achieve this goal. “Consolidation has near future. We will see a lot of years, consortiums have been attempted gripped the industry and it will continue companies consolidating into mid- but it causes concern among OEMs about in the next few years. However, in ten or sized businesses in order to compete. who is ultimately accountable for the twenty years from now the industry will Change is the only constant, so it is contract and is liable for any problems,” realize that some of these moves towards unclear how long the trend will last. explained Alonso. “Instead, OEMs want consolidation are not very efficient and As the young people entering the one owner of the different integrated ser- therefore some mergers will be disman- workforce today mature and choose vices. Therefore, mergers and acquisitions tled,” commented Ledoux. should be a bigger priority.” Effective management of Québec’s supply their direction, their ideas will begin to Alta Precision doubled its facility’s size chain will be important in maintaining the stimulate more small business again. following winning a long-term contract on region’s prominent position on the global Embraer’s E2 program in 2014 and plans stage. SMEs will only be able to survive to double its sales in the next three to four if they have a unique product or are able years based on recently-signed contracts. to offer a complete solution. Without this -Glen Lynch, Vertical integration is also a priority for differentiation, they will have to compete President & CEO, Alta Precision, which aims to become an on price and will need to continue inno- GAL Aerospace integrator and gain extra volume from vating in their processes. Today’s climate OEMs. requires business to be well-rounded in all There is a big opportunity for foreign areas and, as such, continued government investors to fill the gap in Québec’s support will be needed to help companies aerospace market for Tier 1 integrators. raise the bar and avoid off-shoring by the Indeed, this is already happening; for region’s OEMs. ▬
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports” Global Business Reports THOUGHTS
“Consolidation will continue and Aéro Montréal encourages this trend. SMEs are currently too dependent on a limited number of customers; moreover, OEMs are no longer buying directly from SMEs but instead from integrators mostly located outside of Canada. Because SMEs must sell to international integrators, Aéro Montréal assists them in their internationalization strategies by encouraging them to integrate and adopt Industry 4.0 technologies. We also facilitate meetings between international OEMs and Tier 1s and Québec’s SMEs. These include, for example, regular meetings with Boeing and Lockheed Martin.”
- Suzanne M. Benoît, President, Aéro Montréal
“Looking objectively at the industry, there is definitely a need for greater consolidation among SMEs. There are many people with a lot of expertise, experience and ideas in the lower levels of Québec’s aerospace supply chain and this brings opportunities for acquisitions. Alongside this, there is a clear need for SMEs to integrate additional services into their business. Whether this will happen, however, depends on the mindset of the individual entrepreneur running these smaller companies. ”
- Alain Ricard, Head of Transport Team, Norton Rose Fulbright
“For many years, the OEMs have wanted to work with fewer suppliers, which has led to increased 41 pressure on SMEs to consolidate. Initially, SMEs believed this pressure would result in loss of control. However, many now recognize that consolidation can be beneficial because they can maintain their entity while gaining new contracts and projects.”
- Jacques Comtois, Vice President and General Manager, L-3 Communications MAS
“The Canadian government is definitely trying hard to change the dynamic in Canada’s aerospace industry by encouraging companies to collaborate more. Due to the entrepreneurial nature of Canada’s SMEs, some smaller companies would prefer to have 100% of a niche market than tackle a market that is 100 times larger and share the proceeds with their competitors through a consortium. In addition, whilst research consortia are easily formed and therefore the most common form of consortium, commercial projects are much more complicated.”
- Phil Cole, VP Business Development, Marinvent
“The ecosystem will continue to experience a lot of consolidation because OEMs increasingly want to work with larger SMEs. OEMs nowadays will not consider a company with less than 150 employees unless it has a unique product or operates in a specialized niche. ”
- Mario Lepine, General Director, F. List
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations TABLE OF CAPABILITIES Global Business Reports
Number of Number of Revenue Components and Industrial Systems and Subassemblies Machinery and Actuation and Treatment and Navigation systems Communication systems Design, interiors Testing and Mapping and Aerospace Automation Simulation Company employees in Québec employees in total 2016 (USD) standard parts engineering software and structures equipment landing gear processing and equipment and equipment and exteriors maintenance remote sensing services and robotics services
ABB 33 billion (wider group) x x x x x Adacel 110 20 million x x x Aeroneuf Instruments x AKKA Technologies 14,500 18.7 million (N. America) x x x Alphacasting 160 160 x x x x Alta Precision 110 110 20 to 30 million x x x x AMEC Usinage 54 54 x x Anys NTI 3000 988.6 million x APN 100 150 x x Arconic 500 41,500 12,4 x x x x Astonics LSI 150 x x x ATLAS Aeronautik 150 150 x x x AV&R 100 ------x Avior 230 230 x Avitec Tools 45 45 x x Bell Helicopter 900 7500 3.2 billion x x x x x Bombardier 15,700 66,000 16.3 billion x x x x x x BUILDIT Software & Solutions 19 23 - - - x ------x CAE 3100 8500 1.9 billion x x x Creaform 230 550 x x x DCM Group 200 200 30 million x x x x x x Elisen 15 x x x EMG Technologies x x ÉQUIPEMENT D'ESSAI AÉROSPATIAL C.E.L. 76 84 x x x x Exonetik 17 17 x F. List 100 (projected) 800 94.8 million x x x x x x x Fonds FTQ 600 600 861 million x GAL Aerospace x x x GE Aviation 800 44,000 26 billion x x x x x x x x GGI Solutions 190 190 x x x x x Héroux-Devtek x x x x ICAM Technologies x x Ingenio Aerospace x x 42 Innotech-Execaire Aviation Group x x x INO 200 28 million x x x J2 Procurement Management 25 25 x L-3 Communications MAS x x x x x x x LATECOERE Services x x x x x x Luxia Innovation 20 20 3.5 million x x x x x M1 Composites Technology 36 36 - x x x x Mannarino Systems & Software 55 4 to 8 million x Marinvent 12 14 1 million x x MAYA Simulation 140 150 x x x x x McMillan LLP x MDA 800 4800 1.65 million x x x Mecachrome 175 3500 54 million (Canada) x Mecaer America 122 550 29 Million x x x X MPB Communications 135 150 30 million x x x x Nüvü Camēras X X x x P3 Group Canada 60,000 400 million (Group) x x x x PCM Innovation 180 210 - x x Pratt & Whitney Canada (P&WC) 4800 9400 x x Presagis 80 120 x x x x x PUDDLEJUMPER FLOATS x Radix 90 31.7 million x x Robotmaster, Hypertherm Robotic Software 25 1300+ - x Rockwell Collins 50 30000 5.26 billion x x x x x x x x x x x Rolls Royce 800 49,900 18.2 billion x x Safran Engineering Services 3700 x x Sonaca Montréal x x x x STELIA Aerospace 122 6600 76 million x x x x TAS (Techno Aero Services) x Techniprodec x x Tekalia Aeronautik 130 130 12.5 million x x x x Thales 1800 444 million x Thermetco 70 x Titanium Industries x x x TNM Anodisation et Peinture x x Varitron 300 375 70 million x Vestshell x x x Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports TABLE OF CAPABILITIES
Number of Number of Revenue Components and Industrial Systems and Subassemblies Machinery and Actuation and Treatment and Navigation systems Communication systems Design, interiors Testing and Mapping and Aerospace Automation Simulation Company employees in Québec employees in total 2016 (USD) standard parts engineering software and structures equipment landing gear processing and equipment and equipment and exteriors maintenance remote sensing services and robotics services
ABB 33 billion (wider group) x x x x x Adacel 110 20 million x x x Aeroneuf Instruments x AKKA Technologies 14,500 18.7 million (N. America) x x x Alphacasting 160 160 x x x x Alta Precision 110 110 20 to 30 million x x x x AMEC Usinage 54 54 x x Anys NTI 3000 988.6 million x APN 100 150 x x Arconic 500 41,500 12,4 x x x x Astonics LSI 150 x x x ATLAS Aeronautik 150 150 x x x AV&R 100 ------x Avior 230 230 x Avitec Tools 45 45 x x Bell Helicopter 900 7500 3.2 billion x x x x x Bombardier 15,700 66,000 16.3 billion x x x x x x BUILDIT Software & Solutions 19 23 - - - x ------x CAE 3100 8500 1.9 billion x x x Creaform 230 550 x x x DCM Group 200 200 30 million x x x x x x Elisen 15 x x x EMG Technologies x x ÉQUIPEMENT D'ESSAI AÉROSPATIAL C.E.L. 76 84 x x x x Exonetik 17 17 x F. List 100 (projected) 800 94.8 million x x x x x x x Fonds FTQ 600 600 861 million x GAL Aerospace x x x GE Aviation 800 44,000 26 billion x x x x x x x x GGI Solutions 190 190 x x x x x Héroux-Devtek x x x x ICAM Technologies x x Ingenio Aerospace x x 43 Innotech-Execaire Aviation Group x x x INO 200 28 million x x x J2 Procurement Management 25 25 x L-3 Communications MAS x x x x x x x LATECOERE Services x x x x x x Luxia Innovation 20 20 3.5 million x x x x x M1 Composites Technology 36 36 - x x x x Mannarino Systems & Software 55 4 to 8 million x Marinvent 12 14 1 million x x MAYA Simulation 140 150 x x x x x McMillan LLP x MDA 800 4800 1.65 million x x x Mecachrome 175 3500 54 million (Canada) x Mecaer America 122 550 29 Million x x x X MPB Communications 135 150 30 million x x x x Nüvü Camēras X X x x P3 Group Canada 60,000 400 million (Group) x x x x PCM Innovation 180 210 - x x Pratt & Whitney Canada (P&WC) 4800 9400 x x Presagis 80 120 x x x x x PUDDLEJUMPER FLOATS x Radix 90 31.7 million x x Robotmaster, Hypertherm Robotic Software 25 1300+ - x Rockwell Collins 50 30000 5.26 billion x x x x x x x x x x x Rolls Royce 800 49,900 18.2 billion x x Safran Engineering Services 3700 x x Sonaca Montréal x x x x STELIA Aerospace 122 6600 76 million x x x x TAS (Techno Aero Services) x Techniprodec x x Tekalia Aeronautik 130 130 12.5 million x x x x Thales 1800 444 million x Thermetco 70 x Titanium Industries x x x TNM Anodisation et Peinture x x Varitron 300 375 70 million x Vestshell x x x Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations EDITORIAL Global Business Reports
From foundry to final “Because the Tier 4s are large billion- dollar companies, they have a lot of assembly leverage in price negotiations and can afford to be inflexible. They are the Arconics of this world and are also moving quickly into the Tier 3 market. With OEMs enforcing cost pressure Québec’s extensive proficiencies stem from Boeing’s 787 Dreamliner. Because the buy- and Tier 4s not budging on price at its large number of specialized suppliers to-fly ration of material is substantially re- the other end of the supply chain, across all the required disciplines within the duced, there is excellent opportunity for cost the middle tiers are squeezed, forcing aerostructures field. From fuselage, landing reduction. Mecachrome also has several 4.0 them to become more and more gears and actuation systems to flight control factories, with a fully automated line at its efficient. systems and engines, Québec’s comprehen- Sablé-sur-Sarthe facility, which produces sive supplier base are advanced in capabili- blades for the Leap 1A, 1B and 1C engines. ties and processes, supporting the region’s Alongside additive manufacturing, Qué- - Sylvain Bedard, OEMs across the vast requirements of air- bec’s supply chain is also embracing auto- CEO, craft assembly. mation and other Industry 4.0 technologies Sonaca Montréal Directly below the OEMs in the supply to ensure competitiveness in a globalized chain are the Tier 1 integrators, of which environment. Stelia Aerospace, for exam- Québec has upwards of 10. Whilst capa- ple, uses automated fiber placement tech- bilities at this level are extensive, covering nology in its manufacture of aerostructures. fuselage, engines, landing gear, there is an “A lot of traditional composite structures are Also focusing on automating processes” to effort within the region to attract more Tier done by hand whereas AFP uses a robot,” increase competitiveness is the Montréal 1 companies. “Tier 1s are the missing ele- explained Claude Baril, Stelia North Amer- subsidiary of Belgium-based Sonaca, a 44 ment in Québec’s ecosystem,” commented ica’s managing director. “The robot uses a world leader in the manufacture of large Dominique Anglade, Minister of Economy, series of filaments that is deposited in a spe- aluminum wing aerostructures for commer- Science and Innovation, Government of cific sequence and orientations onto or into cial and business aviation. “We welcome Québec. “There are specific companies the a mold/mandrel. The process is often more these technologies because they are essen- Ministry is targeting that could add signifi- accurate, highly repetitive and lends itself tial,” said Sylvain Bedard, CEO at Sonaca cantly to the sector in Québec. The govern- for fabrication of larger structures.” Montréal. “The aerospace supply chain is ment will remain focused on attracting, ad- Referencing the large expense involved now international and ours is mostly North vising and investing in such companies.” with the technology and challenges in American. Therefore, in order to compete, Québec is already familiar ground for sever- terms of inspection, Baril continued: “The we need to implement automation as much al foreign companies at this level, including amount of material that can be deposited as we can. Our latest investment was into Safran, Sonaca, Mecaer and Stelia. in a given number of hours is limited (al- Industry 4.0 machines with automation ca- With consolidation at the Tier 4 level and though improving) which makes it difficult pability; they do not interact with each other resulting price power in conjunction with to form a business case for small parts. The yet but they have the software to do so. We OEM demands for price reductions at each process is better suited to large organiza- are one of the first companies that entered end of the supply chain, the middle tier lev- tions that can support such an investment into the Industry 4.0 program and we have els are being squeezed on cost. Cost reduc- and for very complex parts and in the de- a project with the government to implement tion is therefore at the forefront of manu- fense sector where cost is not necessarily it.” facturing considerations after quality and a leading factor. Nevertheless, because a Sonaca will continue to channel its innova- performance. “Our current supply chain lot of these structures are being produced tion investment into manufacturing process- is performing well and we look to Québec internally by the OEMs or Tier 1, we need es as it does not have design authority on its companies to bring innovation to the table to focus on smaller assemblies where there products. for cost reduction and performance,” high- is a larger (and growing) pool of qualified As Tier 1 companies continue to move to- lighted Francesco Calcara, aerostructures suppliers. To be successful, we need strong wards cost reduction and process efficiency sales director – Americas at Mecachrome. performance with on-time and on quality to surpass their competitors, pressure on “We remain able to find competitive pricing deliveries (OQD & OTD) while remaining their suppliers is mounting. In order to win within our Québec cluster. Whilst it is im- competitive.” contracts, SMEs will need to either excel in portant for our suppliers to innovate, execu- Stelia will continue to invest in composite a specialized area or offer a suite of services tion is the most important aspect.” fabrication and assembly capabilities to in- that is integrated enough to provide value as Mecachrome is pursuing innovative manu- crease its dominance as a Tier 1 supplier in an integrated supplier, whilst ticking all the facturing processed such as 3D printing and North America to match its current standing boxes in terms of quality, on-time delivery currently has 3D-printed parts in service on in Europe. and cost competitiveness. ▬
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports INTERVIEW
In 2015, Sonaca Montreal wanted to expand into larger air- Sylvain craft. How has this plan been implemented? We have been successful in expanding our customer base into larger aircraft by signing, recently, two contracts for the Boeing 767 and Bedard 787. Following the acquisition of new equipment, we have been suc- CEO cessful in the stringer business through the Airbus 330 program and SONACA MONTRÉAL new programs such as the Embraer E2-175 and the Global 7000.
As a major player in Quebec’s aerospace industry, what are the dynamics of the region’s ecosystem? The ecosystem is strong but we are all competing for manpower. Sonaca Montréal, a subsidiary of the Belgian group Sonaca, is a Whilst the academic programs are fantastic, the challenge lies in world leader in the manufacture of large aluminum wing aerostruc- attracting people into these programs, especially women. There are tures for commercial and business aviation. not enough students graduating to meet current market demand. Those that apply to school often obtain job offers before they finish Sonaca Montreal is part of Sonaca Group, following its acqui- their programs. sition in 2003. Where is the division positioned in the market today ? When seeking suppliers or partners, does Sonaca still view the Sonaca Montreal specializes in long bed machining of aluminum Quebec ecosystem as competitive over other regions globally? parts up to 60 feet long. Since the acquisition, Sonaca invested over Sonaca Montreal's supply chain is very unique. The number of US$ 30 million in new equipment to increase its capacity with new suppliers is very limited because we are very vertically integrated, gantries, an extrusion mill, a fully automated surface treatment line taking raw materials and transforming them into finished products. and a final assembly foot print. Within the group, Sonaca Montreal There are no local players for raw materials with the required certifi- has a unique capability for large structural components. Being fully cation so we have no choice but to source elsewhere. OEMs enforc- integrated is a major advantage we have over our competitors; hav- ing cost pressure and Tier 4s not budging on price at the other end ing all of our processes under one roof also means shorter cycle of the supply chain, the middle tiers are squeezed, forcing them to times and limited transportation. become more and more efficient. ▬ 45
The group has over 400 machines and 500 spindles, of which Me- cachrome Canada accounts for about 10%. We recently added a second 5-spindle gantry, which is almost one-of-a-kind in the in- Francesco dustry. Our key business is the assembly of complex structures and complex machining for hard and soft metals. We also offer design and build solutions and a lot of engineering services to our custom- Calcara ers. Aerostructures Sales In 2015, automation had yet to play a dominant role in the Director-Americas machining of large parts at Mecachrome. How has the com- MECACHROME pany moved in this direction? We now have several 4.0 factories within the Mecachrome group. In addition, a lot of our experience from the automotive industry has transversed to the aerospace sector, which has also helped us Mecachrome Canada designs and produces complex assemblies a lot. Mecachrome Canada has recently added a full-time digital made of critical structural parts. innovation manager to reach our goal of being completely paper- less by 2018. What is the extent of Mecachrome’s presence and capabilities in Canada today? What are some other areas of R&D focus? Mecachrome Canada was established in 2004 and currently has We will be the world's first serial production cryogenic machin- 170 employees. Through strong partnerships with local suppliers, ing site in our Portugal facility. We will be delivering our first se- we have become a Tier 1 supplier to the majority of OEMs on this rial production parts for aero engines to Safran later this year. We side of the world. However, we would like to expand our reach to have several patents for cryogenic machining, which substantially all OEMs . In our Mirabel Quebec Facility, we deal primarily with reduces the cost of titanium machining. Material nesting is another aerostructures. big focus area. ▬
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L-3 Communications MAS (L-3) is a lead- instructions. Publications are no longer re- ing in-service support (ISS) integrator. quired as a technician can now have all the required information on a tablet. Last year, L-3 MAS was created through L-3 Com- we pushed that notion further by deploying munications’ acquisition of Bombardier the "technician companion". Through the Defense Services in 2003 and has diver- use of augmented reality, technicians have sified over the years. Where is L-3 MAS now their hands free at all times and can positioned in the market today? carry their tasks while seeing the works We maintain a leading edge over our instructions in front of their eyes with vir- competitors by having one of the largest tual reality goggles. By integrating other engineering departments in Canada out- technologies, they can also see the systems side of the OEMs, with approximately they are working on in operation thereby Jacques 150 engineers and technicians. We offer a facilitating troubleshooting. They can also full range of services from basic MR&O order parts by simply pointing, call for Comtois to fleet management, prototyping mission- engineering support and complete many ization and integrated environment. Over other tasks hands-free, without having to the years we have also achieved a number leave their work location on the aircraft. of certifications and obtained airworthi- ness delegations that allows us to provide How do you expect new technologies further guidance beyond the OEM-recom- to affect the shape of the workforce in Vice President and General Manager mended maintenance activities. About Québec? L-3 COMMUNICATIONS MAS 30% of our current revenues come from We are currently in a phase where a large 46 exports and we are actively looking to in- number of organizations in our industry crease this percentage, focusing mainly on are hiring and it is therefore harder to find the United States and European markets. the right talent. If one looks on the differ- ent job websites, they will see that there Could you elaborate on L3 MAS’ capa- are currently approximately 1000 posi- bilities and service offering in Québec? tions advertised. Recent graduates are now We are mostly focused on providing ISS also very accustomed to using intelligent services which now include the provision devices to complete tasks and to communi- of integrated environments, a requirement cate. They therefore expect to use the same we have identified as a result of working type of devices in their job and it is nec- closely with our customers. An integrated essary for our industry to accommodate environment allows for huge efficiencies these expectations in order to attract and in fleet maintenance activities. For exam- retain them. ple, we are currently developing databases and software tools that allows for the most Going forward, what are the key objec- efficient use of aircraft maintenance data. tives for this division of L-3? We are very active in identifying new ISS A big focus for Québec’s aerospace in- opportunities in Canada and elsewhere dustry is the transition to Industry 4.0, in the World. Canada will soon renew its which includes health monitoring and fighter fleet and has identified in - thelat predictive maintenance for aircraft. Are est Defense Policy Review many other these focus areas for L-3 MAS? potential acquisitions such as a manned We are focusing our research and develop- intelligence, surveillance and reconnais- ment investments in tools or systems that sance (ISR) platforms. Another objective can significantly achieve efficiencies and is to see how we can apply our current reduce in-service support costs to our cus- ISS expertise outside our traditional aero- tomers. Health monitoring, robotics and space market. There are no reasons why augmented reality are three examples of naval and land operators of ‘fleets’ could where we distinguish ourselves. not achieve the same benefits that our air Over the years, we have facilitated our operators customers are realizing today by technician’s work by digitalizing the work making use of our services. ▬
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports INTERVIEW
Claude Are there any areas of R&D focus for aeronautics, particularly on the composite side? The main aim is to reduce the cost and improve the flexibility of fabrica- Baril tion. We purposely built the composites manufacturing facility in Mirabel Managing Director in 2008 to develop large composite structures with Bombardier, Bell He- STELIA AEROSPACE licopter and the National Research Council (NRC) using Automated Fi- NORTH AMERICA ber Placement technology (AFP). The NRC provided a fiber replacement machine and we worked with Bombardier and Bell Helicopter to develop complex composite structures. STELIA Aerospace has also developed in France a unique technology Created in 2015 through the merger of two Airbus subsidiaries, STELIA called 3D milling, which is a replacement to the old chemical milling fab- Aerospace offers global solutions for aeronautical manufacturers and air- rication process. line companies and is a leader in the areas of aerostructures, pilot seats and Business and First Class passenger seats. Could you elaborate on some of the specifics of fiber replacement and its advantages? STELIA Aerospace was created in 2015 through the merger of A lot of traditional composite structures are done by hand whereas AFP Aerolia and Sogerma. What direction has the company taken since uses a robot. The robot uses a series of filaments that are deposited in a the merger and where do the Mirabel operations fit in the context specific sequence and orientations onto or into a mold/mandrel. The pro- of the wider group? cess is often more accurate, highly repetitive and lends itself for fabrica- Before the merger, the Aerolia and Sogerma facilities catered to two dif- tion of larger structures. ferent applications and, since the merger in 2015, they continue to have two distinct operations under STELIA Aerospace North America in Mira- What are the key objectives for STELIA Aerospace in the North bel. The airport facility is focused on the design, development and fabrica- America region? tion of Global 7000 and 8000 fuselages for Bombardier, whereas the com- We are looking at increasing composite fabrication and assembly capabili- posites manufacturing facility focuses on composite structure fabrication. ties. Our vision is to diversify our customer base and we will use our well- With revenue of €2.4 billion and more than 6,600 employees worldwide, established position as a platform to expand our activities within North 47 STELIA Aerospace supports major aeronautical companies such as Air- America. Within a few years, our objective is for STELIA Aerospace to bus, ATR, Boeing, Bombardier, Dassault, Etihad Airways, Singapore Air- be recognized as a dominant Tier 1 supplier in North America, as we are lines and Thai Airways. today in Europe. ▬
tracts with Boeing that required new composites-related approvals for products on the 787 and 737 Max. Attaining these approvals is a big step for Avior as they allow us to penetrate a substantial barrier. Stephen Our participation in a high-visibility program in Seattle is strate- gically significant as a Tier III Québec company. These contracts Kearns elevate us in the market for the types of structures we are position- ing ourselves to specialize in: lightweight integrated structures that President & CEO incorporate metal fabrication, plus an advanced composite capabil- AVIOR ity at our Granby business unit. (PRODUITS INTÉGRÉS) Is Avior pursuing any areas of R&D investment? We have started to invest along two fronts. The first is using 3D- printing technology for tools in composites and sheet metal fabrica- Avior is a full-service manufacturer of lightweight structures and tion. The second area is robotics; we are now starting the process of complex mechanical assemblies. introducing robotics into our processes, especially the more labor- intensive ones, and we are conducting a pilot project this year. Can you give us an update on where the company currently positions itself in the market? What are the main objectives and growth plans for Avior in The company’s base elements were established in 2012 through the near future? 2015. In the last several years, the company has become more fo- One is to improve our competitiveness by streamlining our pro- cused towards penetrating new markets, and our primary focus has cesses and eliminate as much waste as we can, for which we have been south of the border to the United States. developed an ambitious plan to reduce production cycle time on One of the biggest obstacles in penetrating a market is having the our shop by a significant percentage year on year. Secondly, we are necessary special process approvals to manufacture certain types of trying to become more paperless and challenge the cycle time in components or structures. We recently won a couple of new con- our administration as much as we challenge the shop. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations EDITORIAL Global Business Reports
printing lab, which it uses to help companies Aircraft building blocks: adopt this technology and optimize their manu- facturing processes. The organization plans to add a machine dedicated to titanium printing components and and is pursuing activities with the Québec 3D- printing network and has made an alliance with Canada Makes to synergize the teams. In May sub-assembly 2016, CRIQ launched Fab3D, its new additive manufacturing training program for the indus- try. Other companies have found success through proprietary processes. Alphacasting, a SME ca- At the foundation of the value chain, SMEs that Brosseau, Titanium Industries’ general man- tering to the high-end part area of the foundry have managed to survive and see success are ager. business, has developed a proprietary Cool those which are specialized in a niche area or “Our goal is to provide as near a net-shape as Cast process, for example. “The process is rap- that have developed proprietary technologies. possible to the customer so that no material is id solidification; the same process used to make Even so, the great degree of consolidation and wasted,” added Piotrowski. “Waterjet cutting jewelry,” outlined Steve Kennerknecht, Alpha- increasing vertical integration in this segment makes this possible as it allows for the nesting casting’s vice president of engineering and the of the supply chain makes the space extremely of complicated parts into a plate.” developer of the process. “Normally, stainless competitive. steel, titanium or aluminum is poured into a As OEMs continue to strive to reduce weight pre-heated mold so the metal flows into the as a means of cost reduction, material selec- Additive manufacturing cavities. The problem is the metal cools very tion is key. “Generally, OEMs are looking for slowly because everything is hot, which results materials that have high strength, low weight, Additive manufacturing resonates with manu- in large grain size with low mechanical prop- resistance to extreme temperature conditions facturing priorities to produce components erties. We needed a process to cool the metal and corrosion resistance, typically selecting the faster and most cost effectively. While not a quickly. Our proprietary technology cools the lowest-cost material that meets the criteria,” new technology per se, its uptake is certainly mold very quickly, which cools the casting and 48 commented Peter Piotrowski, business devel- increasing and development of the technol- gives us great mechanical properties.” opment manager at Titanium Industries, a Qué- ogy is a great area of focus for many compa- Yielding 35% higher strength while using bec-based SME manufacturing and distributing nies. “Additive manufacturing has been used the same parts, the process foregoes the need titanium and nickel mill products for various by the investment casting industry, including to redesign the mold whilst offering greater industries, including aerospace. “Because they Vestshell, in rapid prototyping for 20 years,” strength, resulting in greater security and bet- often want a very specific mix of these quali- highlighted Joseph Laflamme, president at ter margins. Kennerknecht added: “We seek ties, they look for specialty materials such as Vestshell, which specializes in investment cast- to offer complex high-value-added parts that ours… In terms of material usage, the advent of ing of ferrous alloys and stainless steels for cannot be machined out of solid or composite composites has been very beneficial to titanium the aerospace, medical and military industries. material. Customers want high-strength alumi- demand as composites do not generally have “This saves us the four to six weeks it would num which we can provide through our Cool high structural intensity and therefore need re- take to make a mold. Now, the debate is cen- Cast process. Composites and titanium are now inforcement with materials like titanium. There tered on 3D-printed metal parts. We are looking more prevalent and customers are increasingly is also a drive to reduce the cost of engine ma- into how we can use this technology to comple- seeking stainless steel with high heat resistance terials, which has meant titanium-aluminides ment our offering. Vestshell is a participant in for fire suppression around the engine, for ex- are to some extent replacing titanium and a metallurgical research consortium with com- ample.” nickel alloys.” panies such as Héroux-Devtek to examine the Rather than specializing in one specific metal, Titanium is favorable for its strength-to-weight potential for 3D-printed alloys. However, at Alphacasting casts all alloys under the same ratio, while stainless steel and steel alloys are present, the speed at which 3D machines can roof. Beyond focusing on the Americas and Eu- also in high demand due to their strength. Ti- produce components is slower than what we rope, the company also plans to enter countries tanium Industries stocks these materials as can achieve with traditional manufacturing with booming aerospace industries that lack well, also selling a lot of nickel for engine pro- methods. The surface finishes are also not as foundries with iron-casting capabilities, such duction, which is used because of its extreme smooth as casted components. Nevertheless, as Romania and Russia. strength in very high temperatures and resis- the potential of the technology is impressive tance to corrosion. and we want to be part of this innovation.” The company recently purchased a water-jet By continuing to implement new technology Building reputation cutting company in New Jersey, supplement- and processes, Vestshell plans to capture more ing its capabilities in Montréal and the United growth in the United States and Europe and add In order to be considered competitive, many States with a value-added solution. “Our in- more value to its services by adding capabili- SMEs consider the pursuit of innovative house expertise means we can offer titanium ties such as machining and light assembly. manufacturing processes essential to measure with varied tolerances and cut a profile which CRIQ is also focused on the development of up to global competitors. In reference to the is in many cases ready for use,” said Richard additive manufacturing and has a large 3D- competitiveness of lower-cost countries, Ken-
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports EDITORIAL
nerknecht projected: “They will probably be mathematicians and two team members with where we are today in about 15 years. That is Master's degrees in automation.” why we need to continue to push on. Because As upfront investment into these technologies companies like Bombardier and Safran have can often be a challenge for small companies, such high volumes, they need multiple suppli- SMEs such as APN are able to take advantage ers and will therefore encourage Asia to build of funding offered by government organiza- up that capability. Taiwan and China are likely tions and other bodies that support the indus- to be capable suppliers in the future.” try. Indeed, APN received financial aid through In response, companies are seeking to auto- Investissement Québec and the Ministry of mate processes and increase cost efficiency. Economy, Science and Innovation in 2017, fu- For example, AMEC Usinage, an SME adja- eling the company’s growth. The company is in cent to Québec City specializing in high-preci- discussions to make an acquisition in the fore- sion machining for small and mid-sized aircraft seeable future and prides itself on zero non- parts, is adopting more Industry 4.0 processes conformities or late deliveries to its primary and has taken steps to automate its machining customer, Pratt & Whitney Canada, in the last processes. “The OEMs have been moving pro- three years. duction to countries such as Mexico, Morocco and India and are subsequently using more lo- cal suppliers at these locations,” commented Scaling up Geneviève Paré, business development direc- tor at AMEC Usinage. “We therefore experi- As well as increasing process efficiency to be ence competition from these countries but we more competitive, SMEs are also under pres- maintain the advantage of being closer to our sure to diversify their service offering and clients in North America.” become more of a “one-stop-shop”, causing AMEC has recently bought a new 5-axis ma- companies to vertically integrate their services chine with 320 tools that can perform 32 jobs wherever possible. Many companies are there- simultaneously in addition to its 20 CNC ma- fore adding finishing capabilities into their chines, CMM machines and optical compara- portfolios. 49 tors and is simultaneously producing 15 parts Companies such as Tekalia Aeronautik and for the cockpits of the C-Series with a consis- TNM Anodizing and Paint have been expand- tent lead time. The company will also update ing their capabilities in surface treatments its ERP system to automatically communicate along these lines, with automation also being the latest information in the execution of orders an area of focus. Because these processes can to its clients. Through managing sub-contrac- be very human-resource intensive when done tors, AMEC now provides turnkey solutions to by hand, the uptake of robotics is increasing, clients, including painting, anodization, zink- particularly in painting. “Another reason for ing and electro polishing and was recognized turning to robotics is the demand for better by Aéro Montréal as ‘Company of the Year’ for transfer efficiency as manual spraying leads to the MACH initiative and has reached MACH wasted paint due to overspray,” noted Frederic 3. Whilst the 54-employee company is yet to Charnoz, global strategic account manager, export its services, an acquisition in the United automotive and aerospace at Sames Krem- States may be on the horizon. lin, which designs and manufactures process Another company turning to innovative pro- equipment for sealing and bonding, protec- cesses to drive success is APN, a SME special- tion, anti-corrosion and embellishment with izing in processes for complex high-precision multiple colors for various industries, includ- machining for materials of very high hardness, ing aerospace. “A related trend is an increasing which is recognized as a forerunner in Industry demand for a better-quality finish on aircraft.” 4.0 technologies, having begun to develop sys- Sames Kremlin aims to provide robotized solu- tems before the trend started to grow in Canada. tions for painting and possibly sealing of air- “Data is the key and essence of everything in craft and views Québec as an important part of manufacturing,” emphasized Yves Proteau, co- its strategy to grow its aerospace market share. president at APN. “Our realization of this and Québec’s vast network of SMEs makes for a the subsequent steps we have taken has made competitive ecosystem, encompassing a broad APN number one in implementing Industry 4.0 range of capabilities, many of which are highly technologies in Québec. In reflection of our be- specialized and therefore in high demand by lief in these processes, we have invested C$2.5 their customers. Nevertheless, it will likely be million into our systems in the past five years. innovation on the process side that will deter- APN has five full-time computer programmers, mine success in the longer term. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations INTERVIEW Global Business Reports
Since 2015, the EP&S segment has materials. In addition, titanium will contin- signed more than US$11 billion in new ue to be popular due to its high strength- contracts with aerospace companies. to-weight ratio. It is also more resistant to What makes Arconic the favored choice? high temperature conditions, such as in en- Arconic is a leader in customer focused gines, than other light-weight metals. Ar- innovation and our vertical integration conic is well-positioned to capture growth presents a major advantage to customers. in titanium through our acquisition of the When we innovate, we do so because our former RTI International Metals. customers are asking for it and we help them solve a challenge. We are a leader in Could you elaborate on Arconic’s addi- advanced manufacturing processes, such tive manufacturing capabilities? as additive manufacturing, for which we Arconic has global additive manufacturing Jeremy already have three agreements with Air- capabilities in direct, prototyping and hy- bus, and new material development. For brid technologies. We also recently made Halford example, we have developed a new tita- an investment in technologies to develop nium alloy called THOR which performs metal powders optimized for 3D printing well in high temperatures and can be used of aerospace parts. Additive manufactur- in certain instances as a lighter weight al- ing technologies give us another tool in our ternative to nickel-based alloys. We have portfolio to manufacture parts that perform also developed numerous advanced forg- better, with less material input and shorter President ing technologies, such as our proprietary lead times. There is growing demand for ARCONIC TITANIUM AND Ampliforge™ process, a hybrid additive these products, and Arconic is leading the 50 ENGINEERED PRODUCTS and traditional manufacturing process, al- way. We have signed agreements to supply lowing us to forge products closer to their 3D printed metal parts for Airbus commer- net shape, thereby using less metal and re- cial aircraft and to Lockheed Martin for ducing costs for our customers. Arconic is service on the Orion spacecraft. innovating to develop unique capabilities that make us a valuable partner and ensure What effect is the increasing use of au- we continue to lead the market. tomation among OEMs having on how Arconic is a global technology, engineer- In terms of our integrated services, our cus- Arconic conducts business with its cus- ing and advanced manufacturing leader. tomers choose us because we offer a range tomers? of solutions, including casting, machin- Automated systems work best with the Arconic has a presence in 25 countries. ing and other services for the same part, least amount of variability in input parts. Where does aerospace fit into Arconic’s often offering an end-to-end solution. In That means manufacturers need to secure Québec operations? addition, we partner with our customers to the best produced parts. As our customers Aerospace is Arconic’s largest end-market, propose advanced materials and manufac- automate more, this will result in higher representing 43% of its total revenues in turing processes. Furthermore, drawing on demand for our products due to our unique 2016. Our Québec operations include two our deep engineering expertise, we can of- manufacturing capabilities which enable us facilities in Laval: a casting plant which fer minor design variations which can have to meet these requirements. focuses on aluminum investment casting a very meaningful impact on cost. Overall, for aero structures and aero engines, and a we offer a complete solution. What are your key goals for the next machining facility (the former RTI Claro), three to five years? which focuses on the machining of struc- How will demand for composites and We are absolutely focused on growing our tural components for large commercial titanium in aircraft develop going for- market share, which we will do by leading aircraft. These two facilities are part of ward? the market in innovation. Our customers Arconic’s Engineered Products and Solu- Titanium is the fastest growing metal used are competing fiercely with each other to tions (EP&S) segment, which develops in aerospace. Demand for titanium is re- build the next generation of more efficient and manufactures high performance, en- lated, in part, to demand for carbon fiber aircraft and aero engines, and our goal is to gineered products and solutions for aero- due to the materials’ compatible properties. be their partner of choice in reaching this space and other markets. We work with all We are seeing a long-term trend towards target. Arconic is uniquely placed to help the major manufacturers of airframes glob- the increasing adoption of carbon fiber them due to our complete service offerings ally, such as Bombardier, Boeing and Air- reinforced polymer (CFRP), which means and our investments in advanced manufac- bus, and all the large engine manufacturers. demand will continue to grow for these two turing technologies. ▬
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports INTERVIEW
TNM currently achieves fewer than 5,000 through information technology (IT). PPMs, which is half of what the industry TNM is part of an Industry 4.0 program recommends for excellence. Due to our run by CEFRIO. TNM wants to be on par success in achieving our standards, we with the leaders in the industry for new IT even receive orders from companies that processes. offer finishing services themselves, either All process shops in the future will be OP’s or manufacturer’s wishing to offload more automated and we have plans in the work to our company when their capacity pipeline to automate some of our processes or production lines have issues. here at TNM. Areas such as NDT will not be heavily automated because the impact How has the company balanced quality of mechanical failure would represent and OTD as volumes have increased? too big a risk. Unlike in the automotive Michel Our quality department has expanded and industry, for example, finishing shops in we have implemented new processes to aerospace have many different part num- Martel drive PPMs down. bers and comparatively low volume. It therefore makes less sense to automate all How is TNM able to successfully man- processes in this industry than in others. age price pressures from OEMs that are Eventually, TNM will employ a hybrid passed down the supply chain? model between automation and manual OEMs have asked the industry for ad- processes at TNM 1. In the near future at General Manager ditional discounts on those already given our TNM 2 facility, a more advanced IT TNM ANODIZING & PAINT ten years ago; the pressure is therefore and automation systems will be employed, immense. TNM’s five-year plan included which will deal in higher volumes. 51 a risk assessment to make sure we are set up to respond to changing OEM demands How do you see the industry developing such as these. We have adjusted by further in the next few years? integrating our supply chain and TNM are Looking at the build rates of OEMs and now increasingly working with groups of existing capacity, the period between integrators that receive large orders. These 2018 to 2020 will be critical in terms of TNM Anodizing & Paint is a one-stop shop integrators and their supply chain offload increased demand and further supply chain for surface finishing from nondestructive work to other companies and TNM helps integration. However, the orders will be testing (NTD) to paint for small, medium them manage that process. By working funneled to the stronger companies. If a and large parts. together and being leaner we are able to company has not changed its processes to show beneficial savings for all involved. become more efficient, it may already be 2016 marked TNM’s 20th anniversary. too late. Many major players have been Where does TNM position itself in the Could you elaborate on TNM’s collabo- in acquisition mode for some time in both aerospace market today following im- ration and relationship with different manufacturing and finishing facilities, and plementation of its five year plan? players along the supply chain? this will continue. OEMs have succeeded The overarching goal of TNM’s last five- TNM has high-level conversations with in downsizing their supply chain and this year plan, implemented from 2013, was to OEMs and major integrators/ customers is now having a huge impact on the make- place the company within the elite of the supplying the OEMs. TNM also collabo- up of the industry. finishing industry by reaching high- stan rates with paint suppliers to ensure we dards in on-time delivery (OTD), quality know about new developments, such as Where do you see TNM in the next three and service to customers. Having reached thinner paints to meet the demand for re- to five years? this goal, TNM is now embarking on a ma- duced weight from OEMs. The key devel- I see TNM in the near future being ac- jor expansion previously put on hold due opment driver is finding solutions to- im quired for strategic reasons by an impor- to uncertainty in the industry. prove efficiency. Companies now accept tant player in the industry and this should TNM works with Tier 1 and Tier 2 integra- they have to collaborate both up and down prove to be very beneficial to both - par tors that receive huge orders from OEMs. the supply chain. ties. ▬ We have a 98% OTD rate and our parts per million (PPM) has gone down as volumes How is TNM adapting to Industry 4.0? have gone up; in other words, quality has Our customers and partners now demand improved even as orders have increased. more sophisticated communications
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations INTERVIEW Global Business Reports
Dany Dumont & Erick van de Water DD: General Manager EVDW: Business Development Manager TEKALIA AERONAUTIK EVDW
Fonds de solidarité FTQ is a development some of our processes – it is unlikely another port the industry. The aerospace ecosystem is capital fund with a mission to contribute to plating company on the Continent employs very tight-knit; everyone knows each other Québec's economic growth by creating, main- automation to such an extent as Tekalia. It is and tries to help each other. taining or protecting jobs through investment in our DNA. Soon customers will have vis- in SMEs in all spheres of activity. ibility into our workshop through live KPIs Québec’s government has invested large fed into a client portal. We also want to use sums into the aerospace industry. What It has been almost two years since GBR last Industry 4.0 processes to help our employees more could the federal or regional govern- spoke with Tekalia Aeronautik. What new achieve better results with greater efficiency. ment do to help companies like Tekalia? developments have there been at Tekalia EvdW: Alongside this, the agility of our em- DD: The focus should be to help companies 52 since then? ployees is very important. Tekalia has a very like ours put in place Industry 4.0 measures, EvdW: Tekalia has been implementing its vi- detailed training program for our employees which is really the future for the aerospace in- sion to expand, both organically through new that enables us to better adapt to the fluctua- dustry. The need is not so much financial, but surface treatment offerings and through the tion of incoming orders and better adjust to a need for the knowledge infrastructure to be industry by gaining new approvals from dif- the workloads throughout our many process- created so that companies can understand how ferent OEMs. Our main goal is to build on our es. best to implement automation and other new one-stop-shop capabilities and offer greater techniques into their processes. added value to our clients by furthering our In 2015 and 2016, Tekalia experienced vertical integration. strong growth in orders from OEMs. Is What are the main challenges and barriers Tekalia still seeing healthy demand trends? to success for SMEs like Tekalia in Québec? Tekalia is currently working on the ad- EvdW: Overall growth is strong. Demand for DD: There are too many tiers in the supply dition of processing titanium parts and certain wide body platforms is slowing a little, chain. We want Tekalia to be a higher level zinc-nickel coating to its service portfolio. although the long-range forecasts highlight integrator to support the tier 1 integrators like What is the significance of this trend in the sustainable growth, albeit subdued past 2020, Heroux-Devtek or Alta Precision by remov- industry? given the expected increase in air travel. ing sub-levels in the supply chain. SMEs will DD: This is definitely an emerging trend and DD: Tekalia expects 30% growth in demand need to consolidate so they can win the big- part of our core strategy. Part of our capital over the next three years. Our capabilities in ger contracts. We also see a lot of partnerships expenditure budget this year is devoted to put- complex parts and special processing are very between SMEs forming in order to increase ting zinc-nickel plating capabilities in place strong and there are more customers in the integration in the supply chain. and we have had many conversations on this area that would benefit from our services. As topic with our main customers such as Safran. well as Boeing and Airbus, Tekalia is already What are Tekalia’s strategic goals for the This stems from Tekalia’s quest to strengthen working with Embraer and we also hope to next few years? its position as a one-stop-shop. work with Bombardier, Airbus and Pratt & DD: Our focus will be to win new specifica- Whitney soon. tions, expand our product offering and contin- Tekalia prides itself in being a quick re- ue to add value to our client’s products. Over sponse manufacturer, which requires a Québec has a thriving network of around the next three years we aim to be recognized great deal of flexibility. How does Tekalia 200 SMEs. What factors do you attribute as one of the most efficient plating companies ensure on-time delivery? to their strong performance? in North America. We also want to focus more DD: We want to become one of the first sur- DD: Québec’s five major OEMs have created on marketing and business development in or- face treatment companies in North America a baseline for everyone. The region also has der to expand our business with new clients to be fully automated. We already automate a very good educational infrastructure to sup- and contracts. ▬
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports EDITORIAL
cured its first shipment in July 2016, five worldwide. A prime example would be weeks ahead of schedule, the company is Alta Precision, a world leader in build-to- Actuation and now in ramp-up mode. Going against the print landing gear assemblies and sub-as- grain of the diversification trends that cur- semblies, which also exports over 90% of Landing Gear rently characterize the industry, Héroux- its production. The company doubled the Devtek actually sold its industrial and size of its Montréal premises after secur- aerostructure divisions in 2012 to focus on ing a long-term contract in 2014 to produce landing gears and with highly positive re- major landing gear components for Em- sults: the business has grown from C$250 braer’s E2 program. The capacity increase An integral component of any aircraft, re- million to C$400 million and is targeting included the purchase of high-technology sponsible for its suspension and control, half a billion by 2021. The company nev- equipment, making the company more ef- is its landing gear and associated actua- ertheless plans to further its capabilities in ficient in its processes. “At one point, Alta tion system. Québec is home to a number fields such as actuation systems and flight Precision considered expanding its opera- of companies driving innovation in this control through acquisitions. tions to Mexico and the United States rath- field, including internationally-recognized The other notable international player is er than increasing its Québec presence,” Héroux-Devtek and Mecaer America, the Mecaer America, which supplies the likes commented Guillermo Alonso, president at Canadian subsidiary of Italian Mecaer Avi- of Airbus, AgustaWestland, Bell Helicop- Alta Precision. “However, as we increas- ation Group. ter and United Technologies Corporation, ingly rely on automation, the low-cost la- Héroux-Devtek, which has a 75-year his- which in fact accounts for 70% of the com- bor environment of Mexico is less attrac- tory in the region, has been a prominent panies build-to-print business. Whilst not tive. With regard to the United States, we player in Québec’s ecosystem for some a national company, Mecaer America is a were not big enough to make a greenfield time, already reaching a significant mile- significant contributor to the region,- an investment and did not find any suitable stone with the manufacture of the Apollo nouncing a C$40.4 million investment into acquisition targets.” Lunar Module landing gear in 1969. More its Laval facility in July 2016. Alta Precision continues to pursue its vi- recently, the landing gear expert secured As in other segments of the industry, the sion of becoming an integrator through a contract for the Boeing 777 for which, major players are supported by a network vertical integration and expects to double since 2013, it has invested over $110 mil- of part suppliers, several of which are its sales in the next three to four years lion in equipment and capacity. Having se- highly competitive not just in Québec but based on recently-signed contracts. 53
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations EDITORIAL Global Business Reports
Aside from process innovation and in- CARIC. Because its aerospace technology will likely stay ahead of the curve when it creased efficiency, one of the most notable is currently at technology readiness level comes to innovation in this space. ▬ trends on the product side is the shift from (TRL) 5, the company is currently mostly pneumatic and hydraulic systems towards focused on delivering prototypes. Exonetik electro-mechanical actuation, favored has also developed a haptic side stick with mostly due to its weight advantage. Ex- a handling quality rating (HQR) of one and “The increasing use of hydraulic servo onetik, an SME based in Québec City, is is currently developing a haptic seat with control of flight surfaces in helicopters driving innovation in this area, develop- the intent to cancel vibration, making it ing actuators with high bandwidth without more comfortable for pilots. is reducing the pilot's ability to compromising on cost and weight. “Actua- Additive manufacturing is also an area of understand what is happening on the tors that interface with humans work best interest for companies but not yet devel- helicopter. When problems occur, when they can deliver above 20Hz of band- oped enough for widespread use. However, pilots only receive feedback in the width and provide strong force with high its potential advantages are widely ac- form of beeps and visual warnings, precision, which ours can do while many knowledged. “Additive manufacturing in which can be difficult to understand others cannot,” explained CEO Pascal particular is a very interesting technology in a quick time-frame and can Larose. “Direct-drive motors, a common for our product,” commented Gilles Labbé, potentially lead to helicopter failure. form of actuator, are easy to control but president and CEO at Héroux-Devtek. “In We are working on adding haptic heavy and large, making them impractical the forging of products, a very long lead feedback to helicopter controls for aircraft use. Therefore, aerospace com- time is required for building and obtaining to give pilots an understanding of panies usually compromise on force qual- parts from the supplier, plus the subsequent the helicopter's condition through ity to achieve a reduction in weight, which machining can result in wasting 80% of the is where our technology shines because it material. Additive manufacturing reduces transmission of real-time tactile is both low in weight and produces a high- the long lead time and can reduce the mate- signals to their hands and fingers. The quality force.” rial cost and waste by large amounts. It is technology also provides the pilot with Highlighting a preference for Exonetik’s now proven, with GE as a good example, better knowledge of recommended technology due to there being no mechani- that the additive manufacturing process can rotorcraft limits, something which cal contact between inputs and outputs design lighter and more reliable compo- is not available on regular rotorcraft. 54 but instead a fluidic contact creating force nents at a lesser cost. Additive manufactur- As a result, there will be less need by triggering a magnetic field in the fluid ing will become more and more present in for maintenance on helicopters as that varies its viscosity, Larose continued: our industry and will be a game changer.” fewer pilots will unknowingly exceed “This makes it is easy to build redundancy, Particularly due to the presence of two of rotorcraft limits. making it possible to rely on one system if the five landing gear integrators worldwide, another is failing in the same unit, with the Québec continues to play a prominent role knowledge that the first will not cause any in this field, catalyzed by proficiencies - Pascale Larose, blockage to the unit as a whole.” within the ecosystem in technologies such Exonetik is currently working with partners as additive manufacturing and automa- CEO, in the United States, Canada and Europe, tion. With increasing focus on these tech- Exonetik including Bell Helicopter Textron through nologies, Québec’s landing gear suppliers ”
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports INTERVIEW
Guillermo Alonso
President ALTA PRECISION
Alta Precision is a world leader in supply- employees worked on the production line suppliers to absorb more of the non-recur- ing build-to-print landing gear assemblies and 20% worked in office based jobs; ring costs of production such as software, and sub-assemblies for the military and now this ratio is being reversed. Machin- workforce required and certification. Com- commercial aerospace markets. ists on the shop floor will transition to be- mercial banks do not typically finance come support for the software engineers these soft costs, so government support Could you provide an update on the ex- working on computer numerical control is critical, especially from organizations pansion of Alta Precision’s Montéal fa- (CNC) programing. Alta Precision has a such as the Business Development Bank of cility and any other major developments C$3.5 million transformation program to Canada (BDC) which creates tailored pro- since we met in 2015? transition to more automated processes in grams to finance costs such as these. Ini- In 2014, Alta Precision was awarded a long order to remain competitive. We now re- tiatives such as MACH FAB 4.0 are also term contract to produce the major compo- ceive detailed feedback on our machines’ crucial to help companies transition to new nents for the landing gear of Embraer's E2 performance and they are equipped with processes. 55 program, the second-generation of this jet laser probes, physical probes and tool life series. This project necessitated the dou- management features. For some SMEs, Alta Precision exports more than 90% bling in size of our Montréal premises and this level of investment is unfortunately of its production. What do you attribute the purchasing of high-technology equip- prohibitive, meaning they will find it hard to the company’s success in exporting? ment allowing more modern fabrication to remain competitive. Alta Precision’s decision to focus on land- methods. Alta Precision has now delivered ing gears forced the company to win cli- the first parts to Embraer and, following a Alta Precision has a stake in Tekalia ents internationally as there are only five successful first flight, the certification -cam Aeronautik. How important are part- landing gear Tier 1s worldwide and of paign is also going very well. We are now nerships such as this one to ensure sup- those, only one, Héroux-Devtek, is located working on the ramp up of production. pliers remain competitive? in Québec. We invested a lot into inter- At one point, Alta Precision considered Vertical integration is critical as OEMs national business development activities, expanding its operations to Mexico and are demanding to work with bigger, more building on the networks we made at the the United States rather than increasing its integrated suppliers. SMEs in Québec Farnborough, Paris and Singapore air- Québec presence. However, as we increas- typically have annual revenue figures shows. ingly rely on automation, the low-cost la- between C$5 million and C$10 million, bor environment of Mexico is less attrac- whilst OEMs are demanding to work with What are Alta Precision’s key goals for tive. With regard to the United States, we C$100-million to C$200-million business- the next three to five years? were not big enough to make a greenfield es. Over the years, consortiums have been Alta Precision will double its sales in the investment and did not find any suitable attempted but this model actually causes next three to four years based on contracts acquisition targets. concern among OEMs over ultimate ac- it has recently signed. We will also contin- countability for the project and liability ue with our vision of vertical integration, How important are new processes such for any problems. Instead, OEMs want one potentially through a merger, so that we as automation and Industry 4.0 to en- owner of the different integrated services. can become an integrator. Through busi- sure SMEs remain competitive? Mergers and acquisitions should therefore ness development, resourcing programs or If SMEs do not implement these technolo- be a bigger priority within the industry. possibly an acquisition, we will gain extra gies, they will not survive–labor in Qué- volume from OEMs. The outlook for the bec is too expensive. Automation reflects How supportive is the government of the industry is strong–passenger and cargo a broader shift in the workforce due to industry? volume is on the rise. We are in a winning technological advancements which are The investments required for new equip- industry; we just need to capitalize on its unstoppable. Previously, around 80% of ment are very high and OEMs are asking strength. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations INTERVIEW Global Business Reports
Mecaer America Inc. specializes in the design, A big focus is electro-mechanical actuation manufacturing and qualification of integrated and steering control, which contributes to landing gear systems. weight reduction. It is a first-generation tech- nology which is still finding its feet but is here What is the relationship between Mecaer to stay. Additive manufacturing is beginning to America and its parent company Mecaer make an impact on aerospace production but Aviation Group? is in its infancy and is not yet a great area of Mecaer America is a Canadian company and a focus for us. wholly owned subsidiary of Mecaer Aviation Group. In Canada, our operations are self- What effect will the consolidation supply sufficient in terms of the development, design, chains have on Québec’s aerospace indus- manufacturing and testing of landing gear sys- try? tems. Mecaer America is the world’s smallest The demands of OEMs are becoming more so- landing gear design integrator which allows phisticated every year. This makes it harder for us immense flexibility compared to our much smaller suppliers to compete, which will cause larger competitors. further consolidation. In addition, there is less work as consolidation takes root. Given our Chris Could you expand on the company’s service position as an order placer and Tier 1 supplier, offering? this affects Mecaer America less than smaller O’Neill Mecaer America offers plug-and-play design companies. Every momentous change in busi- and manufacturing. We are a build-to-print in- ness allows for both opportunity and concern. tegrator as well as a design integrator for sub- We will find a way to exploit this opportunity assemblies and entire systems, working mostly but the impact on smaller companies produc- with large clients such as Airbus, AgustaWest- ing manufactured parts will be more pro- land, Bell Helicopter and United Technologies nounced. They will either need to integrate or President & COO Corporation (UTC). Our business is split 70% will be forced to drop out of the market. MECAER AMERICA INC. for build-to-print for UTC and 20% to 40% for 56 design programs split equally between Europe What are your views on smaller companies and North America. forming consortiums? In theory, it is a great idea. However, the aero- In July 2016, Mecaer America announced space industry in Québec has developed solely a C$40.4 million investment into its Laval in a private market, meaning that there is a facility. What are the plans for the facility’s strong sense of entrepreneurialism which can development? impede consortiums forming. Companies in The investment will help Mecaer America to the US are beginning to band together and this support new product development programs should happen more in Québec. where the upfront costs for design and certifi- cation are onerous; landing gear programs cost Where should the industry focus its prog- upward of C$10 to 20 million to certify. We ress to remain competitive? will also be investing C$12 million to C$15 The industry should focus on investment in million over the next 10 years in new machin- the bricks and mortar and heavy equipment. ery and a large drop tower to be able to test We need to turn the page on supporting the big our products. OEMs. While assembly, fixtures and comput- ers for engineers are easy to move abroad, it is How supportive are the regional and nation- not as simple to move heavy equipment. The al governments of the aerospace industry? government should also heavily invest in In- The Québec and federal government are very dustry 4.0 but in a practical way that enables supportive and are in fact contributing to the the entrepreneur to take advantage of their investment in our Laval facility. In order to support. compete with emerging economies, it is es- sential that governments offer support to aero- What is Mecaer America’s vision for the space companies to level the playing field. next three to five years? However, the industry also needs to stand on Mecaer America is focusing on diversifying its its own two feet. client base. We have created a strategy docu- ment using the MACH initiative to help us Are there any notable areas of development with this. We will also focus on investments and innovation on which Mecaer is current- into our product offering and new equip- ly focusing? ment. ▬
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports INTERVIEW
What have been the key developments tract with the U.S. Air Force, for example, since we spoke in 2015? the Canadian military will perform the quali- The highlight has been the progress in our ty assessment and vice versa. Therefore from contract for the Boeing 777 aircraft land- a defense standpoint, we are very integrated. ing gear, for which we had to invest over Similarly, we also export without any duties US$110 million on equipment and capacity. on the civil side. We hope that free trade will Since the contract was signed in December remain in place. 2013, we have built and expanded factories, installed the required equipment and have In light of an increased industry focus developed the manufacturing process. In on the environment, what initiatives is July 2016, our first shipment was five weeks Héroux-Devtek involved in? ahead of schedule and we are now in ramp- In the landing gear business, the typical coat- up mode. ing used for protection against corrosion and Following an acquisition in the United King- general wear is cadmium or chrome. We dom, we have been able to expand our cus- have developed some new coatings, such tomer base in Europe. We won a contract in as zinc-nickel to replace the cadmium as it South Korea to design and build the landing is potentially harmful and can cause cancer. Gilles gear for the next Korean Fighter, the KFX, We are therefore looking to replace this ma- working in partnership with Hanwha Corpo- terial where possible. In relation to weight, Labbé ration. we are developing a composite component for aircraft landing gear. Because of its na- In addition to capacity investment, were ture the product has to be very resistant. there any innovative aspects that needed developing for the 777 contract? The aerospace sector is also very focused The contract is build-to-print, but one thing on the implementation of Industry 4.0 and President & CEO we had to develop was the necessary sur- breakthrough technologies. What steps is HÉROUX-DEVTEK face treatment. These components are very Héroux-Devtek taking in this direction? large, and the landing gears are in fact the We are currently undertaking an initiative in 57 tallest in the world. The surface treatment is digitization of our manufacturing process, state-of-the-art and we installed some spe- using less and less paper, with visual in- cial equipment to machine titanium much structions on the computer. Additive manu- more rapidly. We have also installed flexible facturing in particular is a very interesting manufacturing systems (FMS) to automate technology for our product. In the forging of the process, through which one employee products, a very long lead time is required can run four or five pieces of equipment si- for building and obtaining parts from the multaneously, making us very competitive. supplier, plus the subsequent machining can We will also be the first in the aerospace result in wasting 80% of the material. Ad- industry to employ robotics to paint these ditive manufacturing reduces the long lead landing gear parts. This process is still un- time and can reduce the material cost and der development, but we should achieve our waste by large amounts. Additive manufac- goal by the end of 2017. The technology is turing will become more and more present being jointly developed with another Québec in our industry and will be a game changer. company. What is Héroux-Devtek’s strategy for The United States is a huge export market growth over the next few years? for Canadian aerospace companies. With Now that our U.K. subsidiary is well inte- many changes underway internally and grated, we have a solid business and are in potential changes to trade agreements, do ramp-up mode for the 777. The company is you foresee any challenges? financially in very good stead. Having sold Our industry is very linked to the U.S. mar- the industrial and aerostructure divisions of ket and we have long enjoyed a free trade our business in 2012 to focus on landing environment, even prior to concluding the gears, the growth pattern has been exponen- North American Free Trade Agreement tial: up from a US$250 million business to (NAFTA). Canada is considered an industri- US$400 million, and we are targeting half al domestic source for the United States De- a billion by 2021. We plan to make further fense. There was a treaty signed between the acquisitions in complementary fields such as United States and Canada called the Defense actuation systems and flight control where Product Sharing Program. If we win a con- there is a lot of IP. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations Global Business Reports 100,000 ENGINES PRODUCED. Driving 100,000 change REASONS TO GO BEYOND.
Engine manufacturers prove major proponents of R&D
In the midst of its assorted structural components lies the heart of the aircraft, its engine. Hugely transformed over the years through advances in technology and a constant drive for greater efficiency, aircraft engines are a significant R&D driver in Québec as well as other regions worldwide. All three major commercial engine manufacturers, namely Pratt & Whitney, General Electric and Rolls-Royce, have a base in Québec and have all made major contributions to the region’s ecosystem over the years. For example, GE Aviation’s Bromont facility recently agreed to a five-year grant pro- Every day, you inspire posal with Investissement Québec. This particular facility is considered highly advanced us to rise to the challenge due to its widespread use of automation and robotics. On the engines themselves, GE Aviation is driving implementation of new technologies such as additive manufacturing, of delivering state-of-the-art currently focused on its LEAP and GE9X engines. “We are investing a huge amount into engines; providing expert, additive manufacturing and CMCs on the GE9X, slightly modifying the architecture to digitally connected solutions improve performance,” highlighted Alain Ouellette, operations director at GE Aviation. for seamless customer service “At the same time, we have the Advanced Turboprop (ATP) in Europe where additive while relentlessly pursuing manufacturing will be a big game-changer. With ATP, we will replace over 800 parts transformative technology that with only 15 as additive manufacturing allows us to combine multiple parts into one.” Due to its first-in-class additive part for fuel nozzles, the LEAP engine is 15% more unleashes aviation’s potential fuel-efficient than CFM, clearly indicating the advantages this technology can offer. The to change our world. LEAP ramp up is set for completion in three to five years.
Learn more at pwc.ca As one of Québec’s four OEMs, Pratt & Whitney Canada plays a significant role in driving the region’s aerospace ecosystem, producing its 100,000th engine in April 2017. With over 60,000 engines in service in over 200 countries and territories, it comes as no surprise that the company’s prominent global position can largely be attributed to a continuous emphasis on innovation. Indeed, P&WC has over 23 ongoing university agreements in Canada and is partaking in projects with CARIC, CRIAQ and GARDN. The prominent OEM also runs 10 of the 13 Natural Sciences and Engineering Research Council of Canada (NSERC) chairs. Its PurePower® PW800 engine is now certified and exceeding performance expectations and its recent addition of Auxiliary Power Units (APUs) in 2015 has added a further 10,000 to the company’s fleet. “Our mission is to continuously inject technology into all of our product lines,” said Maria Della Posta,
QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports EDITORIAL
“ When it comes to serving our customers, our simple mission is "Performance. Personal. Guaranteed." More customization will also be the way of the future. Our focus is on bringing in different levels of customization and transforming our business model in line with global trends. We also play a leadership role in establishing the direction of some of the Canadian aerospace cluster initiatives. We need to join forces to ensure we have what it takes to bring 59 our vision to reality and promote senior vice president at P&WC. “We are working on the next large PT6 for general avia- tion and civil helicopters and have a big effort afoot to inject new technology in all of our Canadian aerospace on the world platforms. A consistent focus for us is developing next generation engines, which we are stage. currently working on. We will continue to bring a high level of capability in technology to all of our facilities in Canada and worldwide.” Applying advanced processes, the next developments on the horizon in tandem with - Maria Della Posta, product innovation center around health monitoring and predictive maintenance. Major Senior Vice President, engine manufacturers are seeking to reduce maintenance costs by ascertaining engine Pratt & Whitney Canada performance and accurately determining when parts might need to be replaced or ser- viced. P&WC, for example, has a new Oil Analysis Technology, which gives high vis- ibility into the health and efficient operations of the engine without intrusive inspection. Montréal-based SME AV&R is currently making waves in this area, as well as other applications for Industry 4.0 processes such as surface finishing and surface inspection. AV&R is in fact currently developing a solution with Rolls-Royce at its AMRC facility in Sheffield, United Kingdom. Speaking broadly of the advantages of AV&R’s technologies, Jean-François Dupont, CEO, commented: “We will be able to follow the complete life of a part–we digitalize ” the surface of the part so we know exactly where the potential defects are…This will allow us to monitor any deterioration and predict defects over the life of a part. In our extensive database, we will then be able to find where all these parts are involved and will be able to ground only the one plane with a potential defect. Normally, an engine is verified with all tests done on a computer with parts modelled after their initial design. All simulation parts are perfect. We will be able to simulate the real engine, recreating its real performance.” AV&R is currently operating off a backlog of airline orders for solutions to automate the production of plane engines, but will also focus on the medical device market in the future. With such strong representation within Québec’s ecosystem, the region is set to remain a hub for engine innovation and a driver of technologies such as automation and additive manufacturing due to the already-advanced capabilities of the cluster. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations INTERVIEW Global Business Reports
Alain Ouellette
Operations Director GE AVIATION
GE Aviation is a provider of commercial, compressor; all the compressor hardware we cannot restrict our activities. We need military, business and general aviation jet for LEAP comes from this facility. to follow our customers and businesses and and turboprop engines and components as adapt to the environment. well as avionics, electrical power and me- The Bromont facility is highly automat- chanical systems for aircraft. ed. In what ways is GE Aviation driving What are the next areas of innovation on progress in this area and what are the the horizon for GE? Since we met in 2015, what have been main advantages? LEAP is a big focus and GE9X is another. some of the major developments at the We consider automation to be one of the We are investing a huge amount into ad- company’s Bromont facility? major components for improving health ditive manufacturing and CMCs on the 60 GE Aviation’s Bromont facility has recent- and safety, quality and cost, which all im- GE9X, slightly modifying the architecture ly agreed to a five-year grant proposal with pact deliveries. Although companies began to improve performance. At the same time, Investissement Québec. The first compo- to implement automation in the 1980s and we have the Advanced Turboprop (ATP) in nent of the new grant is next-generation 1990s, we now have a better understand- Europe where additive manufacturing will turbomachinery that we have been working ing of automation and how it can best sup- be a big game-changer. With ATP, we will on with Airbus, Boeing and Comac. This port aviation needs. The cost of automation replace over 800 parts with only 15 as ad- facility is involved in the LEAP 1A, 1B, today is also much lower than previously ditive manufacturing allows us to combine and 1C engine and the investments over and processes are more flexible, manage- multiple parts into one. Additionally, the the next five years will be to support its able and widely available. The mission of military side of the business will likely take entry into service. The second component our team is to help our industry understand off between 2020 and 2022. is product manufacturing. The third com- where automation makes sense. We are working hand in hand with GE's ponent involves financially supporting our Global Research Center in Niskayuna and engineering business entities at the site to With significant operations in the United are very excited about the prospects for Ar- develop their capabilities, especially in vi- States, how is business segmented be- tificial Intelligence (AI). We have a lot of bration analysis. Québec will be supporting tween the different markets? data available but lack the power to ana- our global competitiveness with a grant of We cannot focus on the Canadian mar- lyze everything to make decisions. In the approximately US$12 million over the next ket because we do not provide a finished future, we will be a more connected facil- five years. We will use some of that funding product. However, we are trying to high- ity and AI will bring the computing power for product manufacturing and to become light Québec and Canada as a place to do to allow us to make decisions on analyzed more R&D-focused for the next generation business and our vision is to have a big- data on a continual basis. It will lead us to of GE's automation deployment. ger manufacturing presence in Québec. We do things differently and better. We are migrating from CFM production, need to be competitive with technology a technology of the 1980s, into our 2017 and innovation to stay ahead and we take What are the objectives for GE Aviation technology, LEAP. There is a huge dif- advantage of Québec’s strong ecosystem of over the next few years? ference between their manufacturing pro- SMEs, universities, academia and govern- In three to five years, our LEAP ramp-up cesses. LEAP has more technology on the ment support. should be completed and we will be look- engine, resulting in higher performance Meanwhile, our sales force is focused in ing at a cleaner, quieter engine for the next than CFM, and includes the first additive the U.S. and, whilst there is a degree of generation. Airlines are always asking for part for fuel nozzles, making it 15% more uncertainty surrounding the United States an engine with lower fuel consumption. fuel-efficient. LEAP also has ceramic ma- right now, our CEO has positioned us as With LEAP, GE9X, and ATP coming, the trix composites (CMCs) and an enhanced a global company. We sell worldwide, so next five years will be very dynamic. ▬
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports INTERVIEW
Rolls-Royce Canada Limited specializes in generated by the extensive infrastructure of providing civil and military aircraft engine Québec universities, collaborative research repair and overhaul services. centers, aerospace educational institutions, government support programs, as well as Could you give a brief introduction to a wide range of local suppliers and service Rolls-Royce Canada and the develop- providers that target the real needs of the ment of its aerospace presence since its aerospace industry. Québec also provides establishment in 1947? aerospace businesses with a competitive op- Rolls-Royce Canada was the first aerospace erating cost environment, as Montréal ranks plant built by our company outside the Unit- second for most competitive operating costs ed Kingdom. In the 1950s, we supported among major metropolitan areas in North primarily Canadian customers, such as the America specializing in aerospace. Royal Canadian Air Force, by perform- ing maintenance on their NENE, J-34 and Where is Rolls-Royce currently investing Tyne engines. Today, our Montreal plant has most R&D in relation to aerospace? grown into a successful and diversified aero- In 2016, Rolls-Royce invested £1.3 billion space repair and overhaul business, support- in research and development. These activi- Denis ing over 600 civil aircraft operators in 30 ties take place in various countries around countries. These include airlines, corporate the world, including Canada. Over the last Giangi operators, private jet owners and even some couple of years, our Montreal plant has famous Hollywood stars! played an increasing role in supporting the It is worth noting that Rolls-Royce currently development of the company’s new genera- employs over 1,000 people across Canada. tion of civil aerospace engines by further Outside of Québec, we also operate facili- developing its engine testing capabilities. ties and offices for the marine business in Recent investments allowed us to add new President Peterborough, Ontario; St. John's, New- capabilities to our service offering, such ROLLS-ROYCE CANADA foundland and Dartmouth, Nova Scotia, as as water ingestion and cold start testing. well as a state-of-the-art ice testing facility, These tests allow our R&D team to under- 61 GLACIER in Thompson, Manitoba, as a stand how the engine would perform when joint venture. exposed to severe weather conditions and form an important part of the certification What are Rolls-Royce’s core capabilities process for new business aviation engines. in Québec? Our Montreal site is an authorized mainte- As the industry moves towards Industry nance center for the BR710 engine, which 4.0 with encouragement from the Québec powers the Gulfstream V, G500/G550, the government, how do you see these tech- Bombardier Global Express and Global nologies impacting the market and sup- 5000 corporate aircraft; the BR715 engine, ply chain? which powers the Boeing 717 aircraft; the Industry 4.0 will bring about a much greater AE3007 engine, which powers the Embraer utilization of big data, which is a significant ERJ 135/140/145 regional jets, Embraer driver of providing effective and efficient Legacy and the Cessna Citation X business 'fleet management' in an MRO environ- jet; the Tay engine that powers the Gulf- ment to ensure overall customer satisfac- stream IV, 350, 400 and 450s. As a Center tion. This will support us in our on-going of Excellence for the repair of fan blades efforts to design innovative solutions to our and combustion chambers, our Montreal customers’ needs, while continuously im- plant also offers component repair services proving our manufacturing processes and for a wide range of Rolls-Royce products, business performance. including the Trent, RB211 and BR700 en- gine family. What are the primary objectives for Rolls-Royce Canada going forward? Are there any particular advantages to Rolls-Royce Canada’s primary objectives Québec’s operating environment over are to continue to be our customers’ first other parts of the world? choice for civil engine maintenance repair The Montréal aerospace cluster is one of the and overhaul services, while developing world’s three major aerospace centers, along new capabilities and technologies to support with Seattle and Toulouse. This gives us ac- the development and test of the next genera- cess to an excellent pool of skilled labor tion of Rolls-Royce civil aircraft engines. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations EDITORIAL Global Business Reports
Avionics
Facilitating Safe Flight
Covering a wide range of applications, avionics play a critical and avionics systems and is enrolled on programs with companies role in aircraft. From performance optimization to flight safety, such as Bombardier, Cessna, Gulfstream and Embraer. Placing essential functions catered to by this segment include flight con- a strong focus on R&D, Thales Canada is a key contributor to trol, navigation and collision avoidance. Québec is home to three programs such as SAGE and SA2GE and also collaborates with particularly prominent players in this field: Rockwell Collins, CRIAQ. Notably, Thales has recently acquired a Big Data com- Thales Avionics and CMC Electronics. pany in Silicon Valley, further securing its position as an impor- A division of Thales, headquartered in France, Thales Canada fo- tant player in Montréal’s bid to be a thriving artificial intelligence cuses on the design and integration of flight controls, fly-by-wire (AI) and Big Data cluster. 62
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IndustryCanadaAvionics16_English_C39299.016_118x167_Jul17_QuebecAero_v2.indd Explorations QUÉBEC AEROSPACE1 2017 12/07/2017Global Business 10:00 Reports Global Business Reports EDITORIAL
Image courtesy of Rolls Royce Canada
Rockwell Collins, although a U.S. compa- ny, has a strong Canadian base focused on its government systems and commercial systems business units. Also with a strong innovative edge, the company is focused on improving its Pro Line Fusion product line, which includes its flight management systems (FMS). 63 As well as a number of developments in fly-by-wire systems, one of the key trends in cabin systems is the shift from hard to touch interfaces, including in the cockpit. Another is aircraft connectivity, an area of focus for both Thales and Rockwell Col- lins. “Almost every air framer is interested in obtaining diagnostic data from aircraft,” noted Louis Brunet, director of business development, business aviation at Rock- well Collins Canada. “We support these efforts and have product solutions that enable in-flight data acquisition and com- munication. Rockwell Collins also has the capability to provide many of the services related to connected aircraft, such as mov- ing data on and off an aircraft. We are also looking into investigating the internet of things (IoT) for Interior Systems.” Along similar lines, Thales has developed the Iridium Next SATCOM transceiver and Topmax, a head-worn display to re- place more expensive head-up displays (HUDs). As aircraft move towards connectivity and manufacturers place greater importance on data collection, Québec’s avionics leaders are well positioned to drive this innova- tion and form an integral part of the supply chain. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations INTERVIEW Global Business Reports
Michel Grenier
Vice President & General Manager THALES CANADA
Thales Canada focuses on the design and integration of flight con- hosted together into one box. This allows OEMs to have fewer trols, fly-by-wire and Avionics systems. computers on board and reduces cost as they need only to acquire the software functions rather than the full hardware. We are also Thales has a strong presence across Canada. Could you give a trying to reuse more products that are available within the group brief introduction to the company’s Québec operations? and adapt them to our market. Our Québec operations center around the aerospace sector, specifi- It is important to note that safety is always first and will never be cally the business and regional aircraft market. We are involved in compromised for cost reduction activities. Whatever we do has to programs with Bombardier, Cessna, Gulfstream and Embraer and be safe because we manage the highest level of criticality in an primarily offer flight control and Fly-By-Wire (FBW) and Avionics aircraft. Cost reduction comes into play early in the design phase systems. The products are complex and require the highest level and in the equipment manufacturing. 64 of safety. We have about 160 employees in Montréal and are very involved in the Montréal cluster. With the support of the Québec A lot of innovation is stemming from startups and universities. and Canadian governments, we are investing heavily into the de- How is the innovation environment evolving in Québec? velopment of new products that go beyond the pure flight control Canada in general has a very strong innovation environment and systems we currently offer. we are well-supported by the governments. For example, we have Recently, we have been quite successful at Textron Aviation with programs with the Quebec government on SAGE I and SAGE II to Cessna, where our rudder-by-wire system has been selected for continue development of the MACC initiative. Another program the Cessna Longitude Program. We were also selected by Cessna is with the Canadian government and Bombardier for technology on their latest business jet, the Hemisphere, where we provide the demonstration, where we are developing flight control applications full flight-by-wire system for the aircraft. This is similar to the full for future aircraft. We also have projects with CRIAQ to develop flight-by-wire systems we have been producing for Gulfstream and technology with low readiness level (TRL). we certainly hope to sell this great product to other OEMs in the Thales has been involved with the artificial intelligence (AI)/Big future. Data cluster in Montréal and has made a recent acquisition in Sili- con Valley of a company working on big data. We recognize that Are there any changes in requirements for the flight control we need to be involved in this sector to develop the right solutions systems and the fly-by-wire systems? in the future particularly for data collection and predictive mainte- Yes, to some extent. For example, at Gulfstream, we have been nance. Connectivity is another important topic for Thales and we adding functionality to the G500/G600 Flight Control Computer are now proposing to our customers the Iridium Next SATCOM (FCC) compared to the first system we delivered the G650, such transceiver developed by our colleagues in Florida. Finally, we are as the autopilot inner-loop and the Active Side Stick back drive working at bringing to the market an innovative Headworn Display controls. We are trying to embed other critical functions into that called Topmax that would replace the more expensive Head Up system wherever possible. Display (HUD) on some market. Of course, we keep an eye on the defense industry because it is a strong area for innovation. There is a lot of cost pressure from the OEMs on the supply chain. How is Thales adapting? Going forward, what are the key objectives for Thales in Qué- All our customers are asking us to be more competitive, so we bec? are trying to come up with solutions that allow them to achieve We are looking to grow globally and to further develop products their targets. One of our products currently in development is the similar to flight controls and are heavily involved in selling other Multi-Application Critical Computer (MACC), which is designed products from our global business unit. Our business in Québec has to combine several aircraft computers into one. We have designed grown over the last few years and we are certainly looking forward sophisticated control mechanisms to allow critical functions to be to this continuing. ▬
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports INTERVIEW
Rockwell Collins Canada is focused on the more pronounced in business aviation but production and support of advanced avion- is also creeping into air transport. Our lat- ics and communications systems and sys- est programs have focused on touch-control tems engineering services. primary flight displays in the cockpit, such as those in Beechcraft’s King Air. We’ve Could you provide an introduction to also applied these in the aftermarket to in- Rockwell Collins’ operations in Canada? service King Air’s Citation CJ3’s and we are Our business in Canada reflects two Rock- now developing a solution for Bombardier’s well Collins business units: Government Challenger 604. Anything that pilots would Systems, catering to defense clients, and have once completed using a dial knob or a Commercial Systems, catering to business keypad can now be done via touch. and commercial aircraft. Our commercial systems operations are lead from Montréal What areas of product innovation is and provides services for business, regional Rockwell Collins currently working on? and main-line aircraft. We focus on sales Rockwell Collins has a history of innova- and customer support for the Canadian mar- tion which it continues to build on. We are ket, with Bombardier being a key client. Our continuously working on improvements to Louis engineering team integrates our systems our Pro Line Fusion product line, including into Bombardier’s aircraft providing inte- our flight management systems (FMS). We Brunet grated avionics suites, cabin management have secured over 20 aircraft programs with systems, communications systems and flight Pro Line Fusion, each of which requires a controls systems. unique instance of the core product. For Under our chairman, president and CEO, example, the C-Series has specific engine Kelly Ortberg, Rockwell Collins is grow- systems, flight data recorder and other avi- ing quickly. In 2013, we purchased ARINC, onics systems that we need to be integrated Director of Business Development, now Rockwell Collins Information Man- with the core Pro Line Fusion product. Mis- Business Aviation agement Systems, making us a leader in sion requirements also require FMS product ROCKWELL COLLINS flight services. Most recently, in April developments such as future air navigation 65 CANADA 2017, Rockwell Collins also acquired B/E systems and the required navigation perfor- Aerospace, now Rockwell Collins Interior mance authorization procedures. Systems, adding passenger cabin interior products for the commercial and business How is Rockwell Collins taking advan- jet aircraft markets to our portfolio. tage of Industry 4.0 processes to influence design of its products? What accounts for Rockwell Collins’ suc- The connected aircraft is an area we are cess as a key provider of integrated ser- moving into. Almost every air framer is in- vices in the supply chain? terested in obtaining diagnostic data from Rockwell Collins is committed first to our aircraft. We support these efforts and have customers’ success. This means we focus product solutions that enable in-flight data first on issues, working to ensure -that de acquisition and communication. Rockwell velopment and manufacturing operations Collins also has the capability to provide are productive. We build long term relation- many of the services related to connected ships based on trust. aircraft, such as moving data on and off an aircraft. We are also looking into investigat- How have demands from the OEMs ing the internet of things (IoT) for Interior changed in recent years? Systems. The industry is reaching a phase Demands from the big OEMs are becom- where technology uptake is accelerating. ing increasingly contractual. This has come However, it will always be constrained by with an influx of staff from the automotive the industry’s low volumes. sector to the aerospace industry, which has empowered supply chain departments. Con- What are Rockwell Collins Canada’s pri- tractual requirements for suppliers have mary objectives with regard to Québec? multiplied under their influence. We want to maintain and build on our re- lationship with Bombardier and apply our How has product demand changed in line expertise to a wider range of clients. As the with changing consumer expectations? region rolls off a development cycle, the The biggest change has been a rapid migra- company is maintaining the center of excel- tion from hard to touch interfaces. This is lence it has built in Montréal. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations EDITORIAL Global Business Reports
Enhanced experiences: Cabin Interiors
In commercial aircraft, many aspects of the cabin interior and its associated sys- tems are changing as airlines and aircraft “ manufacturers seek to enhance the passen- ger experience. From companies providing 66 integrated solutions to those with niche For years, the industry was focused expertise to apply, Québec’s aerospace on the evolution of technology ecosystem has a broad range of companies associated specifically with flight. catering to this field. However, due to a number of changes On the more integrated side lies GAL Aero- such as regulatory and environmental space, a poster child for companies follow- concerns, aircraft interiors became ing an aggressive consolidation strategy. a major focus. Making the aircraft “We recognized that the aerospace industry was consolidating and looked at the poten- lighter has always been at the center tial opportunities that arise with change,” of investment but we now also have commented Glen Lynch, GAL’s president an enormous increase in passenger and CEO. awareness. There is a requirement Growing from 11 employees in 2011 to for more efficient use of space and 200 today, the interiors company started as creating the illusion of more space a build-to-print cabinet shop and now has than there might be. extensive capabilities in engineering, ad- vance composites and even aerospace staff- ing. 40% of the company’s business lies in commercial aviation with the remaining - Glen Lynch, 60% in business aviation. “Since most President & CEO, of the new aircraft programs are already launched and underway, most of our cur- GAL Aerospace rent growth is in the in-service commercial market,” noted Lynch. “However, in terms of customers, our biggest area of growth right now is with airlines. We can offer our services from the conceptual phase right through to certification.” A prime example of a highly specialized company is GGI Solutions, which has de- veloped its niche in Human Machine In- ” Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports EDITORIAL
Image courtesy of Ingenio Aerospace terface (HMI) solutions and technologies. away from traditional hardwired, clunky proval Organization next. “Most compa- “As HMI specialists, our designers under- video monitors to a Personal Electronic nies would not pursue these goals as they stand the ways in which humans interact device-driven system. We focused on very can create significant complexity, but they with a system and our engineers are experi- highly stylized, functional electromechani- would allow us to design, manufacture and enced in designing and producing solutions cal products; everything from Tablet arms, certify our own products,” commented that are of high quality and reliability while to Smartphone holders as PC-based cabin Bell. “Transport Canada has taken us un- ever striving to reduce cost,” explained Eric controllers. We also introduced Bluetooth der its wing as a young, innovative Cana- Saint-Jacques, CEO at GGI. Referencing receivers to relay audio directly to the air- dian company producing a large number customers such as Boeing, Airbus, Rock- craft’s CMS through a phone, Bluetooth of products for aviation. They have been well and Stelia Aerospace, Saint-Jacques wireless headset transmitters, projectors nothing but excellent to deal with for IN- continued: “This is why these customers for presentations inside cabins and person- GENIO.” 67 turn to GGI with continued demand for our alized LED Reading lights.” INGENIO will continue to focus on inno- solutions. GGI is also working higher up in INGENIO is now pursuing CAR 562 vation and has begun to build a pathway the supply chain with the design companies manufacturing approval from Transport into commercial aviation to take advantage that work with the airlines to create the op- Canada and aims to become a Design Ap- of the segment’s higher sales volumes. ▬ timal user interfaces right at the outset of the cabin interior design process.” GGI aims to be a global conglomerate by following an acquisition strategy and con- “ tinuing to invest in innovation. We envision a world in the near future where airplanes are a platform on As more emphasis is placed on the custom- er experience, companies could well look which different applications and experiences can be accessed onboard. to the business aviation space for inspira- This is becoming increasingly important for passengers and will completely tion. Companies such as Innotech Aviation revolutionize the way we travel. The increased use of cell phone applications lead the way in beautiful design, recently for completing daily tasks will naturally translate into aircraft. In the future, joined in the market by Austrian interiors passengers will simply ‘google’ their destination then customize their trip company F. List. according to their unique entertainment, dietary and seat pitch preferences. Whilst aesthetics are hugely important in It will no longer matter what airline seat one chooses, rather what one can this market segment, functionality is also do with the seat. Different seating configurations are also being discussed by key. INGENIO Aerospace is one of Qué- airlines, including benches and standing room to fit more people per flight. As bec’s rising stars when it comes to SMEs companies start designing open-platform aircraft where customizations can be excelling in a selected niche. Established made easily and affordably, innovation will continue to snowball. only in 2012, the company has already de- signed 34 products and has 14 more in the pipeline. “Many OEMs and Tier 1s were moving towards software-centric cabin - Mark Makoukji, entertainment systems, but the desire of Managing Partner, the customer was to bring the consumer P3 Group market into the cabin,” outlined INGEN- IO’s CEO, James Bell. “We designed new hardware infrastructure for cabins moving
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations” INTERVIEW Global Business Reports
Innotech Aviation offers services in the huge retraction in the luxury goods market- business aviation segment, including main- place. Generally, there seems to have been tenance repair and overhaul (MRO), re- a bit of a lull by which we have been some- furbishments, avionics upgrades and full what affected. Our work is therefore al- green aircraft completions and paint. ways cost sensitive. However, because the requirements are more specific, customers Could you briefly outline any key mile- will continue to pay more for the expertise stones for the company and where Inno- if they are confident in the capabilities of tech Aviation positions itself in the mar- their supplier. Therefore, although the mar- ket today? ket has definitely slowed, demand for our We built the Montreal facility in 2015 to services as a premium supplier of unique accommodate the growing fleet and scale and customized products remains high. of aircraft, primarily driven by the develop- ment and capabilities required for the large What measures has Innotech taken to Bombardier aircraft. ensure environmental friendliness in line Our approach is to offer our clients a full with recent trends in paints and coat- range of services and we have always been ings? Rob regarded as a very high-quality one stop Our facility here is a purpose-built paint shop. Beyond top-quality service across the facility for aircraft based on very stringent Brooks board, customers are able to benefit from environmental standards that are set and our knowledge, expertise and background monitored by the local municipality and in refurbishment, including areas such as province. The environmental side is always upholstery, woodwork and specialty fibers. a challenge because the aircraft surface is Most of our work is done in-house, with the subjected to extreme variations in tempera- exception of plating and some certification ture and other conditions. Adhesion is very Vice President and General Manager testing. Innotech offers and delivers high- critical, so we have a very expensive filtra- INNOTECH-EXECAIRE ly-customized aircraft with technological tion system in place. Our facility is one of 68 AVIATION GROUP applications such as communication tech- the few in Montreal that meets and exceeds nology, entertainment systems and LED the high environmental standards of the re- lighting. In the past, we have met highly- gion. specific customer demands, such as LED crystal lighting with luxurious LED-inte- How do you expect the market to evolve grated Swarovski crystal chandeliers and going forward? wall appliqués for one particular aircraft. Airlines are working on making flying easier, quicker and more comfortable. The How diversified is Innotech’s customer autonomous vehicle is coming soon but it base and do requirements differ between might take some time to develop. Drones regions? are also coming more into play and we are The main growth we see is in opportunities starting to see air taxis in Dubai. However, arising from the support of aircraft through our industry has a long way to go to be able deliveries for Bombardier and the accom- to accommodate this model. panying refurbishment and maintenance work. Over the last two years, Asia has What are the objectives for Innotech seen somewhat of a quiet period but activ- over the next few years? ity is picking up again and demand is grow- We will continue to offer specialized ser- ing. We have had ties with companies in vices and provide custom work and main- Asia and the Middle East for over 30 years. tain our position as a global market leader in quality and standards, delivering the lat- Many companies within the aerospace est in communication and finishing tech- sector are responding to increasing cost nologies. We are not trying to be every- pressures. How do these pressures trans- thing to everybody. We want to work with late to the business aircraft market? customers looking for bespoke interiors There is a huge amount of cost pressure on and continue to implement technology that the industry as a whole. These are trying no one else has successfully incorporated times in terms of cost management and cost into aircraft. Another area of focus is the control for the entire industry and owners delivery of aircraft communication access of the aircrafts. No one region is showing in blackout areas in the next two to three more strength over any another. There is a years. ▬
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports INTERVIEW
Glen Lynch
President & CEO GAL AEROSPACE
The GAL Aerospace Group of Companies is a North American to certification. Finally, there is the aerospace staffing part of the based 'super sub- tier' supplier to the aerospace interiors market. business, with three areas of focus: field and technical support, basic staffing services, and aircraft modification and installation. GAL Aerospace was established in 2011 as a reaction to indus- try trends such as consolidation in the supply chain. Could you In such a cost-sensitive market, where are OEMs currently expand on the motivations and circumstances surrounding the willing to increase spending? company’s establishment? Cost used to be the number one consideration with weight a close We recognized that the aerospace industry was consolidating and second. They are now neck-and-neck but often flip back and forth. looked at the potential opportunities that arise with change. For There is always pressure on cost and some of that challenge is years, the industry was focused on the evolution of technology driven by globalization. The need to compete with companies 69 associated specifically with flight. However, due to a number of in other parts of the world creates pressure on those in typically changes such as regulatory and environmental concerns, aircraft higher-cost jurisdictions. interiors became a major focus. Making the aircraft lighter has Due to environmental changes, aesthetics have become key. In the always been at the center of investment but we now also have an last 18 months, we have developed a capability for hydrographics enormous increase in passenger awareness. There is a requirement in our Atlanta and Montréal facilities. Through this technology, we for more efficient use of space and creating the illusion of more have the ability to produce almost a limitless number of finishing space than there might be. The passenger cabin area has seen a potentials in both the business jet and commercial environments. great deal of evolution and, because it had not previously been an area of focus for the major players in the industry until a number Does GAL actively pursue partnerships with other entities in of years ago, it presented a tremendous opportunity, furthered by a the Québec region, particularly SMEs and universities? lack of manufacturing capacity within this space. By nature, SMEs do not tend to trust each other because they are all competitors, but we do collaborate in the United States. Our How has GAL developed over the years with its numerous ac- facility in Atlanta works very closely with the Georgia Institute quisitions? of Technology, for example. They are very involved in assisting The company has grown from 11 employees in 2011 to 200 today. us with product evolution, R&D development, staff development We started out as a build-to-print cabinet shop. Now, we have de- strategies and training. In Québec, we do work with the aerospace sign engineering capabilities. We partner with local engineering educational institutions but more on the staffing side. firms and also have our own engineering department based out of Bogota, Columbia. In Atlanta, Georgia, we have an advanced What will be the main areas of focus for GAL going forward? composites facility that builds countertops, fairings, VVIP show- The main change for us for at least the next five years is to fo- ers and other composite components. In Montréal, we have a cus more on direct OEM relationships and end-user requirements. large aircraft cabinetry for monuments and machine parts and a North America is our biggest market but we are now doing busi- machine shop that runs 24 hours a day. The goal was for GAL to ness in Europe and China and the Middle East. We will continue become a super sub-tier supplier. to follow the opportunities as a team of outstanding professionals Our customer base is currently split about 60:40 between business who are all motivated to provide solutions in the areas of business and commercial aviation. Since most of the new aircraft programs and commercial aircraft cabins. We want to be involved in the are already launched and underway, most of our current growth is evolution of new technologies and new manufacturing methods. in the in-service commercial market. However, in terms of cus- We are also interested in becoming a partner and willing to engage tomers, our biggest area of growth right now is with airlines. We in risk sharing as well as the development of products and solu- can offer our services from the conceptual phase right through tions. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations INTERVIEW Global Business Reports
Mario Lepine
General Manager F. LIST CANADA CORP. AV
F/LIST is an Austrian company specializing is also high. We therefore need to be very monolithic pieces of furniture with many in interiors for business jets, currently es- creative to attract talent and retain it. shapes and curves and a narrow radius. tablishing a presence in Québec. Furthermore, we have a strong coopera- How will F/LIST's capabilities in Laval tion with INAIRVATION, the joint venture Could you briefly introduce the company differ from those in Austria? between Lufthansa Technik and F/LIST. and the reasons for establishing a base in We want the capabilities to be exactly the INAIRVATION offers amongst others, a Laval, Québec? same; a manufacturing facility with an R&D chair which is a fully certified seat-concept F/LIST is strongly rooted in innovation, area. This will enhance our strategies with for different configurations (club, office with a portfolio including products such the possibility to determine which facility and lounge model) and design possibilities 70 as F/LIST® STONE FLOORING, which is most suitable for specific R&D projects without any expensive additional testing as could be optionally heated. We have found to distribute the work more efficiently. We well as pre-developed retrofit packages for a niche within interiors and have developed will also have a section to prepare veneers, the Bombardier Global 5000 / 6000 plus ways to bring more beautiful top-of-the-line initially supplying our North American cus- Challenger family and for the Gulfstream furniture into airplanes. In Austria, our re- tomers, which makes sense because the raw G450 / G550. search and development department is con- materials come from this region. After that, stantly introducing new materials and new we will be introducing some furniture that Could you expand on the potential for ways of making furniture. We decided to we recently negotiated with Bombardier on collaboration with universities in Qué- develop a presence in Québec as a supplier its Global 7000. bec? to Bombardier and because 70% of the busi- We will start collaborating with universities ness jet market is based in North America. at the end of 2018 or 2019. This will be the In addition, we wanted to be closer to the Could you expand on some of F/LIST’s next step after completing the new facility, refurbishing market, which we are currently R&D work? ramping up production, and introducing as- entering. A lot of work is being done in F/LIST floor- sembly. Québec is a great place for R&D; ing solutions, especially on hardwood and the presence of so many excellent universi- F/LIST intends to increase its employees leather floors. We are also producing very ties is one of the region’s unique character- in Québec from 15 to 100 by 2020. Are high quality lightweigth stone for cabin istics. there plans to source from Québec’s tal- interiors (e.g. granite for countertops in the ent pool? galley or lavatory section) with better aes- What are the objectives for F. List’s Qué- The focus is to hire from Québec but there thetics because our material is really natu- bec operations going forward? are no borders when it comes to talent. There ral, but also thin and flexible to be wrapped We want the facility to be up-and-running will be representatives sent from Austria to around edges. Usually, the cabinet is made by October 1st, 2017. We will start with the transfer knowledge and some of our Québec and the veneer slipped on top. At F/LIST, veneer section, then set up the assembly staff sent to Austria to learn as well. It takes however, every part is installed with veneer and start the refurbishing section. We will time to transfer knowledge acquired over first and the assembly takes place after. We have to set up a team to attend to MROs and many years, so there will be a higher degree also have a close collaboation with HILI- provide repairs. There are no competitors of movement in the initial stages. Also, as TECH, the joint venture between F/LIST in this industry; all SMEs need to focus on veneer specialists are quite rare in Québec, and Hintsteiner Group, to develop new fur- their core business, work hand-in-hand and we will have to search for workers with that niture made from carbon fiber, which have collaborate with each other. This is how we talent. Québec has an extraordinary talent 15% to 25% less weigth in comparison to will make the industry better and stronger pool compared to many regions but demand conventional cabinets. We are able to make than ever. ▬
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports INTERVIEW
James Bell & Antony Rawlinson JB: President and CEO AR: VP Sales & Market Development
INGENIO AEROSPACE JB AR
INGENIO Aerospace is focused on the de- cabins moving away from traditional hard- Has INGENIO encountered any challeng- sign, certification and manufacture of -elec wired, clunky video monitors to a Personal es in certification processes? trical and mechanical components for the Electronic device-driven system. We focused It is difficult to start a company from scratch aerospace industry. on very highly stylized, functional electro- in aerospace, in part because regulation and mechanical products; everything from Tab- certification standards are very high and Since its establishment in November 2012, let arms, to Smartphone holders as PC-based complex. Just simple products cost hundreds where has INGENIO found its niche in the cabin controllers. We also introduced Blue- of thousands to certify; the investment is sig- market? tooth receivers to relay audio directly to the nificant and the risk is high. Mistakes are not INGENIO spent the first 22 months of its ex- aircraft’s CMS through a phone, Bluetooth permitted. istence focused on product development af- wireless headset transmitters, projectors for Attaining AS9100 certification, the aero- ter researching niche markets in aviation that presentations inside cabins and personalized space ISO standard for example, is an in- offered the most opportunity for sales of in- LED Reading lights. credibly laborious exercise. Just jumping this novative electromechanical products. Whilst hurdle is significant for a young company. 71 aerospace has higher barriers to entry than How do you cater to different demands Having achieved AS9100, the next steps for many other industries, the procurement cycle from customers and implement their us are to continue to do the basics exception- in corporate aviation is relatively shorter than needs from the design phase? ally well. that of commercial aviation. Subsequently, it The design and concept for our products al- is more straightforward to penetrate OEMs ways begins with the customer. Our designs In what ways can you ensure that INGEN- and Tier 1s with innovative products. We flow from what customers are looking for: IO continues along its growth trajectory? therefore focused on this market with niche, something highly stylized yet very organic We now have our sights set on achieving targeted electrical and mechanical products and unobtrusive. CAR 561 manufacturing approval from for passenger use in the cabin and with pilots Transport Canada, which would allow us to for cockpit products. INGENIO has designed How integral is innovation to INGENIO’s manufacture and certify our own parts. Next, 34 products within three years and currently rapid growth and success? we want to become a Design Approval Orga- has 14 additional in the pipeline. In an industry with high barriers to entry nization to complete design certification on We began with the design of new products and many larger companies, our intellectual our own as a Transport Canada design del- to help facilitate the Wi-Fi wireless environ- property (IP) is an extremely important asset. egate. Transport Canada has taken us under ments in corporate aircraft. We penetrated a Some of the big players have phenomenal its wing as a young, innovative Canadian number of OEMs such as Bombardier, Das- resources and can easily be inspired if they company producing a large number of prod- sault, Sikorsky, Boeing and L-3 Communi- catch wind of a good idea. Our strategy has ucts for aviation. They have been nothing but cations; Mitsubishi on the commercial side; been to approach aircraft manufacturers and excellent to deal with for INGENIO. and Rockwell Collins a major Tier 1. Ap- operators directly with our products and solu- proximately 98% of our sales are exports and tions rather than having a wide after-market What are the objectives for INGENIO extend across the United States, Europe and entry strategy. Now that INGENIO products over the next few years? Asia. are recognized by many of the critical players The concept is to be product innovators in in the market, we are beginning to roll them the aerospace market. We will likely be tri- What are some of INGENIO’s flagship out more widely. With our solid foundation pling or even quadrupling our business over products? for innovation, product development and the next few years. As well as developing Many OEMs and Tier 1s were moving to- speed to market it is now very difficult for new product lines, we have been doing sig- wards software centric cabin entertainment companies to copy our products. Our busi- nificant research into different niches and systems, but the desire of the customer was ness is growing at a rate of about 50% to 60% to start building pathways into commercial to bring the consumer market into the cabin. per year, despite difficult market conditions. aviation, which is where the higher volume We designed new hardware infrastructure for Product innovation is driving our growth. sales are. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations INTERVIEW Global Business Reports
GGI Solutions is a global leader in the de- tural surfaces, like a seat armrest. Our print- Eric Saint- sign, engineering and manufacturing of Hu- ed electronics solutions enable us to provide man Machine Interface (HMI) solutions and frequency-protection flexible shields that al- technologies. low the augmentation of Wi-Fi access points Jacques & to provide better coverage for passengers What are some of the most notable devel- and better protection for the cock-pit by pre- Steve Birrell opments that have taken place at GGI So- venting outside access over Wi-Fi or other lutions since we met in 2015? frequencies. GGI is privileged to have been acquired by ESJ: CEO a private equity team that includes Caisse Cost saving across the supply chain is a SB: VP Sales and Marketing de Dépôt et Placement du Québec (CDPQ), prominent theme in the industry at pres- GGI SOLUTIONS Fond Manufacturier Québecois and Namakor ent. How does GGI ensure cost savings Holdings. CDPQ has over C$260 billion of while still maintaining quality? assets under management and provides GGI The acquisition by GGI’s new partners en- with the financial resources to fuel its inter- ables us to bring in top talent from global national growth-through-acquisition strate- leaders such as Esterline CMC, Thales, Al- gy. GGI’s financial partners share a common liedSignal and Inmarsat to re-structure and vision of long-term value creation and can optimize our entire supply chain and go-to- now support the company as it grows inter- market teams. We are firmly embarked on nationally. GGI now has access to the finan- cost reduction initiatives that will also drive cial resources, management experience and higher quality through greater efficiency and market partners to position the company to reallocation of resources. The entire aero- its maximum potential in international mar- space ecosystem is under price pressures. It kets. Aerospace and Defense is a core area is our responsibility to respond to this pres- of focus and we intend to make acquisitions sure and ensure lower costs for our clients. internationally both to grow our geographic Quality, on-time delivery and innovation are 72 ESJ reach and to add additional technologies and the ante to enter the market but now more products to GGI’s portfolio. GGI now also than ever, cost reductions are an essential has a very focused and innovative R&D team element of our value proposition to custom- creating high value IP in the field of printed ers; AS-9100 certification is not enough in electronics, including curved capacitive sur- of itself. This is why GGI has launched an faces, printed flexible frequency shields and ambitious and innovative program to restruc- printed heating surfaces. ture and consolidate its global supply chain across all four of its key verticals, which will Could you elaborate on GGI’s human ma- directly benefit aerospace customers. chine interface (HMI) product portfolio for the aerospace market? Can you tell us more about your defense GGI’s main product areas are membrane offering? switches, electromechanical integrated solu- GGI provides defense-orientated interfaces tions, printed electronics, application-based for highly complex and mission critical de- virtualization of HMI and voice recognition. fense systems. Our products and solutions SB Our presence spans various sectors, includ- focus on protecting human lives. For ex- ing medical, industrial, transportation and ample, GGI provides the control panels and aerospace and defense. On a commercial masks for explosive ordinance disposal suits aircraft, GGI provides solutions at every and control systems for personnel protection interaction point where passengers or crew communication systems. interface and control equipment and sys- tems: seat controls, in-flight entertainment Where do you see GGI in three to five systems, lighting systems, ovens, other gal- years’ time? ley systems, and so on. GGI designs these GGI will be a global conglomerate with a interfaces to enhance the passenger experi- geographic presence in every market through ence and facilitate crew operations by de- strategic acquisitions. We will be investing livering durable and efficient solutions. Our ever more in innovation and R&D across our solution portfolio is broad and extends past five key product/technology pillars; electro- electromechanical systems. For example, mechanical solutions, membrane switches, GGI’s touch surface technology enables us printed electronics, handheld app and voiced to embed system control directly into struc- based control interfaces. ▬
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports INTERVIEW
Eric Gagnon Vice-President and machine interface expertise, which is where LSI Canada fits into General Manager Astronics. We offer anything from lighted panels and avionics key- ASTRONICS - LSI CANADA boards to full control panels and sometimes integrated displays.
What are some of the greatest areas of focus when it comes to innovation? Astronics – LSI Canada focuses on the design, manufacture and The rapid shift towards touch services is a trend to which we pay a service of lighting and electronic systems for the aeronautics and lot of attention in determining our next projects. related industries. Is LSI Canada making use of Industry 4.0 technologies, such Astronics’ Québec division is a center of excellence in human- as increased automation and digitization? machine interface (HMI). Where does the division fit into the The automated processes we have in place for testing lighting is key, wider company? as is the automation of all of our electrical tests. We are currently Astronics Corporation (NASDAQ: ATRO) is the trusted provider spending a lot of time trying to automate these processes as much of innovative solutions in lighting, power, connectivity, entertain- as possible. It saves time, increases test coverage, reduces potential ment, and test systems for the world’s aerospace, military, and other human error and provides valuable data to increase future perfor- high reliability industries. Annual revenue for 2016 was about $630 mance. million. Astronics consists of an aerospace and a test segment. The aerospace segment accounts for the majority of sales and is divided What are the key goals for LSI Canada over the next five into five product areas, including “Lighting and Safety”. LSI falls years? under the Lighting and Safety product area and manufactures at lo- Our pillars of success are performance, service and innovation. Tier cations in New Hampshire, New York and Montreal (LSI Canada). 1 avionics companies are currently looking into outsourcing higher 73 Across these divisions, we work on external lighting, cabin light- value content and we believe we are well positioned to provide that ing and cockpit lighting. Within cockpit lighting, we have human- service. ▬
How has the government helped Luxia grow? FL: In 2016, the federal government provided Luxia with C$100,000 to invest mainly in 3D scanning technology. Because Francis Labonté & private aircraft owners usually do not have their own drawings of their aircraft, it can take about eight hours to create a template of business jets like the Bombardier Challenger 350. However, the Eric Roberge 3D technology we have developed can create a digital template in about an hour. With the help of the government funding, we also updated our ERP system to replace the paper-based system the company had before. FL: CEO and Owner ER: CFO and Owner What recent trends have you noticed in the market? LUXIA INNOVATION FL: Hard flooring is becoming more popular in aircraft cabins be- cause it is easier to clean. Recycling has also become a theme in the market.
Could you provide a brief overview of Luxia’s history and What are Luxia’s key objectives in the next few years? main activities? ER: The next step is to penetrate the U.S. market. Luxia works with ER: Luxia, a company of 20 employees, has been in operation for all the major companies in Canada that would buy floor covering, 27 years and grew from a small business run by an artist produc- such as Air Canada and Bombardier. However, there are many ing carpets for commercial and residential buildings. In the 1990s, more private aircraft owners in the United States compared to he was approached by Bombardier to work on the CRJ platform Canada which presents a big opportunity. Luxia plans to capitalize and over the years the company’s business with Bombardier grew. on this opportunity either through opening a plant or through an Francis and I purchased the company three years ago and made the acquisition. We are confident we are the best in the business, which decision to focus solely on aerospace. means Luxia will continue to grow. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations EDITORIAL Global Business Reports
Driving efficiency to increase competitiveness: Québec’s service and equipment providers
Due to aerospace suppliers’ increasing corporate director at AKKA Technologies, North American market,” said John Man- focus on efficiency and cost reduction as an engineering and technology consulting narino, president at Mannarino Systems they endeavor to meet ramp-ups on exist- company. & Software Inc. “We have seen more cost ing platforms, companies offering solu- As well as increasing efficiency on exist- pressure from South American and Asian tions to accelerate timelines and meet these ing projects, companies must also adopt companies, which did not exist before. targets are in strong demand. Therefore, more innovative processes in order to be However, while globalization and lower- whilst many players in the industry are competitive globally and win new con- cost offshore rates are in demand, the com- experiencing slower demand due to fewer tracts. Small companies offering special- plexity and cost of running OEMs are quite new aircraft sales, the engineering services ized solutions are in high demand, sought high. We are trying to take advantage of segment has seen a great deal of growth. out due to proof of fast and tangible results. this and offer our expertise in combination “OEMs need to increase their speed of “There are now more service providers with the advantages of higher efficiency 74 production as the book of orders keeps and competitors as it is easier for startups and leaner services offered by an SME to growing,” commented Fernando Ledesma, and overseas companies to penetrate the win bigger contracts.” Mannarino aims to offer complete turn-key packages, developing complete embedded software packages including certification. The company is the only service-based or- ganization in Canada that is authorized as a Design Approval Organization (DAO) for airborne software and airborne electronic hardware. In recognition of the SME’s promise, Lockheed Martin recently invest- ed in Mannarino to facilitate the develop- ment of its own proprietary airborne soft- ware products. The investment also marks the largest ever made by Lockheed Martin into a Canadian SME. Whilst many companies want to increase efficiency, implementation of the relevant technologies can sometimes be a chal- lenge. “Advanced manufacturing tech- niques are gaining ground in the aerospace industry to help meet this challenge,” continued Ledesma. “AKKA is working with some aerospace companies to bring the lean manufacturing techniques and the automated processes of the automotive in- dustry into the building of planes.” Echoing the need to address implementa- tion challenges, John Nassr, president at ICAM Technologies noted: “The number one challenge companies have in manufac-
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports EDITORIAL
turing is finding affordable engineers with programming skills. Our service targets this need and helps companies cut down on “ programming and machining time, so that OEMs have spent heavily on developing their current programs and there they get parts cheaper, better and faster. are few in development, so they have reached a period of the business cycle There are not many companies like ICAM where they are not selling many new planes. For this reason, they are focusing that are able to bridge the gap between the world of automation, aerospace program- on productivity, which translates to cost reductions. Safran Engineering ming and CNC machines. Our employees Services has therefore received a lot of demand for assistance with improving have a high level of knowledge of CNC profitability through weight reduction and identifying other cost saving programming, CATIA and SIEMENS sys- measures. tems, CNC machine milling and software. We also provide consultations at custom- ers' facilities and offer them solutions - Sylvain Boisvert, based on the technology available. Cus- General Manager, tomized solutions are the key to offering Safran Engineering Services automation to aerospace.” Alongside customization, scalability is also a key consideration as smaller compa- nies are often unable to make the necessary investments to overhaul their processes. ICAM is now expanding internationally quire complex tooling solutions involving improve the durability of tools,” added” through an established network of resell- robots or other forms of automation. Be- Aguilar. “Responding to these changing ers. cause tooling equipment is a non-recurring needs, Avitec leverages its decades of ex- Equally, companies look to equipment cost, price pressures are not as pronounced perience to work on designing new tools that offers a quick return on investment as for production parts for example, where using PCD’s. One of our main areas of through increased efficiency and reduction cost reduction initiatives must be incorpo- R&D focus at present is on new technolo- of costs. As equipment generally repre- rated into any program, although there is gies for supporting PCDs.” 75 sents a non-recurring cost, companies are always competition.” Avitec is now focused on developing new keen to invest in machinery with a quick Avitec’s main business consists of special markets and expanding its base into the rest return on investment (ROI). “With regard cutting tools and ground support equipment of Canada, the United States and Mexico. to our tooling services, we see a strong services as well as high-precision, tight- With high proficiency in innovative tech- demand for high-precision, tight-tolerance tolerance, machined parts and components. nologies and processes, Québec’s service parts and components,” noted Luis M. “With regard to special cutting tools, the companies and equipment providers are Aguilar, business development manager most significant changes in demand have well-placed to deliver cost-effective solu- at Avitec Tools Inc. “There is also a big been for high quality carbide and Poly- tions to drive the aerospace sector’s com- push for more automation projects that re- Crystalline Diamond (PCD) tools, which petitiveness. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations INTERVIEW Global Business Reports
Marc Eliayan
CEO GROUPE ADF (LATECOERE SERVICES)
LATECOERE Services Canada, the Ca- Who are you typical clients in the aero- Could you provide more detail on your nadian subsidiary of French group LATE- space sector? services to the space industry? COERE Services, offers structural and Generally, we work with OEMs such as LATECOERE Services has a long history electrical design engineering services. Safran, General Electric and Airbus. In of assisting in the development of satel- Groupe ADF acquired LATECOERE Ser- Québec specifically, we work with- Bom lites. We have a white room in which we vices in December 2016. bardier, CAE, STELIA Aerospace and can assemble satellites and we have been Arconic. We are looking to establish a very involved over the years with com- Groupe ADF recently purchased LATE- subsidiary in the United States by the end panies like Thales, CNES and Airbus COERE Services. What services will the of 2017 to increase our presence there. We in developing the pilots in new series of newly-formed company provide to aero- have begun providing total cost of owner- satellites. These projects involved a lot of space clients? ship solutions to our European clients and manpower and little automation. However, Groupe ADF wants to offer its clients a we now want to extend this offering to our we are now a partner on the OneWeb sat- 76 total cost of ownership solution, meaning clients in Québec. ellite constellation where for the first time partnering with aircraft manufacturers on we are building satellites in an automated projects from design to ramp-up, includ- Aircraft manufacturers are currently assembly line that will produce one satel- ing maintenance activities and transferring focusing on improving productivity and lite every day. The project will ultimately more risk from them to our company. For reducing costs as new orders for aircraft consist of 900 satellites, with 600 in the example, this would involve us partnering have slowed. How does Groupe ADF air and 300 substitutes. On the Ariane 6 with them on the design, materials man- help them reach these goals? European Program, LATECOERE Ser- agement and providing engineering ser- Groupe ADF works across many different vices is widely involved in the assembly vices so that they achieve the best quality industries so we can see what has worked lines in France, Germany, French Guyana and on-time-delivery (OTD). In today’s well in one industry and apply it to another (Kourou) and on the cryogenic umbilical market, there is a tendency for aircraft one, such as aerospace. For example, we arms on the launch infrastructure zone. manufacturers to outsource many aspects leverage our experience in helping im- of development and manufacturing and prove OTD and time-to-market in the oil How do you expect the space industry to to purchase engineering services during and gas, automotive and micro-electronics evolve going forward? ramp-up periods. However, this is some- sectors to inform the services we provide The space industry is fundamentally times not the most effective solution and, to aircraft manufacturers during ramp-up changing as there are many more private with the advent of companies like SpaceX, periods where OTD is crucial. Alongside programs, whereas before public programs new modes of production are taking shape. this, we have employed a successful lean dominated the industry. Therefore, we want to position ourselves manufacturing policy for the last 12 years. as a total solution partner to the more es- Groupe ADF also has a strong innova- What are your key goals for Québec in tablished players in the market that can en- tion policy. For example, we have several the next three to five years? sure they remain competitive through the partnerships with robotics companies to We want to triple the size of our company introduction of new ideas. Groupe ADF develop robot end effectors that can carry in Canada and diversify our service offer- has particular strengths in ground system out welding, splitting and other func- ing beyond engineering services. This will equipment used to carry out testing of tions, helping companies to improve their include the development of work packages aircraft and engineering services focused productivity. G2Metric, a subsidiary of to install assembly lines, special equip- on increasing productivity. LATECOERE Groupe ADF, is developing automatic vi- ment to support the production of testing Services was acquired to broaden the sion technology which will replace manual in the space and aeronautics sectors, as company’s service offering, especially its quality inspection. well as all of the further services Groupe Engineering and Expertise services, and ADF provides in other locations. ▬ thereby offer a more total solution.
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports INTERVIEW
Jean-François Hamel
President PCM INNOVATION GROUP
PCM INNOVATION. (PCM) is a specialist and leader in engineering How has demand shifted since 2015 and how has PCM responded and tooling for the aerospace industry. PCM INNOVATON acquired to increasing cost pressure? TechFab in April 2016. Cost pressures are somewhat different in tooling, which represents a non-recurring cost. The market is driven more by knowledge and the What were the motivations for PCM INNOVATION’s acquisi- ability to deliver. We are therefore focused on ensuring we excel in tion of TechFab? these areas. This includes having the ability to manufacture tooling The acquisition allowed the company to obtain new technology for ourselves, whilst sub-contracting some products in lower-cost coun- aeroengines, such as turning technology and gun drilling. It also in- tries. There is a very strong trend towards larger packages of tool- creased PCM’s capacity to handle large assembly lines and brought ing, total risk transfer to the supplier and full integration. As a result, the company geographically closer to its customers. We have done companies like PCM are providing less individual tools and more 77 this by focusing TECHFAB’s facility on tooling for aeroengines and total solutions for entire assembly lines, including design services. large assembly tooling for aerostructure manufacturers and OEMs. Is PCM using any new processes to improve efficiency? What other major developments have occurred since 2015? PCM has strengthened its capabilities in laser technology, 5-axis ma- In September 2015, PCM became the owner of Halberg USA, spe- chining of tooling and composite tooling. This has allowed the com- cialized in aeroengine tooling. This gave PCM its first footprint in pany to provide solutions for satellites and aeroengine composites. the United States and increased its engineering workforce to 55 em- We would also like to offer Industry 4.0 solutions to our customers, ployees that are mainly dedicated to our core business in tooling, such as automation and intelligent manufacturing and are strengthen- tooling design and fabrication for aerospace. In November 2015, ing our services in these areas. PCM also began managing tooling operations for Bombardier in Querétaro, Mexico, as part of a long term contract. Last month, we What does consolidation in the supply chain mean for PCM’s opened our own facility in Querétaro to provide services to more business? customers. In terms of our customers, it will be positive for us because it will Demand for tooling in Mexico is advancing as the autonomy of the mean they are bigger and stronger and will demand more sophisti- OEMs’ divisions there is becoming greater. However, most tooling cated tooling solutions. Consolidation among tooling and engineer- purchases are still made in developed markets, so the market in Qué- ing companies is also a good thing because we are prepared and are bec is still robust. PCM therefore plans to use its Mexico operations therefore well positioned to take advantage of the trend. In line with both to target the Mexican aerospace market and to leverage the cost this, PCM decided a few years ago to acquire other companies and advantage to supply the North American market. position itself as a small international integrator. Our business plan will put us in a position to compete with the bigger tooling companies OEMs are demanding more integrated services. How important in the United States in the next few years. a factor was this in the acquisition of TechFab? The acquisition of TechFab is indeed an example of integration, as What will be the main areas of focus in R&D for PCM going it added supplementary manufacturing of tooling to our portfolio, forward? whereas we had previously relied on the supply chain. Integration Aside from automation and intelligent manufacturing, PCM is in- was also the precise reason behind the acquisition of Halberg De- vesting in composite capabilities as the composite content of aircraft sign, reflecting our strategic goal of positioning the company as a is still growing both in terms of complexity and quantity. PCM also tooling integrator. There is no other tooling integrator in Canada be- invests to stay ahead of advancements in machining technologies and sides PCM that holds engineering and fabrication capacity for many is monitoring additive manufacturing techniques, although the busi- different types of tooling. ness case is not strong enough to invest in this yet. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations INTERVIEW Global Business Reports
(DOA) status meaning we can make modi- to showcase their ideas. Traditionally, we fications and approvals of aircraft on their hire many of our employees directly from behalf. universities to engage students at an early point in their careers, get the best talent As airlines increasingly focus on the and immerse them in our culture, of which customer experience, what trends have innovation is a key part. In the US market, become apparent in cabin engineering? P3 opened an innovation center in Port- We envision a world in the near future land, United States, in March 2017, which where airplanes are a platform on which features a help center for startups to ex- different applications and experiences change ideas and launch their products. P3 can be accessed onboard. This is becom- places a lot of importance in being at the ing increasingly important for passengers forefront of developments and maintaining and will completely revolutionize the way its open-mindedness. we travel. The increased use of cell phone applications for completing daily tasks How do you expect Industry 4.0 to will naturally translate into aircraft. In the transform the aerospace supply chain? future, passengers will simply ‘google’ Automation is completely changing the in- Mark their destination then customize their trip dustry. We are investing further into these according to their unique entertainment, technologies, which continue to shape the Makoukji dietary and seat pitch preferences. It will way we work in the manufacturing and en- no longer matter what airline seat one gineering sides of our business. We help chooses, rather what one can do with the support companies by developing aug- seat. Different seating configurations are mented reality applications to help train also being discussed by airlines, includ- their teams, and we’re helping to improve ing benches and standing room to fit more manufacturing processes by automating Managing Partner people per flight. As companies start- de work orders, and other innovative solu- P3 GROUP signing open-platform aircraft where cus- tions. P3 Digital Systems, a Romanian 78 tomizations can be made easily and afford- company recently acquired by P3, pro- ably, innovation will continue to snowball. duces many of these applications for our P3 is actively investing into the cabin customers, including the augmented real- space. Through our new subsidiary, P3 ity aspects. P3 Group (P3) is a service and consult- aero systems GmbH, we are at the fore- ing company that specializes in engineer- front of providing consulting and engi- What are the key objectives going for- ing and project management for the aero- neering support for companies that want to ward? space, automotive, telecommunication and move towards greater customization. We Our customers have asked us to focus on energy industries. are also working on developing airport ap- the cabin space and are accordingly in- plications and benchmarking them accord- vesting in the development of new prod- Could you outline the importance of ing to their improvement of the customer ucts in this area. We are in the process aerospace to P3's business and your experience prior to boarding. This will be of acquiring a business in Switzerland to main activities in the sector? the differentiating factor for airport service strengthen our commercial and VIP cabin Aerospace accounts for nearly half of our providers in the future and those ahead of design capabilities. This will complement global revenues across the 14 countries in the curve will have a lot more success than our aero systems division which is focused which we are located. We work with the those that adhere to the traditional ap- on connectivity and mobility. Addition- Big Four commercial aircraft manufac- proach. ally, although we are a service company, turers–Airbus, Boeing, Bombardier and we keep an open mind regarding the de- Embraer–as well as with Tier 1 and Tier To what extent does P3 take on a collab- velopment of new products, especially for 2 companies and occasionally with other orative approach to innovation? under-served niches. levels on behalf of the OEMs. P3 is a spin-off from the Fraunhofer In- Our next big focus is the implementation Traditionally, P3 has been a consulting stitute for Production Technology (IPT), of Industry 4.0 into the engineering world, company. Our experience managing Air- so our roots stretch back to academic helping our customers understand what bus' supply chain gave birth to our en- research. We collaborate with many Eu- that means to their product lifecycle and gineering business, which has grown to ropean universities and provide annual making sure they plan accordingly. Aero- represent half of our headcount. We work innovation scholarships. Annually, P3 space plays a big part in our growth plan a lot on cabin engineering, electrical wir- and the German government jointly spon- and our two biggest growth markets are ing, structural design, stress analysis and sor an innovation challenge, whereby the North America and India. We are focus- advanced aerodynamics. The European country’s best and brightest minds are of- ing a lot of energy on our North American Aviation Space Agency (EASA) has also fered the chance to change the way we fly, customers, particularly Bombardier and granted us Design Organization Approval and are given a national stage on which Boeing. ▬
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports INTERVIEW
Phil Cole & John Maris
PC: President JM: VP Business Development MARINVENT AND PC JM CERT CENTER CANADA
Marinvent provides consulting, services, IP we licensed to Jeppesen. Our exclusiv- Marinvent is a strong proponent of govern- training, tools and IP to reduce customers’ ity agreement has recently expired, present- ment-supported consortiums in the aero- program/product risk, cost and schedule and ing a big opportunity in this area. Secondly, space industry. Could you explain your to help them innovate quickly. we have developed a set of software tools stance? called Synthesis®. This product was initially JM: Much of my work as Chair of AIAC last Could you provide a summary of Marin- intended to support clients in the planning, op- year and as chair of the small business work- vent’s history and main activities? timization and management of flight test cer- ing group involves promoting the consortium PC: Marinvent was borne out of an idea to im- tification programs. Since its launch, we have model in Canada’s aerospace supply chain. As prove the efficiency of flying, stemming from broadened the product’s offering to include part of this, AIAC has produced a best practice John Maris’ previous experience as Program all aspects of certification in both commercial guide for SMEs based on international case Manager for the Canadarm 2 work station, a and defense applications for aerospace and are studies. Whilst government support of the Big test pilot and Commander of search and res- broadening it further for shipping, automo- Four OEMs is essential as they are too big to 79 cue aircraft. In essence, our work comprises tive, rail, medical and other sectors. Synthesis fail, the focus needs to extend to the SMEs to the creation of IP that addresses industry chal- removes the reoccurrence of testing that cur- a greater extent to maintain Canada’s competi- lenges. The primary goal of the company has rently occurs at every single step in the supply tiveness. The Big Four OEMs are public com- always been to assist the development of the chain by storing information on any previous panies whose focus must be on reducing cost aerospace industry rather than to be purely testing completed on a product. As well as in- and time to market as a priority. Government commercial. 30% of our activities are volun- creasing efficiency of testing in complex sup- funding, an integral component of a thriving teer work and we invest 80% of our revenue ply chains, Synthesis is also perfect for bring- industry, can therefore end up being rationally into R&D, driving our creativity and innova- ing together players in different locations, as invested in lower-cost jurisdictions to create tion. may be the case when companies collaborate the best return on investment for shareholders. JM: We are an extremely international compa- or form consortiums. Ironically as a result, government investment ny and very agile. The bedrock of our business JM: Another product in our portfolio, an ex- in OEMs often does not lead to investment in is the talent and breadth of experience of our tension of my Master’s thesis, is APM, an Canada’s SMEs but rather to increased offshor- 12 employees; one of our employees wrote electronic alternative to the wind tuft that ana- ing for the industry as a whole. The solution is the telemetry system for the Mir space station, lyzes the air flow around an aircraft’s air foil. for the government to break the loop by cre- for example, and another certified the most APM calculates the needed thrust and angle of ating an aerospace policy that encourages a complex ever cross-platform system for elec- attack to maintain an aircraft’s lift under dif- more strategic investment distribution across tronic charting which has become the world ferent weather conditions in order to prevent the whole sector to encourage SMEs to grow standard. We sold the license to this standard stalling. APM is hugely beneficial to the safety and prosper. to Jeppesen, leading to its acquisition by Boe- of air travel; presently, pilots have no accurate ing for C$1.5 billion. Although we are a small tools to measure air around an air foil–a prob- What are the key objectives for Marinvent company, we work with some of the world’s lem recognized as a top-five safety risk by the and Cert Center Canada going forward? largest contractors. Thanks to our Transport U.S. National Transportation Safety Board. It JM: Marinvent’s objective is to grow through Canada Design Approval Organization (DAO) is particularly advantageous in icy conditions investment, as well as provide services for 3C. accreditation, we are also able to audit and where ice can disrupt airflow on the air foil. With regard to 3C, the foundations are in place, certify their products. APM is also being deployed in UAVs and will and it now needs to be supported by outside soon be implemented on wind farms. Unfor- players to become a national resource. As we What are a few of Marinvent’s flagship tunately, uptake among aircraft manufacturers are a small company, we cannot afford all of the products and notable projects? has been slow thus far due to the sensitivities early set-up costs of the Center on our own to PC: We have developed IP that is two to three involved in acknowledging the shortcomings ensure it grows, making support from the gov- generations more advanced than the original of current technology. ernment and potentially the OEMs essential. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations EDITORIAL Global Business Reports
Safety first: Optimizing inspection, testing and maintenance measures
An integral step for any aircraft prior to also improves their own client communica- Optimizing in-service support entering service is the evaluation of its tion through the data collected by our tools performance and safety. Whilst companies and shared with other systems. Whilst we The uptake in health-monitoring technolo- may pursue cost reduction, quality and develop our software to address as many gies has been particularly impactful on in- safety are aspects that will never be com- challenges as possible, we also partner with creasing efficiency and reducing support promised. Companies operating in the test- our clients to provide custom solutions.” costs by decreasing aircraft downtime and 80 ing and maintenance and repair overhaul Radix is starting to utilize artificial intel- (MRO) spaces or offering technologies to ligence (AI) and augmented reality tech- enhance inspection and testing processes nologies in its solutions and aims to grow will therefore continue to be integral to air- its aerospace division from 10% to 25% of craft manufacture and operation. the company’s business. “ Inspections, testing and maintenance are Meanwhile, simulated environments are at becoming ever more sophisticated, particu- the fore of non-destructive testing (NDT). larly thanks to developments in simulation “Independent research shows that using an and predictive maintenance. Accuracy of integrated simulation platform results in a Industry 4.0 can make the biggest inspections is now being increased through faster development time (nine times faster) impact on MRO turnaround by the introduction of robotics to reduce hu- and reduced overall product costs (four streamlining and automating man error, whilst also increasing efficiency times less expensive),” highlighted Paolo communication between OEMs and of the task at hand. Radix Inc., headquar- Colombo, global aerospace & defense in- Tier 1s and the rest of the supply tered in Ontario and part of the Active In- dustry director at ANSYS NTI, the global chain. dustrial Solutions (AIS) group, provides leader in engineering simulation software. customized software which enables com- “Overall, companies using an integrated panies to visualize and collect data and simulation platform are 26% more likely - Lorenzo Marandola, provide traceability on employees’ work to meet product cost targets. 20 years ago, activities to improve their task efficiency. simulation was only utilized by experts, Manager, “Radix’s tools save clients time and im- but an increase in automation and a reduc- Business & Technology Development, prove process efficiency,” highlighted tion in required training have made it more M1 Composites Technology Inc. Michael Muldoon, Director of Aerospace accessible.” Operations. Canada is home to ANSYS’ development Two of Radix’s main products are Tool offices and center of expertise for aerody- Tracker and Inspect Tracker; the latter is an namics, including de-icing and icing pre- integrated, vision-based system for manual vention simulation. Tools such as ANSYS inspections. “For example, Inspect Tracker Integrated Multiphysics (AIM) aim to em- can reduce inspection time by 50% and re- power companies to deploy simulation at sults in more accurate data and ultimately the pre-design phase, which would lead improves the quality of the products our to a significant decrease in development clients produce,” commented Muldoon. “It costs.
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports” Global Business Reports EDITORIAL
benches, has introduced new-generation component stands for fuel control units “ and other engine accessories with a fully integrated Data Acquisition and Control Countries such as China, Russia, India System. “Now in service at P&W Poland and Japan are hot on the heels of and P&W Aeropower in West Palm Beach, Canada in terms of aerospace. Since our fuel control stands offer a testing en- only certifying bodies in Canada, vironment with a higher level of accuracy and test parameter stability for a single shot Europe, the United States and Brazil data capture, so the quality of data is much are currently recognized worldwide, higher and is well documented,” explained Canada has an advantage of a few Claude Lauzon, corporate vice president at years. However, since this barrier CEL Aerospace. “The system converges to will only last so long, there is little the DAS' data point and we can also offer stopping emerging countries reaching an automated test routine from beginning Canada’s level of expertise. to end. Again, it is all about our customer effectiveness and efficiency. This is being introduced in fuel nozzle test stands too.” - John Maris, In response to China’s emergence as a force President, in engine R&D and maintenance, CEL is Marinvent and Cert Center Canada pushing its growth into the Asian market, starting with a Service and support offering out of Singapore in late 2017.
Safety, certified
Attaining the required certification cre- 81 dentials can be extremely challenging and cost-heavy, particularly for SMEs. Further- more, certifiers themselves are difficult to ” retain due to the cyclical nature of aircraft part replacement through an understanding development. “Certification accounts for of a part’s defects and resulting lifetime. approximately 80% of the development “We will be able to follow the complete costs of an aircraft and so represents the life of a part–we digitalize the surface of biggest risk to OEMs’ bottom line,” as- the part so we know exactly where the po- serted Phil Cole, vice president, business tential defects are,” outlined Jean-François development at Marinvent and Cert Center Dupont, CEO at AV&R, a firm specializing Canada. “A major challenge is that OEMs’ in automation, vision and robotics. “Fol- delegates are only licensed by Transport lowing a cycle, we will re-inspect the parts Canada for their own OEM’s products and during the maintenance overhaul and com- are therefore unable to speedily transfer to pare the surfaces with the originals. This another company.” will allow us to monitor any deterioration The recently-established Cert Center Can- and predict defects over the life of a part. ada (3C) seeks to reduce the loss of knowl- In our extensive database, we will then be edge by registering and housing certifica- able to find where all these parts -are in tion staff under its own name. volved and will be able to ground only the Whilst a great deal of R&D expenditure one plane with a potential defect. Normal- is funneled into innovation on aircraft ly, an engine is verified with all tests done themselves, OEMs and aircraft operators on a computer with parts modelled after rely heavily on the services of supporting their initial design. All simulation parts are industry segments to ensure optimal per- perfect. We will be able to simulate the real formance and maintenance in the longer- engine, recreating its real performance.” term. Technology developments leading to Greater utilization of Big Data will also health monitoring and predictive mainte- drive more effective fleet management. For nance will also secure cost savings further example, CEL Aerospace, a leader in avia- down the line through a reduction of un- tion engine test cells and accessories test necessary maintenance work. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations EDITORIAL Global Business Reports
ANSYS produces engineering solution cording to DO-178 standard (up to level A) software. and test it into our simulation platform. This process reduces the cost and time for embed- Could you briefly introduce ANSYS and its ded software certification by as much as 50% global operations? compared with more manual methods, saving ANSYS is the global leader in engineering months or even years of work. ANSYS looks simulation software. Established 47 years ago forward to sharing more news when we an- in Pittsburgh, ANSYS is now present in more nounce ANSYS 19. than 80 countries worldwide through direct offices and technology partners. Canada is What other advantages can the software home to ANSYS’ development offices and offer? center of expertise for aerospace aerodynam- Increasing product complexity is a top chal- ics, including de-icing and icing prevention lenge for most aerospace companies that are simulation. Our speed, accuracy and the ease looking for competitive differentiation with of use of our software improve engineering limited resources. The three most important productivity while lowering the cost and risk advantages include a reduction in overall of innovation. Our platform is constantly cost, a reduction in development time and de- Paolo updated. Of approximately 3,000 employees creased risk of innovation. globally, one third work in research and de- Independent research shows that using an Colombo velopment, where we invest around 18% of integrated simulation platform results in a our annual turnover. faster development time (nine times faster) Along with automotive, energy, high-tech and reduced overall product costs (four times and healthcare, aerospace and defense is a less expensive). Overall, companies using an key industry for ANSYS. We address many integrated simulation platform are 26% more engineering aspects of aircraft design us- likely to meet product cost targets. Twenty Global Aerospace & ing a single, open and seamless simulation years ago, simulation was only utilized by Defense Industry Director platform. Not only do we perform coupled experts, but an increase in automation and a 82 ANSYS NTI physics-based simulations such as structural, reduction in required training have made it aerodynamic, thermal and electromagnetic more accessible. With AIM, which is fully analysis, but we also simulate aircraft con- automated and workflow-based, we hope en- trol and display software and automatically gineers will use simulation at the beginning generate it to FAA standards, thus checking of the design process, leading to a major de- the entire system performance of the aircraft crease in development costs. through a digital prototype. What are the next stages of development What is new in ANSYS 18? and key objectives for ANSYS? The pace of innovation in the engineering ANSYS vision and strategy has remained software space is extremely rapid. Every year constant for over a decade. We enable our we deliver a major software release, with customers to create a complete virtual proto- step changes in new capabilities and work- type of their product in its operating environ- flows. Within every new release, we integrate ment that uses an integrated simulation plat- newly acquired codes so customers can test a form based on the best solvers on the market complete digital prototype and save time and and is extensively supported by experienced money. The integrated workflow results in a people. As part of this strategy, we constantly much lower total cost of ownership of cus- engage our customers, industry consortia tomers’ overall simulation environment. and leading universities to work on what is Some of the key ANSYS 18 developments next, like digital twins, autonomous systems, for aerospace companies include a better so- electrification and artificial intelligence. This lution for automatic topology optimization ensures that we meet the needs of the indus- that supports additive manufacturing, im- try—not just today, but for the future. Beyond proved Reduced Order Models and technol- the additional capabilities, we continuously ogy that supports customers in their journey improve our entire platform adding speed, re- to the digital twin. We have improved tools liability and ease of use to all our tools. The like ANSYS Integrated Multiphysics (AIM) connections between the software disciplines to empower companies to deploy simulation are also very important: we need to simulate at the pre-design phase, and we now auto- even more complex systems and make it even matically create embedded control software easier to retain, manage and reuse the knowl- for critical applications already certified -ac edge from all this simulation effort. ▬
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports EDITORIAL
Claude Lauzon
Corporate VP CEL AEROSPACE
CEL is a leader in design, build and deliver turnkey, OEM compliant, and Control System and some of its ad-vantages? aviation engine test cells and accessories test benches for turbopro- Customers value the engine OEM compliance, on top of quality of peller, turboshaft, small & medium turbofan and APU appli-cations. data and reliability of the system, and this is what we have historical- ly delivered in both software and instrumentation with CELDAS™. CEL is coming up to its 30th anniversary next year. Could you With OEMs in the R&D environment, and some other applications, briefly introduce the company and how it has developed? more flexibility in required; in response, we are adding an increasing CEL was founded by Charles Emile Lussier, an ex-director for Pratt amount of COTS building blocks, and a toolkit that allows real time & Whitney Canada (P&WC) with expertise in design, development, reconfiguration of the displays, algorithms and plotting routines. We build, project management and installation of test cells. Our gene-sis also provide Internet-based communications, meaning that any test was with P&WC; we built test cells and rigs directly for R&D, en- or performance engineer can look at the data in real-time remotely, 83 gine production and post-maintenance testing. For some time, 75% with the same flexibility. Being able to change the parameters in real- of our business was in P&WC’s ecosystem, and 80% of the time we time improves the efficiency and effectiveness of the testing. were adding new engines. More recently, for sustainability, we en- tered into other OEM eco-systems, with an intent to add one OEM What new technologies are coming into play? per year to our portfolio. Today, our business is diversified between We introduced new generation component stands for fuel control General Electric, Honeywell and P&WC/P&W Aeropower, on top of units and other engine accessories with a fully integrated Data Ac- having designed and delivered Test Cells for RR, Safran and LHTEC quisition and Control System. Now in service at P&W Poland and engines. P&W Aeropower in West Palm Beach, our fuel control stands offer a testing environment with a higher level of accuracy and test param- Has the competitive landscape developed much in recent years? eter stability for a single shot data capture, so the quality of data is On small engines, there are a few companies working in niche seg- much higher and is well documented. ments but, in terms of integrated solution providers with mechanical, instrumentation and software capabilities across small engine types, Where would you like to see the company in a few years? there is a handful of players including ourselves. There have been, CEL is an unsung hero in its own technology niche, with over 80 however, changes in the market share and we are now number one employees currently, and we are globalizing. After CEL Aero USA in APU and one or two in every other market segment that we serve. (2015) and CEL Poland (2011), CEL’s growth in Asia is now a key focus. We have several active test cells to support, maintain and up- What are some of the different considerations between different grade in Singapore, China and Indonesia with more coming in the engine types? near future. China is an emerging force in engine R&D and Mainte- A helicopter engine testbed requires a high-technology solution due nance; to that effect, CEL Asia is in the startup phase, and will ini- to its high output speed, power range, engine control and data ac- tially be offering Service and Support in the region, out of Singapore, quisition. Our ability to make an advanced test cell for helicopter later in 2017. engines is clearly demonstrated our third T700 helicopter engine Longer term, we are still in a position to grow organically, doing test cell, recently awarded by TAI in Turkey, on top of our P&WC/ more of what we do and doing it better for more OEMs, MROs and RR/Safran Engine applications. All engine OEMs are significantly fleet operators across Civil and Military markets. Beyond this, we devel-oping their existing engines or launching new ones every year. are exploring adjacent markets and assessing organic Vs non-organic Therefore, in order to be able to serve in the R&D segment, we need growth. Operationally, to con-tinue to evolve our own product offer- increasing capabilities with the latest R&D measurement techniques. ing we have an initiative to standardize our products with re-peat- sales potential to reduce non-recurring cost and acquisition costs for Could you elaborate on the CEL CELDAS™ Data Acquisition our customers. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations Image courtesy of MDA GBR • Industry Explorations • QUÉBEC AEROSPACE 2017 SPACE
“Over the years, Canada has developed a very positive reputation due to its delivery on missions at a much higher quality than required and within the timeframe subscribed, making it highly competitive. Canada is a strong partner in international space programs and its international reputation for space development opens a lot of doors for our industry to participate on international missions and to export their goods to international markets.ˮ
- Sylvain Laporte, Chief Executive Officer, Canadian Space Agency EDITORIAL Global Business Reports
Punching above its weight: Québec’s space industry
Canada has an impressive track record its size. Overall, the province represents in space, entering into the Space Race in around a third of Canada’s space industry, 1962 with the launch of the Alouette-1 sci- accounting for C$1.67 billion of a total of “ entific satellite, becoming the first- coun C$5.3 billion in revenues in 2015. “Over try after the Soviet Union and the United the years, Canada has developed a very States to construct a satellite. With a par- positive reputation due to its delivery on The CSA, provincial and federal ticularly strong legacy in space robotics missions at a much higher quality than governments are generally supportive. 86 and satellite communications, the country required and within the timeframe sub- The challenge for us in Canada is that is perhaps best known for spearheading the scribed, making it highly competitive,” our country has relatively modest Canadarm project. Canadarm 1 was used stated Sylvain Laporte, the CSA’s presi- means when compared with the in NASA’s Space Shuttle program in the dent. countries where our main competition 1960s to deploy, maneuver and capture In addition, Québec’s space ecosystem comes from–the United States and payloads. Canadarm 2, launched in 2001 spends C$77 million each year on research Europe–largely because Canada does and still active, was used to assemble the and development. not have a large domestic commercial International Space Station (ISS) while in or military market. We therefore need space and is now used to move supplies to develop robust export markets. and equipment. CSA and MDA: With Canada having been an early To this day, Canadian technology is stalwarts of Canada’s space industry pioneer in satellite communications, used in 80% of all commercial satellites launched internationally. RADARSAT-1, With its headquarters in Saint-Hubert, the sector has not recently been a launched in 1995 and led by the Canadian Québec, the CSA is a symbol of the prov- priority for the Canadian government. government, provided the world with large ince’s capabilities in space. From here, As a result, we are at a disadvantage amounts of earth observation data. RA- the CSA’s flight controllers operate the compared to our competitors in terms DARSAT-2, still active, built on its pre- majority of Canadarm2’s maneuvers and of industrial returns to Canadian decessor’s success with enhanced marine crew members of the International Space industry for its government spending. surveillance, ice monitoring, disaster man- Station (ISS) train how to operate the MSS This seems to be changing, but we agement, environmental monitoring, re- once in space. L-3 MAPPS, a Montréal have lost precious time. source management and mapping in Cana- based company and a supplier of control da and around the world. The project took and simulation solutions for space, built place as a unique collaboration between the simulator the CSA uses to carry out - Joanna Boshouwers, the Canadian Space Agency (CSA) and this training. Vice President and Canadian industry. MacDonald, Dettwiler Drawing on an annual budget of C$360 and Associates Ltd. (MDA) owns and op- million provided by the federal govern- General Manager, erates the satellite and ground segment, ment, the CSA has had three main man- MDA whilst the CSA contributed to the funding dates since its founding: promoting the of the construction and launch. peaceful use and development of space Québec makes an outsized contribution activity; advancing the knowledge of to Canada’s space industry relative to space through science; and ensuring space 86▶ Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports” Global Business Reports FACTSHEET
Revenues in Québec C$1.67B in 2015
(almost on third of Canada’s total) As of 2015, total revenues for the space Revenues in Quebec (2014-2015) industry in Canada were about decreased by C$5.3 billion 7% or C$130M
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Exports increased by The Canadian space workforce totaled 11% over the last five years, 9,927 from space-related full-time equivalents (FTEs) in 2015
C$202M Québec represented in 2010 to C$225M 33% in 2015 (3,298 FTEs)
There are about The 163 organizations spent 163 organizations C$256 million that deal with space in Canada on R&D in 2015, 41 C$77 milion of which are based in Québec from Québec’s players
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations EDITORIAL Global Business Reports
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◀ 84 science and technology brings social and MDA has a history in space stretching bec’s success. The company employs over economic benefits to Canadians. Its role in back 50 years with involvement in more 800 highly-skilled employees in Montréal the space industry has changed over time than 200 space programs. These include and has a 365,000 square foot facility with as the space sector has matured. About 10 many of the world’s premieres in satel- state-of-the-art integration, assembly and years ago, for example, it stopped building lite services such as Anik A (first domestic test capabilities. Through its own invest- satellites, devolving this responsibility to communications), Anik C (first direct fore- ment and external investment of C$48 mil- the private sector. The CSA now focuses cast), MSat (first mobile communications), lion mostly in the form of loans from the more on providing R&D funding and and RADARSAT-1 (first commercial - ra Québec government, MDA is also devel- supporting numerous private companies dar). MDA also developed the Mobile Ser- oping the Satellite Center of Excellence. involved in producing payloads for satel- vicing System (MSS), the suite of robots This center will provide support to the lites. on the ISS that includes the Canadarm. next generation of technologies believed Headquartered on the other side of the MDA’s satellites subsystems business, by MDA to be essential in addressing the country in Richmond, British Columbia, based in Montréal, is a key driver of Qué- changing needs of the satellite communi-
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Québec also has strong expertise in the field of optics and photonics. Companies “ and organizations such as ABB, which fo- Canada and Québec have some of the cuses on optical-based analyzing and sens- ing instruments, and the National Optics most pre-eminent space companies Institute (INO), which specializes in optic in the world. MDA has carried out and photonic solutions for SMEs and large outstanding work and rightly has corporations, are some of the larger play- a strong international reputation. ers in this field. However, many SMEs also They, along with the CSA, drive the operate in this area, and the INO itself has industry and are supported by a strong spawned numerous start-ups. 89 network of SMES. We hope that there The international space industry is cur- will be a Canadian-led constellation rently undergoing a rapid evolution as project driven by these players. the size and development cost of satel- lites has decreased. “The development of constellations represents a paradigm shift - Jane Bachynski, in the building of satellites. Previously, President, organizations built one large satellite per mission but now they build hundreds and MPB Communications sometimes thousands of smaller satellites, which has fundamentally changed the dy- namics of satellite manufacturing,” com- mented Laporte. Influenced by this revolution, Québec’s space sector is undergoing a period of change. Total revenues in Quebec declined by 3% from 2010 to 2015 but exports in- ” creased by 11%, from C$202 million to cations sector. “This investment will also underpinned by a network of SMEs. Al- C$225 million, in the same period, paint- ensure that industry can develop a steady most one third of the 163 Canadian com- ing a mixed picture. Québec’s ecosystem stream of young Québec engineers able to panies dealing with space are located in has twice as many upstream companies– provide continuity to the workforce,” com- Québec and, of these, 95% are SMEs. companies devoted to sending objects into mented Joanna Boshouwers, MDA’s vice NGC Aerospace is a stellar example of an space–than downstream companies–com- president and general manager. SME making waves in the space industry. panies which use the research and technol- While the company has less than fifteen ogy from upstream activities for various employees, it has designed and deployed applications–but downstream activities Québec’s SMEs: artificial vision and Guidance, Navigation made up 87% of the sector’s revenues in an outsized contribution and Control (GNC) systems for satellites, 2015. This reflects the increasing commer- landers and rovers in numerous missions, cial applications of space data and tech- Although MDA and the CSA remain key most recently on the European Space nology, a shift which will shape Québec’s players, Québec’s success is increasingly Agency’s Sentinel 3A satellite. space industry for years to come. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations INTERVIEW Global Business Reports
Sylvain Laporte
Chief Executive Officer CANADIAN SPACE AGENCY
Established 1989, the Canadian Space How competitive is Canada’s space ellite communications companies to pursue Agency (CSA) is committed to leading industry in a global context and how R&D programs focused on the develop- the development and application of space strong is the ecosystem in Québec? ment of satellites. This strategy has had a knowledge for the benefit of Canadians and Over the years, Canada has developed a positive effect, apparent in the number of humanity. very positive reputation due to its deliv- successful Canadian satellite communica- ery on missions at a much higher qual- tions companies. Could you provide a brief introduction ity than required and within the timeframe to the CSA and how it interacts with subscribed, making it highly competitive. Could you provide an update on the RA- companies involved in Canada’s space Canada is a strong partner in international DARSAT earth observation mission? 90 industry? space programs and its international repu- Canada has always been the leader in this Although the CSA is relatively new by tation for space development opens a lot program, with RADARSAT 1 launched historical standards, Canada has been of doors for our industry to participate on in 1995, RADARSAT 2 still in operation, very active in space from the early 1950s international missions and to export their launched in 2007 and the planned launch onwards. Since its founding, the CSA has goods to international markets. of a constellation of three satellites in Sep- had three mandates: promoting the peace- Overall, Québec represents around a third tember 2018. This constellation will greatly ful use and development of space activity; of Canada’s space industry. As of 2015, improve the refresh rate of earth observa- advancing the knowledge of space through total revenues for the space industry in tions and enable us to perform three sepa- science; ensuring space science and tech- Canada were about C$5.3 billion, of which rate functions simultaneously, giving us nology brings social and economic benefits Québec constituted C$1.67 billion. In addi- much greater flexibility. Because of the to Canadians. We execute these mandates tion, there are about 163 organizations that radar technology, the satellite is just as suc- by concentrating our work in three main deal with space in Canada, 41 of which are cessful on cloudy days and at night as well areas: space exploration, utilization of sat- based in Québec. SMEs make up the major- as in the day and is therefore more effective ellites and building capacity. Space explo- ity of these organizations. In terms of em- than an optical satellite. The CSA is the de- ration includes our astronaut, planetary and ployment, there are around 10,000 direct livery and operations arm of RADARSAT. astronomy programs, ranging from human employees working in the space sector in space exploration to the placement of ro- Canada, of which roughly a third are em- What are the CSA’s key goals for the bots and sensors on other planets, paving ployed in Québec. next five years? the way for eventual human exploration. The CSA wants to ensure that space con- Canada has been part of the Mars Explo- How does the CSA support the develop- tinues to drive innovation and economic ration Rover (MER) mission for decades ment of commercial satellites? growth for the benefit of Canadians. We and also participates in key astronomical Canada has a long history of breaking will therefore leverage all of the new eco- programs for space observation. The uti- ground in commercial satellites. Previ- nomic and technological opportunities pre- lization of satellites refers to earth appli- ously, the government fulfilled the role of sented by the possibilities of cheaper, faster cations such as GPS, monitoring climate building satellites to demonstrate new tech- and more frequent space activity. We will change and weather forecasting. In terms nologies, but decided to take a step back ensure that the Canadian space sector is of building capacity, the CSA invests to about 10 to 15 years ago as the industry had connected with our international partners nurture knowledge and skills in space ac- matured to an extent where it was able to so that it remains at the forefront of inno- tivities and to attract the best researchers, perform this function by itself. Instead, the vation. Finally, we want to maintain the scientists and engineers to work in space CSA refocused its attention on providing skills capacity in terms of scientists and development. R&D support. We provide funding for sat- engineers to exploit these opportunities. ▬
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports INTERVIEW
idea of who would be buying its capacity government is investing C$45 million as a over that time, today demand profiles are royalty-based contingent venture loan for changing much faster. In order to adapt to a next-generation digital payload satel- this new business reality, MDA is investing lite system development and manufactur- in development of products that can help ing project, plus C$3 million in the form operators adapt their satellite service over of a non-refundable financial contribution its lifetime. which will be used to support the center. Historically, many communications satel- This investment will also ensure that indus- lites were placed into geosynchronous or- try can develop a steady stream of young bit; however, today we are continuing to Québec engineers able to provide continu- see the emergence of many constellation ity to the workforce. projects, which consist of large numbers of satellites launched into alternative medium What are some of the innovative areas in or low earth (MEO or LEO) orbits. Un- which MDA is currently working? like geosynchronous satellites that remain Following on from the need to develop in a fixed spot over the earth, these satel- products providing on-board flexibility to Joanna lites are moving with respect to the earth our customers, one of the key enablers is and require handoffs between satellites to increased use of digital technologies where Boshouwers cover any one spot on the ground. Due to analog prevailed in the past. A key driver the large quantities of satellites required for of MDA’s leadership in innovative constel- these constellations, the cost of each satel- lation satellite missions is smart design, lite becomes a major driver for the opera- which allows us to build a holistic view tor’s business case. In order to support an of a project through detailed evaluation of Vice President and General Manager operator’s ability to adapt to this new tech- customer requirements, current and new MDA nology environment, MDA is investing in manufacturing techniques, automation, development of processes and products smart batching, the use of up-screened 91 that can be less cost-intensive when or- commercial off-the-shelf (COTS) compo- dered in higher quantities. nents and streamlined test campaigns. We are always exploring new manufacturing Could you outline some of the programs techniques as a means of increasing effi- MDA is working on? ciency while reducing recurring costs. MDA is currently in the final stages of in- tegrating the three earth observation satel- Where do you see the most demand for lites for Canada’s RADARSAT Constella- MDA’s products? tion Mission. These three satellites will fly The greatest demand driver for MDA Mon- in formation to image the earth via a highly tréal’s satellite communications products complex radar antenna, providing images continues to be satellite sub-systems and of the earth day and night through any equipment. MDA is very well known for its weather conditions. We also have over 20 antennas and is strong in communications. projects ongoing for various communica- This is a very international market–MDA MDA is a satellite communications and in- tions satellites in LEO, MEO and geosta- sells to companies all over the world. formation company tionary (GEO) orbits. We are also working on Ku-Band communication subsystems What is MDA’s vision for the next three What key developments have there been for the International Space Station. Plus, to five years? at MDA since our interview in 2015? we recently were selected by the Canadian At a corporate level, MDA is actively pur- MDA has been very active in its two prin- Space Agency (CSA) to develop a concept suing growth in the U.S. government sec- cipal markets: communications and sur- for a radar instrument as a potential pay- tor as a mission-critical partner with an ex- veillance and intelligence. In the satellite load on a future Mars mission. panded portfolio of end-to-end solutions. communications market, which is the pri- We expect that this growth will benefit our mary focus of our Montréal business, flex- Could you elaborate on the key goals of Montréal division directly or indirectly. ibility is becoming increasingly important the Satellite Centre of Excellence? Here in Montréal, our vision is to be the as business requirements for satellite data The centre will provide support to the next best satellite equipment and subsystem are changing more rapidly and new com- generation of technologies that MDA must provider in the world. We have achieved munications applications are emerging. develop to address changing needs of the substantial growth in the last 10 years, and Where historically a satellite was designed satellite communications sector. Along intend to continue on this path going for- for a 15-year lifespan with a pretty good with MDA’s own investments, the Québec ward. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations EDITORIAL Global Business Reports
The Science of Light: Québec’s booming optics and photonics industry
In the Atacama Desert in Chile, four bright nications under companies such as Nortel, orange lasers are directed 90km into the now part of Cisco. “Since then, the prov- night sky, lighting up sodium in the atmo- ince has had strong optics components sup- “ sphere and helping scientists on the ground pliers such as CorActive and INO, which Laval University is a very important calibrate their telescopes and better observe in turn has led to a network of companies player as it generates a lot of highly the galaxy. This laser technology, deployed which produce reliable components such skilled manpower in optics and at European Southern Observatory's Very as ITF Technologies and MPBC,” com- photonics. Defense Research and Large Telescope in Chile was developed mented Jane Bachynski, president and CEO Development Canada (DRDC) has by Montréal-based MPB Communications at MPBC. an optronics center in the city which (MPBC). The company is a leading suppli- Increasingly, optics and photonics is used also generates many new ideas and er of high performance fiber laser and fiber for space instrumentation, planetary and technologies. Along with INO, these 92 amplifier subsystems to the space industry earth observation and space telecommuni- two organizations have been most and just one among many examples of the cations, but overall its use in space is rela- province’s prowess in optics and photonics. tively nascent. “The technology is very ma- active in building the optics and “Québec is very competitive in this area, ture in terms of its applications terrestrially photonics ecosystem in Québec City. with many companies working together in but space is the next frontier, with the adop- a closely knit network,” commented Marie- tion rate likely to be rapid over the next five Eve Ducharme, president and CEO of Nüvü years,” added Bachynski. - François Châteauneuf, Camēras, which has developed ultrasensi- Program Manager, Environment, tive cameras used in space – up to 100 times National Optics Institute more sensitive than any other product on A highly innovative sub-sector the market. There are more than 40 optics and photon- This ecosystem has led to various break- ics companies based in Québec and five throughs in space applications. The INO, major optics and photonics research cen- for example, has spun out a number of com- ters, accounting for 300 jobs and C$400 panies in optics and photonics. “By gener- million in annual sales, with space as a ating such a high number of companies, growing area of application for the technol- INO has also contributed to the ecosystem ogy generated in this field. Québec City in given that most of them have chosen to lo- particular is recognized as a hub for optics cate here,” remarked André Fougères, Vice developed technology for thermal cameras” and photonics. Laval University generates President Business Development and Op- used by NASA to measure the ocean’s sur- much of the province’s manpower in the erations at INO. “Some of these companies face temperature. field and is home to the Center for Optics, are now bigger than INO.” ABB’s Space and Defense Systems di- Photonics and Lasers (COPL), Canada’s One example is TeraXion, which is devel- vision, based in Québec City, develops largest university research center in optics oping a fiber optic telecommunication plat- optical-based analyzing and sensing instru- and photonics. Other major research institu- form for multi-sensor deployment onboard ments typically used to measure the atmo- tions include the National Optics Institute aircraft. INO has also completed numerous sphere with applications such as weather (INO) and the Defense R&D Canada facil- technology transfers in the space industry. forecasting, measurement of pollution and ity, both also located in Québec City. For example, it has worked with the CSA greenhouse gases and measurement of land The roots of the province’s strength in op- and the European Space Agency to develop for use in agriculture and urban planning. tics and photonics can be traced back to the a fiber laser transmitter for optical-based The company has a contract worth over introduction of optical fiber in telecommu- communication between satellites and has $100 million with the U.S. government on
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports EDITORIAL
the CrIS weather forecasting program, re- long-term trend is the increasing demand “ flecting the strength of demand for its ser- for enhancements to the accuracy, sensitiv- vices. ity and coverage of measuring sensors,” re- There is somewhat of a misconception Québec also has a thriving optics and marked Jacques Giroux, business develop- that countries’ space industries rely photonics start-up scene, often linked to ment manager at ABB’s Space & Defense almost exclusively on the budget research institutes. For example, Nüvü Systems division. Another key trend is the of their national space agencies. In Camēras was founded on the back of co- rising demand for smaller constellations founder Olivier Daigle’s PhD thesis on of satellites which poses a challenge for fact, in the last 10 years or so, many electron multiplying charge coupled device optical based components. Giroux further explicitly commercial entities have (EMCCD) technology at the University of remarked: “In some cases though, spatial done very well without the support of Montréal and quickly garnered the interest resolution and sensitivity may limit the size government, pursuing activities such of NASA, which requested a prototype of reduction of satellites so more sizable in- as collecting and selling space data the camera Daigle was developing. “The struments will certainly remain.” or constructing rockets in the case of number of applications is endless and we SpaceX. Indeed, there is a stronger are continuously finding new opportuni- trend in private commercial ventures ties,” commented Marie-Eve Ducharme, Positioning the cluster for the future supporting the work of national space president and CEO at Nüvü Camēras. programs through the services they Some examples of applications include The opportunities for space technology are provide. observing exoplanets, adaptive optics in seemingly infinite and optical components conditions of atmospheric turbulence and have clear advantages over other forms of for surveillance purposes by the military. instrumentation and communications. The Another company that found its roots in re- CSA will likely play a prominent role in - Sylvain Laporte, search is MPBC, which began as a spin-off driving the industry as it has done in the Chief Executive Officer, of RCA Canada’s, the electronics company, past. From an early stage, the CSA has Canadian Space Agency Research and Development Laboratories. backed Nüvü Camēras with millions of dol- lars and it is the main client for the INO’s 93 technology transfers related to the space in- Safer, lighter, with extra capacity dustry. Indeed, changes in the CSA’s fund- ing distribution can have important impli- Optical components offer many advantages cations for the cluster. for space activities. Broadly outlining their “In the last five years, the proportion of our benefits, Fougères elaborated: “Compared projects with aerospace-focused companies to electrical components, optical com- has been about 8% and these have been ” ponents do not create a spark or electro- mostly focused on payloads,” remarked magnetic interference (EMI), making them Fougères. “The percentage has previously nadian business is very important for us, a safer option overall. Fiber optics are also been higher but the freeze on the CSA has with the CSA being our largest client, but lighter than electrical components and use a affected demand for our services. it is not our largest market. On average, we low amount of energy.” Indicating that extra funding should be sell more outside the country than inside, In the field of communications specifi- made available outside of large projects especially to the United States,” explained cally, optical technology can transfer a lot such as the RADARSAT Constellation Giroux. more data than radio frequency technol- Mission for Canada’s participation in in- By way of another example, U.S. defense ogy. “We have seen in the space industry ternational projects, Fougères assessed: sub-contractors use MPBC’s technology that radio frequency (RF) links are now “It would be better if the CSA had a base due to the low probabilities of interceptions. not sufficient to transfer large amounts of budget to engage in technological devel- Looking ahead, the cluster is building on data from and between satellites, which has opment and additional funding if Canada its success to position itself for the future. only increased in volume over time. Optical would like to engage in international proj- Québec’s government will be establish- technology, on the other hand, can trans- ects. This would help position the Canadian ing the Québec Optical-Photonics Center fer much higher levels of data,” explained space industry more competitively globally, of Excellence later this year to further de- Bachynski. MPBC’s technology is ideal for especially given foreign governments want velop the cluster through support for inno- satellite communications because it offers the assurance that a company’s home gov- vation, marketing and skills training. With high content capabilities through highly ernment has shown confidence in their tech- the number of satellites in space increas- precise beams and the ability to select very nology before also investing in it.” ing exponentially and high demand for the specific wavelengths. However, the CSA is by no means the only data collected, the number of applications However, as the amount of space activ- driver of the industry, with the neighbour- for optics and photonics will only multiply. ity and demands for data increase, require- ing U.S. market acting as a particularly Québec is well-positioned to meet and capi- ments are becoming more demanding. “A pronounced source of revenue. “The Ca- talize on this demand. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations INTERVIEW Global Business Reports
AF
our role as a key player in the innovation for optical based communication between chain between universities and companies. satellites. In addition, we have developed Even more importantly, it demonstrates technology in the area optical processing the relevance of our internal R&D activi- of synthetic aperture radar (SAR) im- ties and their contribution to the growth of ages and in the area of carbon-reinforced industries. polymer materials, allowing us to create Over the years, we have executed 68 tech- extremely light-weight optical payloads nology transfers and 32 spin-off compa- that are also very robust against to tem- nies. In the last five years, the proportion perature change. This technology will be- of our projects with aerospace-focused come more important as the space industry companies has been about 8% and these continues to move towards smaller space- have been mostly focused on payloads. craft with lower thermal mass, which are FC The percentage has previously been high- therefore more susceptible to large swings er but the freeze on the Canadian Space in temperature. Agency (CSA) has affected demand for André our services. With regard to aeronautics What are some of the advantages of us- projects, we have participated in eight ing fiber optics in aircraft? Fougères & technology transfers. AF: Compared to electrical components, optical components do not create a spark Québec City is a center of excellence for or electro-magnetic interference (EMI), François optics and photonics. How dynamic is making them a safer option overall. Fiber the local ecosystem? optics are also lighter than electrical com- Châteauneuf FC: Laval University is a very important ponents and use a low amount of energy. player as it generates a lot of highly skilled 94 manpower in optics and photonics. De- How could the government better sup- AF: Vice President Business Development fense Research and Development Canada port Canada’s space industry? and Operations (DRDC) has an optronics center in the city FC: Canada is relatively small compared FC: Program Manager, Environment which also generates many new ideas and with countries like the United Sates or NATIONAL OPTICS INSTITUTE technologies. Along with INO, these two China and the government’s support is (INO) organizations have been most active in commensurate with the country’s size. building the optics and photonics ecosys- Nevertheless, a large part of the CSA’s tem in Québec City. budget is allocated to large projects such AF: By generating such a high number as the RADARSAT Constellation Mission, of companies, INO has also contributed which restricts funding for other important The National Optics Institute (INO) is a to the ecosystem. Examples of successful initiatives that we might work on. It would not-for-profit technological design and de- SMEs we have spun off include Optel and be better if the CSA had a base budget to velopment company specializing in optic TeraXion. engage in technological development and and photonic solutions. additional funding if Canada would like Could you provide more details on to engage in international projects. This Could you provide a brief introduction INO’s involvement in international would help position the Canadian space to INO and its main product and service aeronautics and space projects? industry more competitively globally. offering? FC: Since the global space industry is very AF: INO is a research and technology nation-state focused, we mostly work with What are the key objectives for INO in company of around 200 employees, the the CSA. Where we do work with inter- the next few years? vast majority of which are dedicated to de- national space agencies, it is because of AF: One of the key goals is to provide veloping technology based on optics and our specialist knowledge in niche areas. packaging solutions for integrate photon- photonics. About two thirds of our work is Uncooled infrared microbolometers is one ics devices which includes optical fibers with SMEs, whilst approximately 15% is of them since INO is, to our knowledge, and electrical feedthroughs. Printed pho- with large corporations and the rest with the only organization offering custom de- tonics is also a new area we are working government and universities. 50% of fund- velopments around that technology. We on that will be a big area of focus. It is ex- ing for internal research comes from the also have conducted several space projects pected that printed photonics technology Québec and federal governments and the with the CSA and European Space Agency will lower the cost of photonics devices other 50% comes from direct contracts (ESA) such as investigating the radiation and the new types of sensor will include with companies. This balance is important hardness of optical fibers and transceivers capabilities for physical, chemical as well for us to preserve because it helps maintain and developing a fiber laser transmitter as biological detection. ▬
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports INTERVIEW
cal application is the monitoring of species located in Canada, such as those providing or characteristics of the atmosphere in ar- optical parts and machined parts. Howev- eas such as weather forecasting, measure- er, we must buy some of the more sophis- ment of pollution and greenhouse gases. ticated parts internationally because they Other applications include the measuring are not completely available in Canada. of land, which involves more imagery with multi- or hyperspectral instruments for use Are there any key trends in satellite pay- in activities such as agriculture, forestry loads that have influenced ABB’s prod- and urban planning. uct offering? Our developments tend to be based on our A long-term trend is the increasing de- analysis of future needs. As the govern- mand for enhancements to the acccuracy, ment is an important customer, we follow sensitivity and coverage of measuring sen- their direction in their programs and posi- sors. We are able to continue improving tion ourselves to respond to their needs. our sensors by keeping up with technology The Canada missions are a good indication and always being proactive in anticipating Jacques of what is done elsewhere, so we are suc- and pursuing new developments in detec- cessful in finding business further afield. tors, sensing techniques, etc. In terms of Giroux Through other agencies and companies we the production process, we are seeking also work in the United States, Japan and better ways to efficiently develop our in- Europe. struments and follow trends for different components and materials. The business unit exports 70% of its Business Development Manager, space products. What were the reasons To what extent are private companies Space & Defense Systems for setting up a base in Canada? becoming more involved in space activ- ABB The roots of our business in the space in- ity? 95 dustry stem from a small company that More and more private companies are be- was founded in Québec City that devel- coming involved in the new space econ- oped research instruments. This company omy, particularly in constellations, where was acquired by three successive compa- there are many commercial opportunities. nies, the last of which was ABB in 2000. An example of this is satellite imagery of The company was very complementary to the ground–there is an appetite in the mar- ABB because it required sensing devices ket for new developments in agriculture, ABB is a global engineering company for its automated processes. ABB draws such as precision farming, from both gov- much benefit from this business unit- be ernmental and commercial organizations. Could you briefly introduce ABB’s cause our instruments help them measure We are trying our best to follow activities Space & Defense Systems activities in the efficiency of processes, power distri- in these areas and be prepared to respond Canada? bution and generation, energy efficiency to changes. In some specific cases we are ABB is organized into four global divi- and environmental impacts –all key areas directly involved in supporting the estab- sions and is present in about 100 different in the wider company’s work. lishment of business cases for constel- countries, with many locations in Canada. lations to ensure that we have a primary The business unit that develops products Could you comment on the space eco- role when these new initiatives progress. for space applications is part of ABB’s in- system in Canada and its importance in For example, we have been working with dustrial automation division and is based supporting ABB’s business? MDA on some studies it has done for the in Québec City. This business unit special- The industrial ecosystem revolves around CSA. izes in optical-based analyzing and sens- MDA in many ways because they are the ing instruments. We market these for use only major prime contractor. At ABB, we What are the objectives for the business in various applications, including several tend to work directly with agencies or unit over the next few years? within the space industry. prime contractors to offer them our in- Opportunities in earth observation are strument modules for satellites. However, multiplying, so we want to tap into this Could you provide more insight into the whilst the CSA is a key strategic client, area. We need to diversify and closely product offering and the applications Canada is not our largest market. Our big- monitor what instruments will be needed. within the space industry? gest contract, the CrIS weather forecast- We will try to be proactive with all agen- Our optical instrumentation is mostly used ing program with the U.S. government, cies, space industries and new players for remote sensing applications, i.e. taking is worth in excess of US$100 million. On looking for funds and starting commercial measurements from a distance. One typi- the other hand, many of our suppliers are initiatives. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations INTERVIEW Global Business Reports
One application of our technology is the self-healing system for space- craft developed in collaboration with Concordia University for the Cana- Jane dian Space Agency (CSA) and Institut National de la Recherche Scienti- fique - Université du Québec (INRS). The technology works by releasing a resin when cracks appear in the material used in spacecraft, rather like Bachynski our bones self-repair over time.
President To what extent is the increasing use of constellations affecting de- MPB mand for MPBC’s services? COMMUNICATIONS In order for companies like Google and Facebook to provide internet ser- vice to remote areas, they will increasingly need to use satellite commu- nication. We see this as the new wave of development in telecommunica- MPB Communications (MPBC) is a leading supplier of innovative, high tions. Driven by the need to make remote areas more connected, Canada performance fiber laser and fiber amplifier subsystems to the interna- has become a leader in satellite communications. Technology developed tional high tech industries, including the space industry. in the country by players such as MPBC will play a big part in capturing opportunities presented by this new wave. Could you briefly introduce MPBC and its work with the aero- With the decrease in costs associated with developing satellites, there space industry? will be increasing opportunities for applications that provide a commer- MPBC was founded in 1976 as a spin-off of RCA Canada’s Research cial and societal benefit. MPBC partnered with GHGSat in the launching and Development Laboratories, so its roots are very much in R&D. With of its first nanosatellite which has a spectrometer measuring CO2 and the advent of the optical amplifier in the 1990s, MPBC began to focus methane in the atmosphere. This shows how a small company has the its R&D on long-distance communications and repeated links using this ability to launch small platforms that can have long term implications technology. We have seen in the space industry that radio frequency (RF) that benefit all citizens. If we know how to use space to our advantage, it links are now not sufficient to transfer large amounts of data from and opens up many possibilities to improve life here on Earth. between satellites, which has only increased in volume over time. Op- tical technology, on the other hand, can transfer much higher levels of What are your key goals for the next three to five years with re- data. Our technology in particular offers very high content links and very gard to the space sector? 96 directed beams for transferring data, making it ideal for satellite com- We want to ensure that our optical amplifiers are flying on satellites and munication. The fiber material we use is also ideal for airborne structures sending data at gigabit speed. To that end, we are focusing on the design due to its light weight and because it allows for the selection of very of our amplifiers so that they have the optimal power efficiency, mean- specific wavelengths. ing maximum optical output for the least amount of electricity used. ▬
four times. Depending on the detector used, we offer fast-imaging or wide-view imaging. Fast-imaging is used where adaptive optics is need- ed, such as in conditions of atmospheric turbulence. This means signals Marie-Eve can continue to be sent and received, even in challenging conditions. Ducharme What benefits do Nüvü Camēras’ partnerships with research or- ganizations in the province bring to the company? President and CEO In the face of competition from much bigger, publicly-traded companies NÜVÜ CAMĒRAS with large R&D budgets, collaboration with universities, government institutions and complementary companies is essential and allows us to become even more specialized. So far, this strategy has served us well as Nüvü Camēras’ technology is 10 times to 100 times more sensitive than any other solution on the market. This competitive edge has meant we have been able to secure millions of dollars of funding from the Ca- Could you provide a brief introduction to the company? nadian Space Agency. Another area in which universities are aiding our Our technology works by using EMCCD detectors, which are a thou- work is in the development of wider fields of view for our cameras–cur- sand times more sensitive than the human eye, to count photons in con- rently their main limitation. ditions of very low light. Light consists of waves and particles and we build electrical systems to transform these elements into electrons and What are your key goals for the next three to five years? amplify them to make them more visible. Nüvü Camēras is working in collaboration with manufacturers of de- tectors to drive further innovations in EMCCD technology, such as in- What are the main applications of your technology in the space creasing the speed of detection. Our first off-the-shelf commercial space industry? cameras will be launched in September 2018. We are also working on a Nüvü Camēras technology was first used in astronomy, including in lot of applications for our technology in space instrumentation and are NASA’s observatories, as it improves the sensitivity of telescopes by developing a version of our camera for the medical industry. ▬
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports EDITORIAL
Space: Québec’s new economic frontier
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The space industry is undergoing a fun- sure on costs,” explained Sylvain Laporte, pany in Canada and diversify its offering. damental change. From the beginning of Chief Executive Office of the CSA. The company’s growth will hinge on de- the ‘Space Race’ in the 1950s to the early Furthermore, automation is now playing a velopment of work packages to install as- 2000s, the vast majority of space activ- role in the production of satellites. Groupe sembly lines, special equipment to support ity was conducted by governments. This ADF, whose subsidiary Latecoere Servic- the production of testing in the space and is now changing as more private sector es has a base in Montréal, is a partner on aeronautics sectors, as well as develop- companies have entered onto the scene in the production line for the OneWeb satel- ment in other industrial sectors. a myriad of areas such as building satel- lite constellation, which intends to bring lites, earth observation, broadband internet broadband internet to hundreds of millions access and space transport. Driving this in hard-to-reach areas of the globe. This The democratization of the development is the increasing use of data line will produce one satellite per day at space economy obtained from space in everyday life on a production rate 50 times faster than any Earth, made possible by falling costs of previous project. These developments Increasing demand for nanosatellites and satellites and technological developments meet the demands for more data services constellations is profoundly changing the to transfer the functions of larger satellites used on Earth. “Due to increasing digitali- space industry landscape globally, with to smaller ones, often as part of a constel- zation, the demand for constellations will Québec being no exception. Today, even lation. only increase,” highlighted Marc Eliayan, SMEs, start-ups and universities can The production of smaller satellites is Latecoere Services’ CEO. “The space in- launch satellites and the number of com- linked to improvements in consumer elec- dustry is fundamentally changing as there mercial and societal applications is multi- tronics; smartphones have shown that are many more private programs, whereas plying. GHGSat, a Montréal-based compa- much of the technology that would have before public programs dominated the in- ny, is a prime example. With no more than been hosted on a large satellite can now be dustry. Formerly, we worked mostly with 15 engineers, it has launched microsatel- stored in a very small object. “The min- the different space agencies but now we lites into space to measure greenhouse gas iaturization of satellites is a very positive are working on at least three private pro- (GHG) emissions and provides services to trend as it brings the development of full grams.” buyers all over the world. “10 to 15 years satellites within budgetary reach of many Following Groupe ADF’s acquisition of ago, this could only have been achieved by smaller companies, leading to increased Latecoere Services in December 2016, the governments…As development costs con- competition and a further downward pres- plan is now to triple the size of the com- tinue to decrease and space becomes more
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations EDITORIAL Global Business Reports
Image courtesy of MDA
accessible to many more organizations, there will be a growth in open-source data providers and start-ups using this data for a wide range of commercial applications which improve citizens’ quality of life and benefit society as a whole,” predicted La- porte. GHGSat also exemplifies the changing dy- namic between the Canadian government and Québec’s space industry. “The gov- ernment has also become a customer of companies that launch constellations and smaller satellites and has consequently de- risked itself of some of the costs involved in launching satellites into space,” Laporte commented. Furthermore, with constellations of satel- lites replacing larger, single satellite mis- sions, a failure of one or two satellites in a mission is a less critical issue. This has 98 led the CSA to change the thinking behind its funding strategy as it is now prepared to take on more risk given the increase in the number of satellites produced and the lower costs associated with each. Remark- ing on this shift in the relationship between the state and the private sector, Eliayan remarked: “The space industry is funda- mentally changing as there are many more private programs, whereas before public programs dominated the industry. Former- ly, we worked mostly with the different MDA is therefore investing in enhance- ponents and streamlined test campaigns. space agencies but now we are working on ments to its satellites which will allow op- Going forward, MDA’s philosophy is that at least three private programs.” erators to adapt their satellite service over new manufacturing techniques will in- the lifespan of its existence. crease efficiency and reduce non-recurring With the increasing number of satellites costs. Flexibility is the key being launched into space by operators, coupled with increased competition among This dramatic shift towards constellations satellite assemblers, cost per satellite is an has led to a change in strategy of Québec’s increasing area of focus for MDA’s clients. Where next? prime space industry contractor, MDA. In response to this trend, MDA is investing Joanna Boshouwers remarked: “Flexibil- in the development of processes and prod- The space industry is changing at such ity is becoming increasingly important as ucts that can be less cost-intensive when a pace that in fifteen years from now it business requirements for satellite data are ordered in higher quantities. As part of its will likely look completely different and changing more rapidly and new communi- mission to maintain its leadership in inno- become dominated by private players. cations applications are emerging. Where vative constellations, the company is em- “Space is evolving very rapidly with the historically a satellite was designed for a bracing what it calls ‘smart design’, which advent of new technologies leading to a 15-year lifespan with a pretty good idea of involves a detailed evaluation of a client’s large increase in available data and new who would be buying its capacity over that needs, using current and new manufactur- countries entering into the industry, mak- time, today demand profiles are changing ing techniques, smart batching and the use ing it a very dynamic environment,” sum- much faster.” of up-screened off-the-shelf (COTS) com- marized Laporte.
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports EDITORIAL
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Amidst this change, established companies of funding at present. While the CSA ac- military and defense budgets and ecosys- like MDA and ABB are adapting, whilst tively encourages more private companies tems as a result, such as the Unite States, new entrants with new ideas enter into the to become involved in the space sector, the China and the European Union, which market. “We are trying our best to follow back-seat role it has played in satellite de- serve as a key source of demand for space activities in these areas and be prepared to velopment in the last 10 years may have companies located in those countries. In respond to changes,” commented Jacques had drawbacks as well. “With Canada hav- the shadow of giants with relatively ample Giroux, business development manager at ing been an early pioneer in satellite com- means, Canada’s space industry may have ABB’s Space & Defense Systems division. munications, the sector has not recently to look elsewhere to secure the resources In some specific cases, we are directly in- been a priority for the Canadian govern- to invest in the sector’s future. Canadian volved in supporting the establishment of ment,” explained Boshouwers. “As a re- companies therefore need to develop ro- business cases for constellations to ensure sult, we are at a disadvantage compared to bust export strategies and links to inter- that we have a primary role when these our competitors in terms of industrial re- national markets. Although currently suc- new initiatives progress. For example, we turns to Canadian industry for its govern- cessful, Québec’s space industry will have have been working with MDA on some ment spending. This seems to be changing, to continue to innovate to keep up with the studies it has done for the CSA.” but we have lost precious time.” dramatic technological changes affecting An interesting question is what exactly the For its part, the CSA has stated it is com- the sector. Just as importantly, it will need future role of the government will be in the mitted to funding R&D programs for new to export to ensure it has the resources to space industry as, although more private satellites. invest in the very innovations it needs to companies are becoming involved in the Nevertheless, Canada faces competition remain a leader in satellite communica- industry, the CSA is still the main source from larger countries with much bigger tions. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations Image courtesy of AV&R GBR • Industry Explorations • QUÉBEC AEROSPACE 2017 ADAPTING TO CHANGE
“Today’s economy is favorable, with an average unemployment rate of 6%, one of the lowest in the last 40 years. We have very strong economic stability and a favorable fiscal system…Private investments are still somewhat of an issue, but with the tools that we have Investissement Québec is able to get a lot of leverage on the dollars spent. For our manufacturing initiative, every dollar generated two-and-a-half dollars of private investment. There is an appetite for innovation.ˮ
- Pierre Gabriel Côté, President and CEO, Investissement Québec EDITORIAL Global Business Reports
Aerospace in Québec: The case for an industrial policy
Within Canada’s aerospace sector at large, Government support cialized equipment to the sector. In Feb- Québec accounts for 60% of its share of ruary 2017, the federal government also GDP and 60% of exports. Competition The federal and provincial governments announced it was supporting Bombardier for international market share is therefore have shown their commitment to Québec’s with C$372.5 million in repayable contri- fierce and, as companies are increasingly aerospace sector through various funding butions to fund R&D for the new Global 102 able to source suppliers and partners across pledges and initiatives. “Québec’s aero- 7000 business jet and ongoing activities re- the globe thanks to greater accessibility, space industry is critical to the economy,” lated to the development of the company’s this competition is also felt within the do- emphasized Dominique Anglade, Minis- C Series aircraft. This comes in addition to mestic market. It is therefore paramount ter of Economy, Science and Innovation, the US$1 billion invested by the Québec that companies both large and small are Government of Québec. “Aerospace is a government into Bombardier’s C Series in able to offer a competitive set of products key area of focus for economic develop- return for a 49.5% stake. and services. ment because it aligns with three main pil- Alongside these public spending pledges, Most players that make up the Québec lars that must be met for economic growth: there are a plethora of government funded aerospace cluster recognize the intensity of entrepreneurship, advanced manufactur- programs, institutions and policies that international competition, not just from es- ing and exports. For example, aerospace support Québec’s aerospace sector. Cana- tablished players such as the United States, comprises the highest concentration of da’s Industrial and Technological Benefits Western Europe and Brazil, but also from R&D out of any other industry and is the (ITB) policy mandates that companies other large countries. “Countries such as number one export driver, which is key that are awarded defense procurement China, Russia, India and Japan are hot on considering exports (40% to the rest of contracts from the federal government the heels of Canada in terms of aerospace,” Canada and 60% internationally) account must make investments in Canada equal re- marked John Maris, president of Marin- for 50% of Québec’s GDP. The sector also to 100% of the value of the contract. Ben- vent, which provides consulting, services, employs 40,000 people and Bombardier eficiaries of this policy include Mannarino training, tools and IP to the industry. “Since alone is the largest aeronautics company in Systems and Software, an engineering firm only certifying bodies in Canada, Europe, Canada. For these reasons, the government that supplies mission-critical equipment to the United States and Brazil are currently has launched industrial strategies over the the aerospace and defense sectors, which is recognized worldwide, Canada has an ad- years to support the industry and has re- receiving a C$10 million investment-loan vantage of a few years. However, since cently made unprecedented investments for, among other things, proprietary soft- this barrier will only last so long, there is into developing the sector, particularly fo- ware systems for aircraft. little stopping emerging countries reaching cusing on innovation.” Meanwhile, the Strategic Aerospace and Canada’s level of expertise.” Ahead of the Paris Air Show in June of Defense Initiative (SADI) provides repay- Whilst both the federal and provincial this year, the federal Ministry of Innova- able contributions to support research and government recognize this and have done tion, Science and Economic Development development (R&D) projects in the aero- much to support the industry, some argue announced a C$2.2 million contribution, space, space, defense and security sectors. that a proper aerospace industrial policy is through Canada Economic Development Furthermore, the government funds R&D needed to ensure the sector remains glob- for Quebec Regions (CED), to six aero- programs for the sector through organi- ally competitive. space companies that provide highly spe- zations such as the Consortium for Aero-
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports EDITORIAL
space Research and Innovation in Canada government investment into large play- (CARIC) and, in Québec specifically, the ers is essential as they are too big to fail, Consortium for Research and Innovation particularly when they are a true driving “ in Aerospace in Québec (CRIAQ). force for the local industry. However, these At the provincial level, Québec’s Minis- larger players must focus on their margins Companies are not sufficiently try of Economy, Science and Innovation and it makes little sense for them to source incentivized to keep their operations in recently published its ‘Québec Aerospace suppliers in-country if there are more cost- Canada over lower-cost jurisdictions. Strategy’ for 2016 to 2022, where it com- effective solutions further afield. For this It is the government’s role to provide mitted to C$510 million in government reason, many players, including Québec’s the right incentives for a vibrant contributions and drew up a 10-point plan OEMs, rationally invest where costs are for the industry’s adaption to global trends. lower rather than in the region. “The so- aerospace industry in Canada. We Key elements include attracting Tier 1 and lution is for the government to break the have witnessed the decline of the 2 suppliers, transitioning to Industry 4.0 loop by creating an aerospace policy that aerospace industry in other countries, and boosting exports. As well as owning encourages a more strategic investment such as the United Kingdom, due to a a 49.5% stake in Bombardier’s C Series distribution across the whole sector to en- lack of government policy to support program, Québec’s government recently courage SME to grow and prosper,” com- the sector’s competitiveness. We do provided a C$45 million loan to MDA to mented Maris. not want this to happen to Canada. set up a center of excellence for satellites. Another area in which industrial policy The Province also helps SMEs transition to could play a key role but is currently lack- advanced manufacturing processes, con- ing is in bringing about integration of ser- - John Maris, 103 tributing C$400 million of funding across vices within Québec’s supply chain, a key President, 240 projects, for example. demand of the OEMs. The best approach, Marinvent Government support is broadly recognized however, is still somewhat unclear. Many as essential for the industry. The prominent stakeholders believe consolidation is the global position of the industry indicates answer; others argue in favor of a consor- that this support has been effective to date tium model, where suppliers partner on and local companies generally seem to be large orders and integrate their capabili- well supported. Nevertheless, global dy- ties. Whilst consolidation is a longstand- namics are rapidly changing and the indus- ing trend in the industry, it will take a long ” try will need to continue to adapt or risk time for new Tier 1s and 2s to form. An- Canada (EDC) should take on non-core falling behind. “In order to compete with other approach would be the attraction of risks which SMEs do not have the resourc- emerging economies, it is essential that Tier 1 integrators from abroad, which is es to manage,” Maris suggested. governments offer support to aerospace an area of focus for Aero Montréal and the Under such a scenario, OEMs would have companies to level the playing field,” Québec government. “Many companies confidence in a consortium’s ability to de- noted Chris O’Neil, president and COO of are currently too small, typically with rev- liver. Mecaer America. enue at around C$20 million. They must Therefore, whilst the government is com- consolidate to form larger companies in mitted to helping the industry, a more stra- order to compete. However, the process is tegic approach could significantly help the In need of a plan particularly long given the entrepreneurial sector. “We have witnessed the decline of nature of these companies, which often the aerospace industry in other countries, Currently, there is no overarching indus- means owners are unwilling to relinquish such as the United Kingdom, due to a lack trial policy which joins all of the multitude control,” remarked Jean Wilhelmy, senior of government policy to support the sec- of initiatives together. Some in the industry vice-president, Aerospace, at Fonds de tor’s competitiveness. We do not want this believe the government needs to employ a solidarité FTQ. to happen to Canada,” concluded Maris. more cohesive and coordinated plan if the OEMs tend not to favor consortium mod- Whilst the outlook for Québec’s aerospace industry is to continue on its positive tra- els as they prefer to hold one entity ac- industry remains undoubtedly positive for jectory relative to other rising stars world- countable per contract. “As part of a wider the foreseeable future, a proper industrial wide. The absence of such thinking could industrial policy, government entities such policy could be key in ensuring the sus- arguably hurt the industry in tangible ways. as the Business Development Bank of tained prominence of the sector interna- For example, it is widely accepted that Canada (BDC) and Export Development tionally. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations EXPERT OPINION Global Business Reports
100% of Nothing
By Phil Cole, VP Business Development, Marinvent
Collaboration and consortia have been well smaller companies would prefer to have party organization is required to underwrite established for many years in the Canadian 100% of a niche market than tackle a mar- the consortium. The only appropriate orga- aerospace market, with R&D consortia ket that is 100 times larger and share the nization would be a Government-backed such as CRIAQ, CARIC and GARDN ad- proceeds with their competitors through a entity such as the Canadian Crown Corpo- mirably demonstrating the ability to collec- consortium. ration (CCC), the Business Development tively solve problems and share intellectual Canadian aerospace SMEs have three Bank of Canada (BDC) or Export Devel- property access between universities, re- choices: Continue to act alone and end up opment Canada (EDC). Until simple rules search institutions, SMEs and larger “spon- with 100% of nothing; look to be acquired have been established allowing a consor- sor” organizations. to survive; find a way to band together in tium to obtain such commercial assistance, However, most models focus on individual order to collectively share in larger con- we are likely to continue fighting a losing big “R”, little “d” R&D projects and do tracts by offering more value to customers battle in an aerospace market which is in- not translate into the creation of wealth for through consortia. credibly risk-averse. SMEs. Neither do they establish enduring The Canadian Government has recognized The good news is that this idea is already 104 ties between SMEs to capitalize on bring- this fact and has recently launched the In- in development. The Aerospace Industries ing profitable new products and services to novation Superclusters Initiative, which Association of Canada (AIAC) under its market. specifically targets projects that will create Small Business Working Group is put- So why is it so difficult for Canadian jobs and new SMEs through commercial- ting together a document that will provide aerospace SMEs to grow and thrive in a ization of products and services in consor- SMEs with practical advice on forming country where aerospace is clearly a rec- tia. This is a fundamental shift away from consortia. Part of the preparatory work on ognized priority and where collaboration funding pure early stage R&D towards this document included very positive dis- is already a norm? generating sustainable wealth and prosper- cussions with BDC and EDC with respect Today’s global aerospace industry is char- ity and it is a very welcome move. to treating consortia differently. acterized by continued consolidation of The obvious question raised by SMEs There is, however, still one enduring prob- the supply chain, translating into fewer when considering the consortium option is: lem that must be overcome; the conserva- opportunities for smaller companies with are the OEMs and Tier 1s ready to con- tive nature of Canadian aerospace SMEs. niche products and services. Put simply, tract with a consortium of SMEs? It is incredibly difficult to convince a pri- the OEMs and Tier 1 integrators around the This is a very big question indeed and it is vate entrepreneur that has built a company world are looking to outsource larger and true that consortia have not yet established from scratch over 20 years that they should larger pieces of their product lifecycle. In a workable environment to make this an “risk” that investment by changing the way so doing, they are forging enduring rela- easy choice for customers. they work. What is worse is to ask them to tionships with suppliers who are able to of- A typical supplier contract (even those with give up having 100% control of their prod- fer more turnkey deliverables for which it is our own Government) has clauses within it ucts and services and to accept a majority easier to justify the value and share the risk. that few SMEs can service adequately. For consortium decision. They may have 100% If a customer has a choice between out- instance, the protection of the customer in of a small niche market today, but in time sourcing US$100 million of its costs to a the event of non-delivery, late delivery or that niche will be swallowed by a supplier single supplier of a subsystem (wherever delivery of a non-performing product. Cus- that can satisfy demand and offer more be- they are in the world) through a single com- tomers want to see a commercial organiza- sides, at which point our conservative SME mercial vehicle or outsourcing US$1 mil- tion with deep enough pockets to rectify the will face having 100% of nothing. lion each to 100 SMEs, each requiring its problem or pay liquidated damages under A piece of advice for any SMEs consider- own commercial vehicle, point of contact such circumstances. ing forming a consortium: Look first to the and management overhead, it is abundantly In a consortium model, one of the members SMEs that appear as much like you as pos- clear that the SMEs are out of luck. must be large enough and willing to bear sible. These are your competitors today but, One key challenge is that, due to the entre- this commercial risk on behalf of the other if you can find a way to collaborate, you preneurial nature of Canada’s SMEs, some members–which does not happen–or a third will be much stronger together. ▬
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports THOUGHTS
The consortium model could work if OEMs can be convinced that SMEs can take on the liability for contracts. EDC's mandate is to help small companies get all the financing they can get from banks but we know that banks' risk appetite is limited. Therefore, we are here to add capacity to the banks from a financial standpoint, reduce risks and help the companies in the way that they are structured.
- Alexandre Faria, VP Business Development, Export Development Canada (EDC)
For many years now, OEMs have expressed the desire to work with fewer suppliers. This has led to increased pressure on some SMEs to consolidate or, as a minimum, associate themselves with Tier 1 suppliers. Initially, SMEs believed that this action by the OEMs would be detrimental to them. However, with time, everyone has found their ‘niche’ and we now see consortium form for specific projects. These consortia only remain together for the time of a project. This flexibility is very good for the industry.
- Jacques Comtois, Vice President and General Manager, L-3 Communications MAS 105
The Canadian government is definitely trying hard to change the dynamic in Canada’s aerospace industry by encouraging companies to collaborate more. Due to the entrepreneurial nature of Canada’s SMEs, some smaller companies would prefer to have 100% of a niche market than tackle a market that is 100 times larger and share the proceeds with their competitors through a consortium. In addition, whilst research consortia are easily formed and therefore the most common form of consortium, commercial projects are much more complicated.
- Phil Cole, VP Business Development, Marinvent
Québec does not have enough Tier 1s and we need to encourage Tier 3 and 4 companies to work together to fill that gap. This could be achieved through consortiums or joint ventures, not necessarily mergers. Consortiums are not commonly seen in Québec as companies are wary about partnering with competitors. However, there have been some positive developments, including through the MACH FAB 4.0 Initiative in which SMEs work together to develop automation technology. This is why an organization such as Aéro Montréal plays a catalyzing role.
-Suzanne M. Benoît, President, Aéro Montréal
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations EDITORIAL Global Business Reports
Québec’s Aerospace 4.0: A Solution to Cost Pressures?
Aerospace companies globally have faced does not involve only manufacturing, but a number of challenges in recent years digitally links together all aspects and as- which continue to shape the industry. sociated technologies of the business, from “ Competition from lower-cost jurisdic- ordering to delivery, and maybe beyond.” tions has become more pronounced and, The uptake of technologies facilitating au- As an industry, we are well 106 as the world has become smaller through tomation, digitization, robotics, artificial positioned to take advantage of increased accessibility and communica- intelligence, additive manufacturing and these technologies, which are very tion, geographical advantages are dimin- a general progression towards the Internet much integrated into the innovation ishing. With China expected to become of Things has certainly increased, which agendas of the Canadian and Québec the dominant aviation market in the future, is particularly notable in an industry that governments to ensure we leverage as IATA projects the expected number of pas- is historically conservative. “Automation much as possible. There will be much sengers flying to, from or within China to is the future of our North American op- tighter coordination going forward reach 1.3 billion by 2035 and expects In- erations,” commented Maria Della Posta, to develop these technologies and dia’s market to triple over the same time senior vice president at Pratt & Whitney period. For large companies, lean cost Canada (P&WC). “With currency fluc- increase their implementation. structures and streamlined supply chains tuations and market pressure on manu- are more important than ever to pursue facturing and production costs, advanced global leadership positions, whilst suppli- manufacturing is part of our strategy to be - Cynthia Garneau, ers must be cost-competitive in order to globally competitive. Our transformation President, win contracts. gives us the precision, quality and ability Bell Helicopter Textron Canada Used as an umbrella term for new(ish) to address materials and shapes in a way technologies, “Industry 4.0” is a term ut- that heightens product performance as tered by many but generally lacking a solid well. Floor space availability is another definition. “There is a danger that Industry advantage: we can now machine more 4.0 could be viewed as ‘Industry 3.0’ on parts with fewer machines.” steroids, simply automation and digitiza- P&WC’s Mirabel Aerospace Centre is the tion of manufacturing processes with big- first in the industry with a fully horizon- ger computers in order to produce things tal moving assembly line for its PW800 better, faster and cheaper,” said Stephen engine, allowing the height of the engine Yue, Lorne Trottier Chair in Aerospace to be adjusted up and down and rotated ” Engineering and director at McGill Uni- during assembly. “This caters to our em- self was awarded the Leadership in En- versity’s Institute for Aerospace Engineer- ployees' ergonomics as each of them is al- ergy and Environmental Design (LEED) ing. “Production optimization is a con- ways working at the most suitable height,” Gold certification. It features a passive tinuous process; there is no need to label highlighted Della Posta. “Our Mirabel solar wall and energy efficient lighting something that is naturally evolving. One operations are highly automated, designed that maximizes the use of natural light, a major difference of 4.0 versus 3.0 is that it around lean principles and the facility it- highly reflective roof that reduces heat is-
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports EDITORIAL
land effects as well as systems that reduce SME implementation: water consumption by 40%.” a longer-term view P&WC has been pursuing its automation “ journey for the past four years, moving from robotization of key components in its Amid increasing cost pressure from the top Robotics is really the Wild West. In advanced manufacturing centers to fully- of the value chain and a desire to simplify the past, manufacturing required functioning centers producing at a much supply chains, SMEs must adapt in order machines to have a one-to-one more rapid rate. The three new manufac- to stay afloat. Consolidation is inevitable relationship with the task. For the turing lines in Québec and those in Poland as customers show preference for integrat- first time in history, we have robots feature fully-automated cells with less hu- ed service offerings from their suppliers; with more dimensions than the task. man intervention and now require only a SMEs, whilst previously holding an ad- Companies are now moving away from couple of operators. The company is also vantage in terms of flexibility and special- dedicated equipment towards more pushing towards predictive maintenance. ized expertise, struggle to compete. flexible automation. Other processes with potential advantages However, although promises of increased include additive manufacturing. “Addi- efficiency, quality and production- vol tive manufacturing in particular is a very ume are appealing, concerns remain over interesting technology for our product,” whether companies can support the re- - Chahe Bakmazjian, commented Gilles Labbé, president and quired investment. Many SMEs not only Business Team Leader, Robotmaster, CEO at Héroux-Devtek, which specializes lack the investment power, but also the Hypertherm Robotic Software Inc. in landing gear and actuation systems. “In production volumes required to justify the 107 the forging of products, a very long lead initial cost. “In contrast to the automotive time is required for building and obtain- industry, which has product cycles of three ing parts from the supplier, plus the sub- to four years and high throughput vol- sequent machining can result in wasting umes, aerospace contracts run for up to 25 80% of the material. Additive manufac- years and are low in volume,” highlighted turing reduces the long lead time and can Michael Muldoon, director of aerospace reduce the material cost and waste by large operations at Radix Inc. “This means amounts. It is now proven, with GE as a that once SMEs have won an order and good example, that the additive manufac- attained necessary approvals they have ” turing process can design lighter and more little incentive to change their work flows. ICAM’s R&D focuses on merging the reliable components at a lesser cost. Addi- Other countries such as the United King- world of robotics and CNC machining. tive manufacturing will become more and dom, Singapore and lower cost regions “Robots are typically cheap and good at more present in our industry and will be a are adopting automation more rapidly than repetitive motions but they have a lower game changer.” Canada. Québec needs to change this to quality of rigidity than CNC machines,” Héroux-Devtek’s work on its contract for avoid being left behind.” stressed Nassr. “Combining both would the Boeing 777 aircraft landing gear also According to John Nassr, president at produce the best of both worlds. Large involved an investment of over US$110 ICAM Technologies, a specialist in CNC software providers are developing com- million on equipment and capacity, includ- post-processing and machine tool simula- plex, expensive software to program and ing installation of flexible manufacturing tion, scalability is the answer for SMEs: provide robot simulation. The ICAM so- systems (FMS) to automate the process, “We start them off with either pure G-Code lution, on the other hand, offers complete meaning one employee can run four or machine solutions or pure post-processing. configuration with SIEMENS, CATIA and five pieces of equipment simultaneously. We then gradually bring them up to the other big players while staying within the The company also plans to be the first to complete automation solution. Customers PLM global data management. Therefore, employ robotics to paint these landing gear have reported that they have achieved a instead of having to constantly use expen- parts. 15% reduction in programming time and a sive specific modules for CAD/CAM ven- Alongside clear benefits for multination- 10 to15% reduction in cycle time with our dors, regular 5-axis machining is usually als and large players looking for a bigger automation solution. Considering the price enough to link with the ICAM solution and share of international markets, SMEs will of a 5X CNC machine, these two reduc- drive CNC machines as well as robots.” also likely need to follow suit in order to tions are equivalent to the solution paying ICAM plans to focus on making its soft- be considered competitive suppliers. for itself in less than a year.” ware easier for inexperienced users to
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations EDITORIAL Global Business Reports
more competitive if are willing to invest adopt these new processes will struggle in innovation,” commented Real Julien, unless they have a technological niche. “ president at J2 Procurement, a consulting Transition to Industry 4.0 supposes a new firm specializing in supply chain manage- business model for many companies and Compared with more prescriptive lean ment. “The game is no longer the bigger a comprehension of the necessity to inno- manufacturing methods, Industry against the smaller; the game is now the vate–this can be a challenge. Our role is 4.0 is more of a philosophy on how to faster against the slower. If some SMEs to ensure SMEs’ awareness of the impor- approach manufacturing. Companies are not open to getting help outside their tance to make the shift to 4.0 and to iden- need to look at where they can walls, they will, unfortunately but definite- tify solution providers to support them in make most improvement and apply ly, stunt the growth of their business. One that shift.” principles from this philosophy. The of the biggest barriers will be our OEMs. Investissement Québec, a government arm prices for the components Radix If their supply chain strategy continues to for economic development, also launched purchases to develop its systems progress towards lower costs, SMEs may an Industry 4.0 initiative, now in its sec- are coming down, which has a not be willing or able to invest in automa- ond year, which includes financing for positive knock-on effect in making tion or Industry 4.0.” small companies as well as non-financial our own products more accessible. The Québec government’s intention to ad- solutions such as labor support. Barring dress this challenge is apparent in its 2017- the initial investment, the advantages of- For example, a 3D scanner now 18 budget, which indicates planned invest- fered to companies in driving down costs costs under C$10,000 whereas not ment of C$100 million over five years to are blatant; support in the implementation 108 long ago they cost approximately develop Montréal as an artificial intel- phase, both financially and non-financial- C$100,000. ligence (AI) ‘supercluster’. At a national ly, will therefore provide a springboard level, the federal government’s 2017-18 for the increased competitiveness of these budget also shows focus on innovation, companies. - Michael Muldoon, proposing the establishment of a new de- Director of Aerospace Operations, partment, Innovation Canada, which will Radix Inc. distribute investment of up to C$950 mil- lion into a number of ‘superclusters’ over “ the same five-year period. The 2017 fed- eral budget also allocates C$125 million towards a national AI strategy of which Automation is completely changing Québec will certainly play a leading role. the industry…Automation means As the only aerospace hub globally with engineers and a shop workers alike can advanced AI capabilities, the potential for set their focus on high value-added ” application and development is immense. tasks. Everyone is more efficient implement and is training its international In addition to financial aid, there has been and greater value is created in their network of resellers to offer the same ser- a focus on the implementation of these respective roles. vices as in Canada, increasing the compa- technologies by the region’s primary ny’s global reach. aerospace association. To support SMEs While there might be more flexible and with their transition to Industry 4.0, Aéro - Mark Makoukji, scalable packages available, SMEs want- Montréal launched the MACH FAB 4.0 Managing Partner, ing to implement these new technologies initiative, aimed at the more advanced extensively will likely require external companies involved in the previously es- P3 Group financial support. In addition, increasing tablished MACH program, which focuses throughput volumes to justify implemen- on developing supplier competitiveness. tation is required, which will likely mean “Through adopting Industry 4.0 processes, increasing presence in export markets. SMEs become more digitally connected However, SMEs may initially suffer from with their clients, which is a strong in- a competitive standpoint by not being able centive for adopting these technologies,” to offer these technological advantages in outlined Aéro Montréal’s president, Su- the first place. “SMEs can definitely be zanne M. Benoît. “Companies that do not
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports” Global Business Reports EDITORIAL
Training for implementation people with task expertise that might not have expertise in the software and technol- As companies begin to integrate new tech- “ ogy involved in the robotized process. In nologies out of necessity as much as for essence, we are bridging that gap. If huge competitive advantage, the very nature of amounts of training are required, some of the work undertaken will change. Existing the gains of the new process are thrown employees will therefore need to be trained The key is to merge human expertise out the window because the sheer effort and new employees must be prepared ac- and judgement with the use of of programming and validating that robot cordingly. Although some concerns may robotics to maximize the task erodes some of the profitability.” be raised around potential job loss, general performance; we are not yet ready Robotmaster, founded in 1996 as Jabez consensus is that whilst the nature of cer- to replace humans entirely. With Technologies and acquired by Hypertherm tain roles may change, robotics and other surface inspection, for example, the in 2015, continues to develop industrial ro- new technologies will enhance perfor- bot programming technologies. The com- robot will be able to identify a defect mance across various aspects rather than pany’s newly rewritten software, Robot- replace any need for human judgement. and present it to the inspector. When master v7, is scheduled for release in 2017 As universities continue to position them- looking at a part, 99.9% of the surface and is based on an entirely new architec- selves as partners to industry and play a may be good, and a defect can be ture considered to suit the industry’s needs more proactive role in securing practical extremely difficult for a human to over the next five or six years at least. experience for students, they will be inte- catch–they may not catch it at all. Generally, the industry is demanding gral in the training of new talent to sup- The robot will present the defect and greater versatility in its workforce and im- 109 port these technology trends. “There are require a judgement call. plementation of robots and new technolo- also many opportunities within Industry gies require a different kind of manpower. 4.0, or “Aerospace 4.0”,” highlighted Dr. In combination with arising knowledge Hany Moustapha, professor and director - Jean-François Dupont, gaps as new technology is introduced, at AÉROÉTS, Pratt & Whitney Canada CEO, training will be required both to bring ex- (P&WC) Chair in propulsion systems at isting employees up to speed and to pre- AV&R École de technologie supérieure (ÉTS) and pare new employees appropriately. senior research fellow at P&WC. “A key challenge is to demystify these concepts, for which we are offering short courses Industry 4.0 in the future and presentations at ÉTS. Industry 4.0 encompasses entire processes and we will Industry 4.0 presents a means to achieve therefore need to develop these capabili- results that were not previously achiev- ties within the workforce. As well as sup- able. The advantages of automating certain porting our students, we will continue to processes, for example, are clear; higher work with companies of all shapes and accuracy, shorter lead times and generally sizes.” increased efficiency are just some of the ÉTS prides itself on its strong industry ” incentives to invest. However, the invest- links; by placing more than 3,000 interns ment required may knock out some players at companies every year, the university workers may face challenges due to shift- if they cannot keep up with their competi- ensures its students have the practical ex- ing requirements in their day-to-day roles. tors. perience preferred and often demanded Effective implementation is a primary For an industry that exports such a huge by companies. In addition, ÉTS conducts concern for companies as the full extent majority of its production, it is in the re- 70% of research activities in collaboration of advantages will otherwise not be real- gion’s interest to support the technological with industry, a huge leap from the Cana- ized. “One of the main challenges is pro- transformation of its companies. Remain- dian average of 25%. viding an interface to present a complex ing competitive at an international level is Whilst many of these new technologies problem in an easy-to-grasp manner,” paramount and implementation of automa- are perhaps in line with younger genera- explained Chahe Bakmazjian, business tion and digitization processes are a giant tions more accustomed to interfacing with team leader at Robotmaster, Hypertherm step in closing the gap with low-cost juris- tablets and applications, many existing Robotic Software Inc. “We are catering to dictions. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations INTERVIEW Global Business Reports
Jean-François Dupont
CEO AV&R
AV&R is an engineering firm specializing in automation, vision What are some of the results companies can expect to see and robotics with a history dating back to 1994. through the automation of surface inspection? The key is to merge human expertise and judgement with the use Have there been any developments since we met in 2015, par- of robotics to maximize the task performance. The robot will pres- ticularly as companies increase their uptake of automation ent the defect and require a judgement call. technologies? We are currently developing a solution with Rolls Royce and Automation is currently a buzzword in the industry. A lot of will deploy our first inspection system at the AMRC in Sheffield. AV&R’s attraction stems from companies needing to lower costs, Quality is a clear benefit of this kind of solution and also helps the 110 for which the main driver is coming from the OEMs. Because the inspector focus their knowledge on the decision at hand. new engines on the market have been sold at cost or even at a loss per unit, the next years will be marked by cost reduction, and there is only one way to reduce cost: automation. In the past, OEMs How will AV&R utilize new technologies to maximize efficien- were moving production to lower-cost countries but the new per- cy in testing over the life of an aircraft? formance requirements and tolerances make it impossible to carry We will be able to follow the complete life of a part–we digitalize out these processes manually any longer. Even low-cost environ- the surface of the part so we know exactly where the potential ments are now required to automate processes and the amount of defects are. Following a cycle, we will re-inspect the parts dur- investment needed is roughly the same or sometimes higher due ing the maintenance overhaul and compare the surfaces with the to the highly qualified workforce required to operate the system. originals. This will allow us to monitor any deterioration and pre- We are particularly focused on the aircraft engine, surface finish- dict defects over the life of a part. In our extensive database, we ing and surface inspection. The future will center around Industry will then be able to find where all these parts are involved and 4.0, and we believe our position in the market is very strong to will be able to ground only the one plane with a potential defect. facilitate this move: our systems are deployed on the ground, con- Normally, an engine is verified with all tests done on a computer necting all parts, we know the exact variations in process, the type with parts modelled after their initial design. All simulation parts of defects, part profiles, and are able to populate all the software are perfect. We will be able to simulate the real engine, recreating used. We are the chain to connect all the information and central- its real performance. ize it in the cloud. What are AV&R’s main objectives going forward? Québec is also home to a variety of SMEs which lack such high Due to agreements with some key customers, we will be opening levels of investment capital. How great a barrier will cost be some offices outside Canada, initially in France and the United to these smaller companies and can they remain competitive? Kingdom, and potentially in the United States depending on any Automation has long been easily deployed in plants with high changes to NAFTA. However, it is already much more difficult throughput volumes. If a company has only small batches, it is for us to cross the border and send engineers over. Previously, the much more difficult to automate its processes. In aerospace, the United States was a local market for us. volumes are not yet high enough to demand the same levels of Airlines order planes that will be delivered in five to ten years. precision as in automotive production and a greater flexibility is Since AV&R offers solutions to automate the production of these demanded to accommodate a greater variation in the parts. Be- planes’ engines to the motorists, we are currently operating off cause of this, we have invested a lot of money to adapt the system their backlog, which will keep us busy for at least five years. ▬ to accept variations, which brings the possibility of implementa- tion to smaller companies.
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports INTERVIEW
Now operating as Hypertherm's Robotic Drilling and riveting of airframes is gen- Software Team, Robotmaster develops in- erally done using CNC-type dedicated dustrial robot programming technologies machines created around the assembly of that enable versatile and profitable robotic a tubular structure that can only drill and solutions for manufacturing applications. rivet one hole at a time. With the demand for flexibility, OEM’s such as Boeing are Robotmaster was founded in 1996 as moving towards robots. Robots can have Jabez Technologies and acquired by cells of eight or more robots working a Hypertherm in 2015. What were the couple of regions at a time, doubling or motivations behind the acquisition on even quadrupling the speed. Since robots each side? are more complex and not easy to pro- Hypertherm wanted a stake in our technol- gram, there is a technology gap, which is ogy as a Horizon 3 opportunity. As a hard- where we come in. ware company, they had understood that in this new economy it is really the technol- Does the Robotmaster software inte- ogy that will be adding tremendous value grate well with other aspects of Indus- to a complete solution. try 4.0? Chahe Because we had been growing extremely Very much so. We realized that most cur- fast (above 60% per year) there was a lot rent architectures are not suited to what Bakmazjian of operational and administrative work Industry 4.0 entails and offers. Therefore, that needed to be done which was taking in our v7 product design, we looked at the up the majority of my time. Hypertherm principles and tenets of Industry 4.0 to cre- was a match made in heaven due to its ate an architecture that will enable Indus- functional teams behind the scenes of- try 4.0-type behavior. Business Team Leader, Robotmaster fering behind-the-scenes support whilst Industry 4.0 is really about connecting a HYPERTHERM ROBOTIC maintaining independently-run business smart plant. The scope of our vision is not SOFTWARE INC. teams to execute strategy. at a plant level but at a cell level. How- 111 ever, our philosophy is that if a single cell With the launch of Robotmaster v7 on contains suitable attributes required by In- the horizon, how does this software ad- dustry 4.0 and that cell is smart, then that dress the developments in the automa- smart cell will create a smarter factory. tion and robotics landscape? Without smart cells and only connectivity, Robotmaster v7 is a completely rewrit- the factory is connected but not necessarily ten software, not a new version. We real- smart. With regard to IoT, the current trend ized that old architecture is not going to is more towards gathering the data rather do justice to this new economy and took than deciding what to do with it. Our ar- everything we knew and put it to the test. chitecture allows full and real-time access Instead of creating an incremental change, to information as well as any interventions we forecast the use of robots in the future by processing that information. and sought to create an architecture suited to the needs we currently see, at least for What are the next steps for the com- the next five or six years. pany? We will release the new product in 2017. Could you elaborate on the software it- Robots are here to stay. They have their self and its aerospace applications? unique challenges and our goal is to be the There are two areas of operation with very bridge between the user and the robot. We different needs. The first is on the -struc are trying to narrow that gap to enable uti- tural side and the second is on the engine lization to full potential. One area in which and its components. On the engine com- we have a great deal of interest is deep ponent side, we cater to deburring, surface learning and machine learning. Our goal treatments and applications such as plasma is not to keep pushing a snapshot of this or cold splay. On the blade itself, we cater technology; we believe there is a better to grinding, remanufacturing, and so on. business case to keep innovating and make On the fuselage and airframe, the biggest it easier and easier for people to exploit a application we cater to is drilling and riv- robot, which means we will be somewhat eting. Another application would be trim- competing against ourselves as we go for- ming of composite parts. ward. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations INTERVIEW Global Business Reports
Vito tions rather than products and it therefore acquired BuildIT due to its highly configurable and automatable services. The acquisition Marone will increase BuildIT’s capacity to grow due to it giving us more President international reach. We now also have a bigger budget, new devices BUILDIT SOFTWARE and hardware technology that BuildIT can use to help design even & SOLUTIONS LTD. better software.
How accessible is your software to SMEs who are under cost pressure? Could you provide an overview of BuildIT’s main activities? BuildIT understands that improving productivity requires upfront BuildIT delivers 3D metrology solutions for inspection, assembly investment. We therefore start by offering smaller workflow -au and alignment. We automate and simplify workflows through our tomation services. Most SMEs start by purchasing measurement software, enabling employees with little training to conduct very equipment software. From this, they can create their own macros to precise inspections. Our primary customer base comprises large take measurements, which can reduce the time it takes to take mea- aerospace companies such as Airbus, BAE Systems and Bombar- surements from one hour to five minutes. After they have benefitted dier. Our flagship product is the BuildIT platform, which is where from this technology, they can scale up their automation by purchas- the company’s name comes from. ing a more comprehensive package from BuildIT.
In July 2016, BuildIT was acquired by Faro Technologies What are BuildIT’s key goals for the next three to five years? (Faro). How will this affect the focus and scope of the com- BuildIT wants to expand and be known internationally in new mar- pany? kets such as Asia. As part of that goal, we want to expand our auto- Faro is a world leader in computer-aided measurement and imaging mation and configurability capabilities so that BuildIT can regularly devices and software. A key focus for Faro is to offer more solu- deliver projects around the world. ▬ 112
Michael Muldoon tion. Inspect Tracker is an integrated, vision-based system where Director of workers use a simple, handheld pointer. Aerospace Operations Radix also offers custom solutions for end-of-line vision inspection RADIX INC. through the use of collaborative robots.
What advantages can Radix offer its clients? Radix’s tools save clients time and improve process efficiency. For Could you provide an overview of the company’s main activi- example, Inspect Tracker can reduce inspection time by 50% and ties and products? results in more accurate data and ultimately improves the quality of Radix provides software which enables companies to visualize, the products our clients produce. It also improves their own client collect data and provide traceability on a person’s work activities, communication through the data collected by our tools and shared such as inspection, in order to improve their production efficiency. with other systems. We fill a gap in the market for companies that still have people- based tasks but are open to using some automation to improve the What are Radix’s key goals for the future? efficiency of those tasks. Aside from Radix, AIS comprises a mold Radix aims to grow its aerospace division from 10% to 25% of making division and a tooling division. Radix was brought into the company’s business. Québec remains a key are of focus but the group to differentiate AIS in the market place and inject new other regions are more advanced in their manufacturing processes, technology into the company. Two of our main products are Tool such as the United States and some countries in Europe. Québec’s Tracker and Inspect Tracker. Tool Tracker addresses error-proofing government is helping jolt local companies into becoming more needs and provides complete traceability in a manual fastening sta- innovative. ▬
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports THOUGHTS
If Québec wants to keep its place as the third-largest aerospace hub in the world, we need to look at what the industry is demanding today. It is pushing for more automation, innovation, R&D, additive manufacturing, composites and digitalization. This change does not put Québec in jeopardy, but we need to think about how we will survive and keep our place in the new environment. It is a question we need to ask ourselves every day. Québec and Canada have a great R&D ecosystem. We have a strong university network and research centers, but the support needs to be industry-led. As the industry, we are in the best position to identify and address the need.
- Alain Ouellette, Operations Director, GE Aviation
One struggle of Québec companies is automation. It is a priority for the Québec government and they are encouraging companies to invest in automation in order to stay competitive. Our companies are very innovative with new ideas but they need to invest in more efficient processes. Right now, we use a lot of laborers and labor costs come into play for worldwide competition. Automation is one of the keys to making the region more competitive as it will reduce the cost gap with other lower-cost countries.
- Alexandre Faria, 113 VP Business Development, Export Development Canada (EDC)
We welcome these technologies because they are essential. The aerospace supply chain is now international. Therefore, in order to compete, we need to implement automation as much as we can. We are one of the first companies that entered into the Industry 4.0 program and we have several projects. Becoming more automated is essential for us and is definitely the next step considering the challenges around manpower.
- Sylvain Bedard, CEO, Sonaca Montréal
If SMEs do not implement these technologies, they will not survive–labor in Québec is too expensive. Automation reflects a broader shift in the workforce due to technological advancements which are unstoppable. Previously, around 80% of employees worked on the production line and 20% worked in office based jobs; now this ratio is being reversed.
- Guillermo Alonso, President, Alta Precision
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“There are powerful disruptive technologies coming into play such as 3D printing, robotics and more broadly Industry 4.0, which are evolving fast. Companies will have to adapt or be swept aside.ˮ
- André Viau, Portfolio Manager, Aerospace Industry, Fonds de solidarité FTQ EDITORIAL Global Business Reports
Banding “ One of the major trends in the aerospace industry is the Together: democratization of innovation where all companies, including smaller ones, have access to technologies that will Québec’s enable them to create innovative products…SMEs often face challenges in finding financing for their products. They also need to validate their Innovation products quickly so that their limited resources will not go fruitless. In addition, SMEs sometimes do not Ecosystem have the capacity to commercialize their products and need the support of companies like MAYA so that they can focus on product development.
- Marc Lafontaine, Vice President, Maya Simulation Ltd.
Having emerged as the pinnacle of aircraft for Canada; we build them for the 116 Canada’s aerospace industry, it is apparent globe.” that beyond the driving force of the More than 70% of all Canadian aerospace OEMs, Québec’s key to success lies in R&D is carried out in the Greater Montréal its high number of innovative SMEs and area, representing an investment of collaborative approach to innovation. approximately US$700 million a year. Research organizations such as the When it comes to commercial entities, Consortium for Research and Innovation Bombardier is Canada’s top R&D investor, ” in Aerospace in Québec (CRIAQ) and investing more than C$6 billion into around a particular challenge or area the national Consortium for Aerospace R&D over the past 10 years. However, of improvement; CRIAQ is also trying Research and Innovation in Canada significant portion of overall investment to approach program selection more (CARIC) support programs and bridge comes from financial support offered strategically in this way. “Most of gaps between universities, SMEs and by a number of Québec’s associations CRIAQ's projects have been bottom-up larger players. Associations such as Aéro and both the provincial and federal programs creating technology according Montréal and the Aerospace Industries governments. For example, 2016 saw to companies' needs,” explained Denis Association of Canada (AIAC) also seek 21 new collaborative research projects Faubert, president and CEO at CRIAQ. to coordinate the industry and encourage supported by CRIAQ with a total value of “However, we are starting to move collaboration to drive innovation. C$26.9 million. More broadly, CRIAQ has towards incorporating new technology “Canada is first in civil flight simulation, also launched a Digital Aerospace project research into structured programs. We first in small engine production, second to fuel discussion on the convergence want to pursue projects in big fields such in business and regional aircraft of aerospace and digital technology to as advanced manufacturing, clean tech, production and third in overall civil determine R&D needs and translate them and numerical technology, which includes aviation production,” noted Jim Quick, into development priorities over defined artificial intelligence.” AIAC’s president and CEO. “Globally, time frames. In addition to CRIAQ, other Also following this approach is Aéro we are ranked number one in strategic internationally-renowned research bodies Montréal, which launched the Coalition importance to overall manufacturing for include the Institut Nationale d’Optique for Greener Aircraft program, SA2GE our country, number three in terms of (INO), the NRC Aerospace Manufacturing (Smart Affordable Green Aircraft), in R&D intensity, and number five in terms Technology Centre, Defence Research 2011, for example. The program aims to of GDP contribution…We are not like and Development Canada - Valcartier address climate change and compliance other aerospace nations, which often have (DRDC) and the Centre technologique en with new environmental regulations. supply chains that are very focused on aérospatiale (CTA). “Environmental impacts, including their own national needs. We do not build R&D consortiums are typically formed on climate change, are an opportunity
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“ Because our projects do not extend beyond TRL 6, we have been trying to create bridges between our program and ones that can further assist companies, without a gap in support if possible. We are also trying to be more strategic… We are also trying to transform ourselves into something of an R&D brokerage service, offering more research programs than just our own. Even if the CRIAQ program does not fit a company's needs, we want to be able to support them in their application to other programs. Additionally, we have become much more proactive in reaching out to companies in other clusters, such as TechnoMontréal and Prompt. This is important for the future to be able to inject technologies from other networks into aerospace products.
- Denis Faubert, President & CEO, Consortium for Research and Innovation in Aerospace in Quebec (CRIAQ) ” for aviation to play a leadership role,” in Canada and projects with CARIC, commented Suzanne M. Benoît, Aéro CRIAQ and GARDN. “With the support 117 Montréal’s president. “We had great of the Canadian government, we are also success with this initiative, with 27 SMEs, working with the aerospace cluster to five universities and four R&D centers create a consortium with themes related to collaborating. The Québec government advanced manufacturing and digitization,” and private companies contributed C$150 noted Maria Della Posta, senior vice million in five R&D projects. Héroux- president at P&WC. “Additionally, we Devtek, for example, worked on a work with more than 1,300 suppliers in project to launch more environmentally- Canada. In collaboration with the federal friendly surface treatment technologies. government, we have put in place a Advancements of this sort will place them program to help suppliers gain aerospace in a strong position on new generations of accreditation. We derive a lot of value from aircraft with the OEMs.” these collaborations, and we try to give as Aéro Montréal launched phase two of much back to the community as possible.” the program in 2016, with five projects Bombardier, Canada’s largest investor selected. As part of its Québec Aerospace into R&D, also looks to its surrounding Strategy, the Québec Government has ecosystem to drive innovation forward, allocated funding of up to C$65 million for actively participating in almost 20 this second phase of the project, which will collaborative projects with universities, total upwards of C$130 million in public SMEs and other industry players. “These and private funding by 2021. types of projects are crucial to help In many instances, programs are led adapt R&D concepts into commercially by large companies, such as Québec’s viable solutions and to improve our OEMs and Tier 1s. In line with increasing global competitiveness,” commented tendencies to outsource non-core functions Olivier Marcil, vice president, external and looking outwards for specialized relations at Bombardier. “In today’s expertise, larger companies are more and fast-evolving economy, innovation goes more receptive to joining forces with beyond academic collaboration. SMEs external organizations. Pratt & Whitney are creating new innovative technologies Canada (P&WC), for example, has more and collaboration between them and than 23 ongoing university agreements established global companies has become
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations EDITORIAL Global Business Reports
essential to address customer needs. At Bombardier, we are creating opportunities to foster this type of collaboration.” “ Referencing the MACH initiative, If Québec wants to keep its place as the third-largest aerospace hub in the deployed in 2011 under Bombardier’s world, we need to look at what the industry is demanding today. It is pushing mentorship to encourage collaboration between large businesses and SMEs in for more automation, innovation, R&D, additive manufacturing, composites Québec’s aerospace supply chain and and digitalization. This change does not put Québec in jeopardy, but we need thereby increase competitiveness, Marcil to think about how we will survive and keep our place in the new environment. continued: “Today, more than 55 suppliers It is a question we need to ask ourselves every day. Québec and Canada have have been involved in the program and a great R&D ecosystem. We have a strong university network and research more than 600 improvement projects have centers, but the support needs to be industry-led. As the industry, we are in the been completed. This type of collaboration best position to identify and address the need. not only creates value for the industry at large, but also helps us build a world- class supply chain to compete in any - Alain Ouellette, environment.” Operations Director, Alongside contributions to major projects GE Aviation and its own internal R&D, Bombardier also assembled a pan-Canadian consortium and launched Project Horizon, a collaborative project focusing on the development of innovative aircraft technologies. With partners including the Canadian National generally involve less applied research, Varitron is among the top five Electronics” Research Council and five Canadian we maintain our strong involvement with manufacturing services (EMS) corporations universities, the consortium aims to universities,” assured Faubert. “In terms of in Canada, focusing on printed circuit develop advanced electric systems to current funding dynamics, about 35% of board assembly and electronic engineering 118 replace heavier pneumatic and hydraulic the total project value goes to SMEs, about services for a variety of industries. The systems found in some aircraft. Another 30% to universities and about 20% to large company has recently started to investigate area of focus is electronic interfaces that companies.” the potential of printable inks and is also will allow aircraft computers to perform working on a new cooling technology for tasks without pilot input, replacing electronics. conventional mechanical flight controls. Towards the end of 2016, the Honorable Whilst it is often a natural fit for the industry Government support and financing Navdeep Bains, Minister of Innovation, giants to take the reins on collaborative Science and Economic Development for projects, there are of course exceptions to Whilst some companies have large R&D the federal government, announced an the leadership model. For example, phase budgets and the available resources to investment of up to C$54 million in a two of the SA2GE program, in which launch large projects, others require consortium of 15 Canadian companies Bombardier is also involved, is in fact led external support such as that offered and academic institutions for cutting- by SME Teraxion. by CRIAQ and the government. On edge electrical systems and advanced More generally, well established the subject of government support of aerodynamic systems. This funding companies are increasingly looking to innovation, Michel Farley, president will be delivered under the Technology universities and startups as a source of and CEO of Varitron Technologies, Demonstration Program, which supports breakthrough technologies and proprietary commented: They have done a lot to help collaborative research and early stage processes. A key challenge within the industry, including through funding to spur projects. The consortium will be led by innovation ecosystem is therefore the innovation in manufacturing processes and Bombardier, with other Québec-based commercialization of this research to to help companies export. Investissement partners including Thales, Liebherr, OPAL- capture value addition rather than passing Québec has a stake of approximately RT, McGill University and Polytechnique the program on at a low technology 28% in Varitron and funding from the Montréal. readiness level (TRL). CRIAQ is very government will help the company market Québec’s aerospace industry is a prime much focused on this evolution from itself in the United States and secure more example of the benefits of collaboration applied research with a low TRL to business there. Other companies in Québec in driving innovation. By financially mid-TRL demonstration programs. In should also use this funding to jump start supporting the breakthrough innovation conjunction with CARIC, CRIAQ now their innovation and export strategies, stemming from smaller companies and funds the work of companies as well as something which is especially important universities in particular, the government universities. “Although there has been as some owners of SMEs are unwilling will ensure that the industry remains at some concern over losing university to invest their own resources as they are the cutting-edge of technology into the involvement because higher TRLs nearing retirement.” future. ▬
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports EDITORIAL
Innovation in Canada (CARIC), we can their costs and we at least match it. The now fund the work of companies as well maximum stacking limit of government as universities. Although there has been programs in a project is 75% and, by com- some concern over losing university in- bining various sources, we can reach that volvement because higher TRLs generally amount in some cases. The IP is defined involve less applied research, we maintain in the funding agreement at the start of the our strong involvement with universities. project. In terms of current funding dynamics, about 35% of the total project value goes There is a gap between universities and to SMEs, about 30% to universities and industry when it comes to training. Is about 20% to large companies. supporting students in gaining practical Because our projects do not extend be- experience an area of focus for CRIAQ? yond TRL 6, we have been trying to create We seek to bridge this gap in two ways. bridges between our program and ones that Firstly, we work a lot with our partner, can further assist companies, without a gap Mitacs Canada. Mitacs funds internships in support if possible. We are also trying so, where possible, we try to incorporate Denis to be more strategic. Most of CRIAQ's this option into our projects to take stu- projects have been bottom-up programs dents from laboratories to the industry. Faubert creating technology according to compa- Secondly, we work with McGill Univer- nies' needs. However, we are starting to sity on its AeroCREATE program, which move towards incorporating new technol- seeks to complement students' curriculum ogy research into structured programs. We with work or studies in IP subject matter. want to pursue projects in big fields such 80% of McGill’s internships occur through President & CEO as advanced manufacturing, clean tech, CRIAQ projects. CONSORTIUM FOR and numerical technology, which includes RESEARCH AND INNOVATION artificial intelligence. We are also trying How do you expect CRIAQ’s role in 119 IN AEROSPACE IN QUEBEC to transform ourselves into something of Quebec’s ecosystem to evolve over the (CRIAQ) an R&D brokerage service, offering more coming years? research programs than just our own. Our core mission is to build Québec's re- Even if the CRIAQ program does not fit search network system through a more a company's needs, we want to be able to strategic orientation; growing our net- support them in their application to other work internationally, increasing visibil- programs. Additionally, we have become ity of SMEs and increasing collaboration much more proactive in reaching out to with other communities. Over the next companies in other clusters, such as Tech- five years, we want to at least double the noMontréal and Prompt. This is important international component of our programs for the future to be able to inject technolo- to about 25% and would like 25% of our gies from other networks into aerospace programs to be top-down as opposed to products. bottom-up. We also want 20% of our pro- grams to be led by SMEs, which we should Historically, there has been a lack of achieve more quickly. We are monitoring willingness to collaborate with potential these targets and are making good progress competitors. Is this attitude now chang- so far. This year is CRIAQ's 15th anniversary. ing? CARIC, with the support of CRIAQ, is also What are the updates since we met in There is no lack of good will from anyone. leading an industry-driven proposal (Proj- 2015? However, it is much easier to have com- ect MOST21) in the Superclusters com- Since 2015, the nature of CRIAQ’s pro- petitors work together in a pre-competitive petition that will encompass aerospace, grams has evolved from applied research environment, for TRL 3 and below. Be- ground mobility, advanced manufacturing with a low technolgy readiness level yond TRL 4, when getting closer to com- and numerical technology. Similarly, we (TRL) to mid-TRL demonstration pro- mercial products, there is more vertical hope the findings of the Numerical Aero- grams. Before 2014, all CRIAQ projects collaboration between the OEM and its space study will result in the structuring of were focused on TRL 2, 3 and 4–early supply chain. a program at CRIAQ for numerical tech- stages in the innovation cycle. Since 2014, nology. This is the most important new two-thirds of CRIAQ projects in Québec Could you elaborate on the general development for us to plan for in order to are TRL 4, 5, and 6. With the national funding model for CRIAQ's projects? stay ahead of the curve and exploit these Consortium for Aerospace Research and The industry partner generally covers technologies commercially. ▬
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Innovation finds new roots
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Image courtesy of Concordia University
Many of Québec’s universities have longstanding relationships with industry. As the aerospace industry demands more practical expe- rience from recent graduates, internships and co-op programs are “ viewed as essential tools to properly prepare students for their first Our industry is very well supported by research and jobs. More recently, however, the industry has also acknowledged academic institutes across the country, and the role they universities to be valuable partners in early-stage R&D and a pri- play will continue increasing. We now have more tools mary source of breakthrough innovation. University spin-offs are increasingly finding success, in high- de involving research institutions and universities, such as mand due to their possession of a specialized capability or first-in- the CARIC and GARDN networks, and a higher degree class technology, and the universities themselves are increasing their of interface between industry and academia than we have capabilities for higher technology readiness levels (TRLs) to capture ever had before. These new and stronger relationships more value. By playing a more integral role in the later-stage devel- should lead to increased exports, commercialization, and opment of technologies, they are better able to play a significant role growth in the industry. on research platforms alongside commercial entities. Particularly developed along these lines is Sherbrooke University. “We are what we can call an "integrated chain of innovation”,” com- - Jim Quick, mented Richard Arès, associate Dean of engineering & general man- President & CEO, ager of the university’s Interdisciplinary Institute for Technological AIAC Innovation (3IT). “In the world of electronics, robotics and informa- tion technology, we cover the whole chain of TRL 1 to 9. Therefore, we can be partners with industry from the very early work all the way to market.”
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports” Global Business Reports EDITORIAL
Equally notable are the large number of startup companies born out of the university’s research. “In terms of entrepreneurship, the University of Sherbrooke has the highest number of spin-offs by “ far,” highlighted Arès. “We have a company-creation accelerator (ACET), an organization dedicated to helping startups launch, prog- Contributing to the economy of the province is of prime ress faster and have a bigger chance of success through funding, net- importance for Concordia. A key element of this is the working, coaching and training. For some time, the Québec ecosys- availability of highly qualified personnel (HQP), which the tem created about a dozen companies a year. This organization has created more than 70 companies in the last four years, entering the university helps provide. Without doubt, Québec has the leagues of spin-off universities like Ryerson University and UBC.” strongest aerospace engineering talent pool in Canada, Sherbrooke University’s target is to multiply its level of partnerships perhaps even globally. Concordia is proud to contribute to with industry by 10. the province’s niche in aerospace.
Funding and support - Amir Asif, As well as securing more practical experience for students to work Dean, on ‘real world’ solutions, by securing closer ties with surrounding Faculty of Engineering and companies universities also benefit from greater access to funding. Computer Science, By positioning themselves as partners to industry, universities are Concordia University more likely to have the visibility to partake in externally-funded re- search programs, even if the funding is not provided by industry. “Industry contributes a relatively small amount to funding for re- search, with government-funded research bodies typically providing around 80% of the funding,” said Louis Laberge Lebel, assistant professor at Polytechnique Montréal’s Department of Mechanical Engineering. “Companies are usually focused on short-term cost ” 121 savings, meaning the scope of research is quite narrow. It would be beneficial if companies were more open to partnering with universi- ties on fundamental research that could lead to the next big techno- logical advances.” As well as working for more than 10 years on a large project with Safran towards the goal of making parts for the LEAP-X engine, Polytechnique Montréal was also involved in the production of a fire-resistant carbon fiber composite by-pass duct for aircraft- en gines with P&WC. The university is also working on several proj- ects with CRIAQ, CARIC and NSERC. ▬ “ There are probably three times as many projects with industry compared to 10 years ago. However, civil aviation companies have limited resources to fund research and therefore we will likely continue to rely on government funding for projects we are involved in.
- Prof. Aouni Lakis, Director, Aerospace Innovation and Design Institute (IICAP), Polytechnique Montréal
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ÉTS is focused on engineering across a va- collaboration between industry and univer- riety of industries. How has the university sities is now extremely strong. The result is developed, and what are the key focus ar- near self-sufficiency when it comes to talent. eas in terms of its student offering? Equally, there is a lot of movement and ro- Aerospace is the number one area at ÉTS. Of tation between companies, even in manage- 170 professors, we have close to 56 profes- ment positions. Canada will need 10,000 sors across different departments working in aerospace engineers over the next 10 years, aerospace, so almost one third of our work- so the demand for talent will continue to be force. AÉROÉTS is a community within strong. ÉTS, rather than a distinct department, and spans the various departments, such as me- In 2015, you noted that fuel consumption chanical engineering, electrical engineering has been a great area of focus for ÉTS. and computer science. Within aerospace, As travel and by extension emissions in- ÉTS’ main strength is manufacturing and crease, how is this area developing? material – we have a large critical mass The key topic of the moment is the environ- of professors in this area. The second core ment. Projections for new aircraft over the strength is avionics, which includes controls, next 10 years sit at 2,000 per year. With drones and navigation. Nevertheless, we also additional aircraft and flights comes an in- Dr. Hany have extensive expertise across other areas creasing challenge around the environment, including emissions, design optimization, emissions and noise pollution. Preference Moustapha simulation, fluid dynamics, and so on. We for blended wing body (BWB) aircraft is cover all research areas. increasing. Electric and hybrid propulsion is We are the only university in Canada that another popular area of research and devel- only hires professors with industrial expe- opment. rience. Cumulatively, our 56 professors in- Professor and Director, AÉROÉTS, volved in aerospace have about 350 years’ Are there any particularly notable proj- P&WC Chair in Propulsion System, practical industry experience. ÉTS is number ects in which ÉTS is involved? 122 ÉCOLE DE TECHNOLOGIE one in Canada in terms of graduating engi- We are working on a very big project with SUPÉRIEURE (ÉTS) neers, graduating between 750 and 800 engi- Siemens, which is a total enterprise Industry and Senior Research Fellow neers per year. All of our students come from 4.0 integrated R&D program and involves PRATT & WHITNEY CANADA a technical college, so they are very hands- other universities working together as a (P&WC) on. ÉTS has approximately 10,000 students, consortium. We have a 25-year partnership including 8,000 at undergraduate level and with McGill and often collaborate with other 2,000 at graduate level, and of those, 3,000 universities on large-scale contracts such as are yearly co-op students. In aerospace, we this one. have more than 500 co-op students per year, There is also the Center for Aerospace Pro- which amounts to more than the rest of the fessional Education (CAPE), a partnership aerospace co-op students at Canadian uni- with McGill, which is the only professional versities combined. education body for aerospace in Canada, and the second in North America alongside Kan- ÉTS has very strong industry links, plac- sas University. We also have the Montreal ing more than 3,000 interns at compa- Aerospace Institute (MAI), a combination of nies every year and conducting 70% of six Québec universities. research activities in collaboration with industry. Could you elaborate on this re- What are the objectives for ÉTS going lationship? forward with regard to aerospace? The Canadian average for the percentage of research conducted by engineering faculties The Siemens contract will be a big area of in collaboration with industry is 25%, so focus for us because it involves so many our activities sit at almost triple the average. players and so many parties within ÉTS, in- The relationship is extremely strong, and we cluding both professors and students. There have partnerships with between 50 and 60 of are also many opportunities within Industry the 250 aerospace companies in Québec, in 4.0, or “Aerospace 4.0”. A key challenge is addition to international companies. to demystify these concepts, for which we are offering short courses and presentations How strong is Québec’s talent pool? at ÉTS. Industry 4.0 encompasses entire pro- We have no shortage of talent, although it cesses and we will therefore need to develop was an issue some 15 to 20 years ago. The these capabilities within the workforce. ▬
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Amir Asif & Isabelle Dostaler
AA: Dean, Faculty of Engineering and Computer Science ID: Professor, Management, John Molson School of Business AA ID CONCORDIA UNIVERSITY
Concordia University is a public university focuses on developing the “right” skills so tion in the province. located in Montéal, offering a bachelor’s graduates can contribute from day one of and master’s program in aerospace engi- their placements. An innovative feature of Concordia boasts a wealth of research neering. The John Molson School of Busi- the program is an apprenticeship component collaborations with industry. Could you ness is the university’s business school. that places students in different departments describe any particularly interesting re- of the same company over four years of their search projects? How important is aerospace teaching and studies. The industry is contributing finan- AA: We are working on NSERC funded research to Concordia? cially toward the apprenticeship program, projects that address industry needs. Within AA: Since Montreal is a major hub for aero- which is also supported through an NSERC aerospace engineering, the research includes space engineering research and develop- Chair in Aerospace Design Engineering avionics, instrumentation and control, com- ment activities, aerospace has always been (NCADE) whose role it is to incorporate en- bustion and propulsion, materials and struc- important to Concordia and we continue to gineering design and hands-on practical ex- tures, surface engineering, renewable energy 123 strengthen our expertise and links with the perience for our students. as well as aerospace design and simulation. industry. For many years we have offered We collaborate with the industry on research a professional master’s degree program in How are you preparing students for In- into aerospace robotics and have ongoing aerospace engineering and an aerospace dustry 4.0? research in collaboration with the industry specialization within the undergraduate me- AA: A key part of Industry 4.0 is cyber-phys- on integration advanced electromagnetics in chanical engineering program. We have al- ical system technology that connects objects aerospace design. Underpinning these proj- ways had close ties with major aerospace from physical and virtual worlds through an ects is the fact that Concordia has a very pro- companies such as Bombardier, Pratt & “internet-of-things” framework. Both cyber- gressive intellectual property (IP) policy that Whitney Canada, Bell Helicopter, Siemens physical systems and internet-of-things are encourages both researchers and industry to (Rolls Royce), and a number of SMEs. active research areas in the faculty. Concor- invest time and money into projects. dia has a strong background in associated How does Concordia facilitate student fields, including virtual reality, communica- What are your key objectives for the next participation in the industry? tion networks, artificial intelligence, data an- five years with regard to aerospace? AA: Concordia offers three main ways for alytics and systems software, and was one of AA: The faculty has just developed its stra- its students to contribute: the co-op program, the first universities to offer an undergradu- tegic plan. We aspire to be one of the top en- internships and apprenticeships. Since the ate degree in software engineering. gineering schools in Canada. As part of this, establishment of Concordia’s Institute of we want to foster niches in strategic areas Aerospace Design & Innovation (CIADI) in The business school launched an aviation such as aerospace engineering and to con- 2002, the university has placed about 1500 think tank in September 2016. Could you tinue to develop academic and research pro- undergraduate students on internships in the elaborate on its purpose? grams in next generation technologies work- aerospace industry. About 500 of these stu- ID: The think tank serves as a neutral plat- ing directly with industry. dents are working as full time employees form for industry professionals and research- ID: In line with the university’s core values, with the companies where they worked as ers to focus on a deeper, more nuanced un- we want to embrace the world through aero- interns. Over the years, the feedback from derstanding of the aviation sector. The space and for Montréal to be the world’s top the industry has been that, while they value impetus for it came from the former CEO of aerospace hub. With regards to the aviation the program, it takes too long to train gradu- Air Canada and IATA, Pierre Jean Jeanniot, think tank, our immediate objective is to se- ates to be productive in the workplace. In who is the chairman of our advisory board. cure more input and financial support from consultation with aerospace industry, Con- Major projects so far include a large research the industry in order to conduct research that cordia therefore launched the BEng in Aero- contract from the Québec government to de- will help design sound aviation policy and space Engineering in 2016. The curriculum velop a strategy for air regional transporta- business practice. ▬
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Engineering) program, which offers paid opportunities for under- Stephen graduates to work as researchers for professors in the summer months. In addition, the MIAE administers the CREATE pro- gram, which prepares graduate students, selected from the afore- Yue mentioned aerospace institutes, for entry into the industry through Lorne Trottier Chair in industry oriented training programs. Aerospace Engineering and Director MCGILL INSTITUTE FOR Strong R&D programs are crucial to the future of Québec’s AEROSPACE ENGINEERING, aerospace industry. What key research initiatives in aero- space engineering is the university involved with? MCGILL UNIVERSITY If a company has a research program they want to lead, we en- courage them to partner with our professors. For example, Pro- fessors Nadarajah and Hubert work closely with Bombardier on many projects, and McGill is involved in many CRIAQ (Con- Could you give an overview of McGill’s Institute for Aero- sortium de Recherche et D'innovation en Aérospatiale au Que- space Engineering (MIAE)? bec) projects. There is also an emerging large scale effort with The institute was formed in 2010 to support student access to in- an OEM partnering with McGill, ETS and Concordia, focusing ternships generated by the Montreal Aerospace Institute (MAI), on manufacturing. which is made up of the main aerospace companies, plus the vari- ous institutes at McGill, ÉTS, Concordia, Sherbrooke, Laval and How does McGill position itself to attract the best students? École Polytechnique de Montréal. McGill has about 300 under- Most students come to McGill because of its reputation. McGill graduates available for these internships and gets around 70 to 80 does not offer an aerospace specific degree program, but the for internships a year. By bringing together the aerospace engineering students who are aerospace focused, the MIAE provides excellent professors, the institute is also a way for industry to have greater access to the aerospace industry. McGill is also establishing a visibility on the different McGill research themes, and vice versa. faculty-wide aerospace minor so that students of all engineering The MIAE also funds students to participate in the McGill En- disciplines can have an aerospace orientation within their major gineering Faculty SURE (Summer Undergraduate Research in engineering degree program. ▬ 124
Prof. Aouni Lakis & Wissem In what ways does Polytechnique ensure that students have AL access to practical experience with industry? AL: We have established relationships with Bombardier, Pratt & Maazoun Whitney Canada (P&WC), Bell Helicopter, Siemens, CAE, Saf- ran, GE Aviation and many other companies. As part of the NSERC CREATE program, for example, select PhD students complete a four- to eight-month internship in industry and receive training on AL: Director, Aerospace Innovation soft skills by aerospace companies. In addition, IICAP works as a and Design Institute (IICAP) conduit between students and the industry by finding suitable intern- WM: Business development specialist ship opportunities for undergraduate, masters and PhD students. MITACS & WM: Alongside IICAP, Mitacs works with Polytechnique and other WM POLYTECHNIQUE MONTRÉAL universities as a ‘human bridge’ between industry and universities. Masters, PhD students, and postdocs obtain internships through this organization and focus on research that addresses problems compa- To what extent does the university cater to aerospace? nies are trying to solve. AL: Polytechnique provides a joint Masters in Aerospace Engineer- ing with six engineering faculties at different universities in Québec, What are the key objectives for the university in developing its including McGill, Concordia, Sherbrooke, ÉTS and Laval. As part of industry ties over the next few years? the degree, each student is required to complete two internships with WM: We are in a position in which there is very good collaboration the industry and engineers from the sector provide courses which fo- between industry and the university. Professors are open to doing cus on industrial applications of engineering theory. The program is more joint research projects and a key goal of ours is to deepen col- extremely popular, with around 80 students every year. laboration with industry. ▬
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The University of Sherbrooke hosts over solutions. The industrial partner can then 40,701 students. Could you briefly intro- choose a preferred solution, after which duce the university and its main areas of they can engage with the researchers and Serge academic focus? fund the program. SB: We have eight faculties: Administra- There can also be a great deal of friction Beaudoin & tion, Education, Engineering, Law, Letters between industry and universities over IP and Humanities, Medicine and Health Sci- during collaborations, which can reduce ences, Science, and Sports and Physical the efficiency of the project as both- par Richard Education. University of Sherbrooke is ties are afraid of losing the IP or control. characterized by its co-op teaching. We We are experimenting with a new model Arès have 45 programs where students are alter- which focuses on transferring the IP to the nating study sessions with paid internships commercial actor as quickly and seamless- ("stages") in the workplace to complement ly as possible. Since 90% of our ecosystem the knowledge developed at the university deals with very small companies, financial SB: Business Partnerships Director with a practical work experience. transfer is complicated due to lack of capi- RA: Associate Dean of Engineering & In research, we are striving to create and tal. We are therefore exploring other ways General Manager of 3IT deliver value thoughout the research for IP to be paid back in order to secure UNIVERSITY OF SHERBROOKE journey, not only at the end. With 1,400 return for the academics. researchers, six institutes, 35 research SB: Sherbrooke University's IP culture centers, and 71 research chairs, our first is very open. We are recognized as being priority when partnering with companies very easy to deal with. is training our students in real environ- Talking about collaboration with the in- ments. dustry, if you are aware of the MITACS In engineering, we mostly teach our stu- program, in which students work at the dents through projects in which they com- partner’s facility 50% of the time and bine course sessions with a separate work- spend 50% of the internship at the uni- ing environment session. These internships versity, according to MITACS 2016-2017 bring us closer to our industry partners. activity report, Sherbrooke is number-one 125 RA: We were the first francophone -uni in the number of Accelerate internship in versity and the second university in North Québec and second in Canada. America to put this type of training togeth- er. Every year, we have 4,500 work terms Could you provide a specific example of SB to find with over 1,000 different- com a research project currently underway? panies. We have developed and become SB: One of our researchers, Pr Patrice recognized for our project- and problem- Masson, is currently undertaking a mecha- based learning, which is applied across tronics project on the continuous monitor- Education, Medicine and Engineering. As ing of aircraft structures using ultrasound. soon as our students begin university, they By distributing sensors throughout the are immediately put into practical situa- structure of a plane, real-time data on the tions where they must solve problems. A aircraft structure can be produced. We also good example of an aeronautical project have very good young researchers work- conducted by our students would define- ing on drones with industrial and govern- tely be the Epervier acrobatic plane. This mental partners. In smaller companies, plane was entirely designed and built by students can create something completely our engineering bachelor students and it is new; companies are often dependent on now part of the Canada Aviation and Space the expertise we transfer to them. Museum exhibit. What are the objectives of the university
RA Sherbrooke also collaborates with other over the next few years? research institutions. Could you elabo- SB: Our strategy revolves around innova- rate on some of the models you work tion, partnerships and entrepreneurship. with? Our target is to multiply the level of part- RA: We developed a specific vision of how nerships we have with the industry by 10. to collaborate with industry. The first im- We plan to achieve this by assessing part- portant aspect is IP. We proposed "crowd- ners' needs, finding the expertise, match- researching", where the industry can post ing them up with the right research team, problems or challenges on Web platforms and following the partnership relation to and researchers can bid on and propose maximize the impact of a project. ▬
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“Over the last 15 years, the industry has greatly matured, particularly in terms of collaboration. The result is near self-sufficiency when it comes to talent. Equally, there is a lot of movement and rotation between companies, even in management positions. Canada will need 10,000 aerospace engineers over the next 10 years, so the demand for talent will continue to be strong.ˮ
- Dr. Hany Moustapha, Professor and Director, AÉROÉTS, P&WC Chair in Propulsion System, École de technologie supérieure (ÉTS) and Senior Research Fellow, Pratt & Whitney Canada (P&WC) EDITORIAL Global Business Reports
Developing the Talent Pool: Keeping up with Demand
The quality of Québec’s workforce is cited by many as one of the region’s key advantages. Prominent universities include the École de technologie supérieure (ÉTS), Concordia, McGill, the 128 Polytechnique de Montréal and Sherbrooke. As many industry leaders and skilled workers reach retirement, however, there is extremely high demand on the talent pool. Meanwhile, with the uptake in Industry 4.0 technologies and new processes, the nature of many jobs is changing, calling for additional training of exist- ing employees to facilitate the transition. According to the Comité sectoriel de main d’oeuvre en aérospa- tiale du Québec (CAMAQ), the Québec Aerospace Workforce Sector Committee, the region will need 10,000 new aerospace employees over the next 10 years and a further 23,000 to replace workers leaving the workforce. “21 years out of the last 30 saw a growth in aerospace manpower needs,” said Nathalie Paré, Exec- utive Director, Comité sectoriel de main d’oeuvre en aérospatiale du Québec (CAMAQ). “Overall, manpower needs have grown by 2.13% annually over these thirty years. Extrapolating from this for the next 10 years, Québec needs 10,000 new aerospace em- ployees and 23,000 to replace workers leaving the workforce.” CAMAQ’s mission is to ensure the aerospace industry has the right quantity and quality of manpower and to make sure that the training system is responsive to the needs of industry. With a large number of qualified technicians and engineers retir- ing, demand for talent is strong but attracting new students to the industry can be challenging. “Companies are struggling to find the right talent and sometimes have to search internationally for it,” said Jean Wilhelmy, senior vice president for aerospace, con- struction, services and transportation at Fonds de solidarité FTQ. “There are not enough younger people pursuing the technical skills needed by the industry.” Meanwhile, companies are increasingly demanding more practi- cal experience from potential new recruits. Universities are there- fore having to adapt their models to prepare students for the in- Image courtesy of Concordia University
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports EDITORIAL
“ The Montréal aerospace cluster is one of the world’s three major aerospace centers, along with Seattle and Toulouse. This gives us access to an excellent pool of skilled labor generated by the extensive infrastructure of Québec universities, collaborative research centers, aerospace educational institutions, government support programs, as well as a wide range of local suppliers and service providers that target the real needs of the aerospace industry.
- Denis Giangi, President, Rolls-Royce Canada
” dustry. “Traditionally, education was the province of universities from the industry because it allows them to properly coach new and industry took over the training of these educated students,” graduates at a lower cost.” stated Professor Stephen Yue, Lorne Trottier Chair in Aerospace Universities have also become more proactive in fostering indus- Engineering and director at McGill Institute for Aerospace En- try relationships themselves to secure more practical experience 129 gineering, McGill University. “However, industry now desires for students. Sherbrooke University, for example, is recognized that the university increases its role in the development of what is for its co-op teaching and boasts 1,400 researchers, six institutes, currently termed ‘graduate attributes’, which includes things like 34 research centers and 50 to 60 additional research groups. “Ev- soft skills, as well as training in industry-specific tools, such as ery year, we have 4,500 work terms to find with over 1,000 differ- specific software.” ent companies,” noted Richard Ares, associate Dean of Engineer- Organizations such as CAMAQ aim to bridge this gap. CRIAQ, ing and general manager of 3IT at the University of Sherbrooke. for example, works a great deal with Mitacs Canada, which funds “As soon as our students begin university, they are immediately internships, and also works with McGill on its AeroCREATE pro- put into practical situations where they must solve problems. We gram, which seeks to complement students’ curriculum with work are leaders in applying these programs to Engineering and our or studies in IP subject matter. CRIAQ also recently formed an al- projects are much more ambitious than any other Engineering liance with the Canadian Aeronautics and Space Institute (CASI) projects in other universities across North America.” to publicize its work, give students visibility and allow them to Sherbrooke University is particularly well regarded by industry interact with the industrial community. for its open IP culture and entrepreneurial environment. The aca- The advantages of close industry ties extend well beyond student demic institution has created more than 70 spin-off companies in benefits, attracting financial support for university research pro- the last four years and its Interdisciplinary Institute For Techno- grams and providing breakthrough innovation and early-stage de- logical Innovation (3IT) accelerates technology transfer in sev- velopment capabilities to companies. Organizations such as the eral sectors, covering technology readiness level (TRL) 1 through Montréal Aerospace Institute (MAI) and the Comité sectoriel de TRL 9. main d’oeuvre en aérospatiale du Québec (CAMAQ) seek to de- Many of Québec’s universities also work with Mitacs, a national, velop talent at the university level and support training in the form not-for-profit organization founded in 1999 to design and deliver of internships and other initiatives. research and training programs in Canada. Over the past 15 years, For example, CAMAQ’s ‘Your 1st Job in Aerospace’ initiative en- Mitacs has supported more than 10,000 research internships and courages businesses to provide training to new graduates through trained more than 19,000 students. Montréal is also home to the financial supplements. “Businesses need to provide training on Center for Aerospace Professional Education (CAPE), a partner- their specific requirements to new graduates, which can lead to ship between McGill and ÉTS, which is the only professional lost production time for them as they have to devote limited re- education body for aerospace in Canada, and the second in North sources to training,” explained Paré. “The Canadian government America alongside Kansas University. therefore provided C$4.2 million for the three-year program and There is also the Center for Aerospace Professional Education CAMAQ finances 50% of participating companies’ salary costs (CAPE), a partnership between ÉTS and McGill and the only pro- of the new graduates. CAMAQ has received very good feedback fessional education body for aerospace in Canada, and the second
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Image courtesy of CAE
130
in North America alongside Kansas University. In addition, six Québec universities have combined to form the Montréal Aero- “ space Institute (MAI), created to address the aerospace industry’s future needs for engineering highly qualified personnel (HQP).
The ecosystem is strong but we are all competing for Virtual training manpower. Whilst the academic programs are fantastic, the challenge lies in attracting people into these programs, Particularly when it comes to pilot training, simulated environ- especially women. There are not enough students graduating ments are an essential tool and training systems are currently in to meet current market demand. Those that apply to school high demand. AIATA forecasts indicate a growth in passenger often obtain job offers before they finish their programs. trips by more than 4% annually over the next 10 years; the com- mercial aviation industry is therefore set to double over the next 20 years. At Paris Air Show, CAE unveiled its first CAE Airline Pilot Demand Outlook, which forecast the need for 255,000 new airline pilots over the next 10 years, further highlighting that 50% - Sylvain Bedard, of those set to fly the world’s commercial aircraft in 10 years have CEO, not yet started to train. Sonaca Montréal CAE is a global leader in training for the civil aviation and works with over 300 airlines, training more than 120,000 pilots annu- ally at every career phase. The company plans to meet this rising demand for new and innovative pilot career pathways and train- ing systems. “CAE’s secret sauce has always been its culture of innovation,” highlighted Marc Parent, CAE’s president and CEO. “We have invested more than C$1.3 billion in R&D over the past 10 years and we continue to invest heavily today–not only in de- veloping the latest technologies but also in our training differen- tiators: instructors, courseware, products and processes. One of
Industry Explorations QUÉBEC” AEROSPACE 2017 Global Business Reports Global Business Reports EDITORIAL
131 the key elements will be how we leverage existing technologies and big data to create training programs that are tailored to the specific needs of each pilot. We call that adaptive training. If the “ data shows that the pilot has problems in landing with crosswinds, for example, the training program will focus on this aspect until it is mastered.” Over the years, CAE has helped create the standards that are the Particularly in Montréal, we have close relationships with basis of pilot training today and will likely continue to shape the universities such as Concordia and McGill for occasional future of training. Presagis, a division of CAE, specializes in vir- research programs and internships. We make extensive use tual reality, artificial intelligence and human-machine software of these connections to help students get real-world work solutions for aerospace and defense. “Presagis has three core ar- experience. We primarily provide the training tools for eas of critical expertise,” noted Jean-Michel Brière, general man- companies to train their staff. However, nearly two years ager at Presagis. “The first is virtual reality; we can create a vir- ago, Adacel was awarded part of a contract to provide air tual environment for almost any customer. The second is artificial traffic control instructors that train controllers in the FAA. intelligence–our systems that allow the creation of life in virtual We have about 47 employees in the field using our simulator environments. The third is human-machine interface. Drawing on equipment to train air traffic control students. these areas of expertise, we sell support to help customers create the next generation of systems. For example, we have developed touch in our tools for the cockpit, and customers are using our system to create the next generation of cockpit display systems. - Gary Pearson, We also regularly work with real-time avionic systems. Despite CEO, our size, we are recognized in the industry as being experts in Adacel our fields.” One of Presagis’ branches assimilates the virtual training environ- ment into a real cockpit platform to bring simulation into aircraft, removing the cost incurred by having all aircraft flying at the same time during training. Virtual training for missions elsewhere in the world also increases safety and security. ▬
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations” INTERVIEW Global Business Reports
Nathalie Paré
Executive Director COMITÉ SECTORIEL DE MAIN D’OEUVRE EN AÉROSPATIALE DU QUÉBEC (CAMAQ)
What are CAMAQ’s core mission and workers. CAMAQ also enquires after re- you favor to help students be more pre- main activities? cruitment challenges and particular train- pared when entering the industry? CAMAQ’s mission is to make sure the ing requirements; for example, if they need By working closely with both industry and aerospace industry has the right quantity more mechanical engineers as opposed to schools, CAMAQ helps ensure students are and quality of manpower and to make sure computer engineers. In addition, CAMAQ industry ready. The good thing is that indus- that the training system is responsive to the collects data on how many new graduates try and educational institutes are very well needs of industry. Every year, CAMAQ con- are required versus experienced hires. Usu- integrated. However, companies sometimes ducts a survey of companies’ needs and then ally it is about 50:50. Using this data, each have to devote limited resources to train- collaborates with schools to make sure they year CAMAQ makes recommendations to ing which can lead to lost production time. are meeting those needs. CAMAQ works schools to make sure they are graduating That is why in May 2016 we launched the 132 closely with the Montréal Aerospace Trades enough of the right types of students. program ‘Your 1st job in Aerospace’ to help School (École des métiers de l’aérospatiale companies provide training on their specific de Montréal) and the National Aerospace What particular skills are employers de- requirements to new graduates and to help School (École national d’aérotechnique), manding from candidates? 200 new graduates get their first experience both technical trade schools. CAMAQ also Generally, they want their workforce to be in aerospace. The Canadian government coordinates a joint master’s program in col- more versatile. For example, they must be therefore provided C$4.2 million for the laboration with McGill, Concordia, ÉTS, able to do some crafting, some robotics and three year program and CAMAQ finances Polytechnique, Laval and Sherbrooke. some analysis. Employees need to know 50% of participating companies’ salary what is happening before and after their role costs of the new graduates. CAMAQ has re- What key trends you have observed in the production process. Business is also ceived very good feedback from the indus- through your annual surveys? transitioning to Industry 4.0, for which labor try on this initiative because it allows them 21 years out of the last 30 saw a growth in competency needs are still not well defined. to properly coach new graduates at a lower aerospace manpower needs. Overall, man- CAMAQ is working to help define these cost. In addition, the students get the experi- power needs have grown by 2.13% annu- and to help schools better prepare students. ence they need to acquire their first job in ally over these thirty years. Extrapolating Soft skills like analysis, comprehension and aerospace. from this for the next 10 years, Québec teamwork are also more in demand and crit- needs 10,000 new aerospace employees and ical. What are the key goals for CAMAQ in 23,000 to replace workers leaving the work- the next three to five years? force. Do you see Industry 4.0 as a threat to the CAMAQ is launching a detailed interactive workforce or something which will help map showing all the different stakehold- Can Québec’s educational infrastructure it advance? ers involved in training in Québec, which as it currently stands cope with this de- The effects will not be less manpower, but we are very excited about. CAMAQ is also mand? a different kind of manpower. Rather than working on an initiative to keep seniors in In short, yes. Because the industry and ed- robots replacing humans, employees will the industry for longer. Next year, CAMAQ ucational institutes are so well integrated, need to learn new skills to work with these is launching its recommendations on new schools are very adaptive to demand. Our machines. Industry 4.0 will therefore help competencies that are required for labor to survey forecasts labor needs for the next workers to achieve more. adapt to Industry 4.0. CAMAQ’s main focus one to three years and has a 95% to 98% will be to continue to help define the man- response rate. We provide data on indus- Companies are demanding that gradu- power needs of the aerospace industry and try needs for scientific workers, techni- ates have more industry experience be- to be a reliable conduit between companies cians and professional and administrative fore they are hired. What solutions do and schools. ▬
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports INTERVIEW
tionally, TRU has a strong military pres- introduce new features that will augment ence in simulation and mission and main- the training capabilities for the instructors tenance. and the crew. TRU has always been and will continue to be focused on innovation and putting forth Could you elaborate on TRU's mainte- new technologies, such as TRU Horizon. nance simulation training offering? We are actively involved in virtual real- Could you provide some more informa- ity to support training for flight crew and tion on TRU Horizon? a number of Textron aircraft platforms. We TRU Horizon is a technology that allows are investing in a lot of new technologies for a simplified distributed I/O that can in this area, and we are applying many of support the use of aircraft Line-Replace- these technologies to the solutions we of- able Units (LRUs) in our simulators. TRU fer to our military customers. Horizon is the third generation of solutions with benefits such as ease of maintenance, Are there any key differences in require- lower cost of operation and fewer spare- ment between commercial and military part requirements. Instead of the tradi- customers? tional complex wiring and connections in A new area that has been relevant for the George aircraft, TRU Horizon simplifies the over- commercial world is in upset prevention all architecture and setup of the simulator and recovery training. We are working behind the panels. Our customers are of- hand-in-hand with the aircraft OEMs to Karam ten impressed with how clean and tidy our ensure we incorporate this training into our simulators are as well as how easy it is to simulation offerings. The military side has maintain and troubleshoot any issues in the its own requirements, but we are equally cockpit. attentive to our end users in that area. Vice President & General Manager TRU SIMULATION + Our philosophy has always been that one size does not fit all and having flexibility in Have there been any notable develop- TRAINING our solution means offering our customers ments in aircraft connectivity that have 133 a range of services. impacted TRU’s solutions? We are expending resources on connec- What are some of the newest innova- tivity so that we can collect data from our tions being implemented on the simula- operating simulators during training ses- tion front? sions and feed it back to support compe- TRU will remain current in visual systems tency-based training. As a company, TRU technology as it continues to rapidly im- has been a big supporter of evidence-based prove in fidelity and projector technology. training. We work with a number of air- Parallel to that is the full-flight simulator lines around the world to allow them to TRU simulation is a manufacturer of flight project we recently completed for Viking, implement evidence-based training within simulators and training solutions for civil a Canadian aircraft OEM. This technology competency-based training. Instead of fo- and military markets provides additional visual channels to fa- cusing on repetitive mechanical tasks, the cilitate pilot training and docking maneu- focus is on the experience gained through Previously Mechtronix, TRU Simula- vers which traditional simulators do not operation of the aircraft and data collected tion + Training is a Textron Inc. com- have. from the simulator, then feeding it back to pany. Could you briefly introduce TRU the training structure and having an adap- and its relationship to Textron? Are there any considerations or require- tive training philosophy. TRU is the simulation and training arm ments in line with changing technology of Textron. We have a strong pedigree in in the cockpit? What are the main objectives for the the products and services we offer, which Aircraft are evolving, evident in new in- company going forward? has helped Textron with its strategic move novation from the aircraft OEMs. For ex- Our commercial air transport has doubled into the area of simulation and training. ample, Boeing's new 777X aircraft has this year and we plan to continue grow- Our business addresses a number of ar- cockpit displays with touchscreen tech- ing aggressively going forward. We also eas in simulation equipment and training. nology. Being Boeing's chosen supplier plan to have a number of interns join TRU In terms of commercial air transport, our for this aircraft, we will be implementing every semester. We are an attractive com- focus is the provision, design and supply this technology on our simulators to ensure pany to work for because of the exposure of simulation equipment. As for business they mirror the aircraft. offered to new aviation technologies and aviation and rotary wings, we provide our Additionally, in non-aircraft-specific sys- the opportunity to develop solutions in col- customers with equipment and training tems, such as the Instructor Operating Sta- laboration with major international aircraft too, especially Textron customers. Addi- tion, we are ensuring that we continuously OEMs. ▬
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“We can always do more by raising our ambitions and having bigger dreams. The C-Series program will definitely spur growth in the industry. We have had a tough past few years, but with the strategy we have in place and the economic environment, Québec is now widely recognized as an exciting hub.ˮ
- Dominique Anglade, Minister of Economy, Science and Innovation, Government of Québec EDITORIAL Global Business Reports
Québec’s claim to global leadership
Québec’s aerospace sector has all the makings of a global leader. From world-class OEMs to a competitive supplier network, the region’s ecosystem is thriving due to a number of factors. Profi- ciency across various disciplines, most notably automation, ro- botics and artificial intelligence (AI) are key in ensuring the sector retains its prominent position internationally. 136 The importance placed on the province’s aerospace industry as a key economic driver are clear. Examples of support from the federal government include a C$2.2 million contribution, through Canada Economic Development for Quebec Regions (CED), to six aerospace companies that provide highly specialized equip- ment to the sector and C$372.5 million in repayable contribu- tions to Bombardier for its Global 7000 business jet and C Series aircraft. Meanwhile, the Québec Ministry of Economy, Science and In- novation’s recently-published ‘Québec Aerospace Strategy’ for 2016 to 2022 commits C$510 million in government contribu- tions to the sector and includes a 10-point plan for the industry’s adaption to global trends. Focal points include the attraction of Tier 1 and 2 suppliers, the transition to Industry 4.0 and boosting exports. C$400 million of funding has been allocated across 240 projects to to help SMEs transition to advanced manufacturing, ingly globalized operating environment, companies worldwide for example. As well as support for the province’s SMEs, Qué- must compete internationally in order to obtain any business, also bec’s government has also shown substantial support for its prime tying companies in with export markets as an all-important source contractors, with a US$1 billion investment into Bombardier’s C of demand. Series in return for a 49.5% stake and a recent C$45 million loan With Québec already exporting over 80% of its aerospace produc- to MDA to set up a center of excellence for satellites. In addition tion, remaining competitive at an international level is paramount. to funding allocations, there are also a number of policies and Recognizing the importance of fostering a competitive supply incentives in place to support Québec’s aerospace sector. chain, Québec’s government is extremely focused on increas- Global dynamics are shifting and, as such, well-established in- ing the efficiency of its companies through the implementation dustries are experiencing increased competition from lower-cost of Industry 4.0 technologies. “In order to export, SMEs need to operating environments. Developing countries such as China and become top performers; to do this they need to invest in Industry India are hot on the heels of established aerospace jurisdictions 4.0 processes and in automation in particular,” commented Domi- as they continue to invest heavily in their manufacturing sectors. nique Anglade, Minister of Economy, Science and Innovation, Whilst the Americas and Europe may currently hold an advantage Government of Québec. “For this reason, the Ministry launched as home to the only certifying bodies currently recognized world- the MACH-FAB 4.0 initiative with Aéro Montréal which focuses wide, the barrier is rapidly diminishing. In light of an increas- on helping SMEs transition to Industry 4.0. The Ministry also
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports EDITORIAL
137
Image courtesy of Bombardier launched an export strategy in October 2016 and has a dedicated to survive if they have a unique product or will otherwise have organization to support exports. Every time we travel internation- to compete on price. Government support is therefore essential ally to events, we bring an aerospace team to promote exports in supporting process innovation in SMEs in order to sustain a from SMEs and to find forums for them to meet customers.” competitive aerospace SME network. Because companies are placing more emphasis than ever on ef- Going forward, as well as the focus on implementation of Indus- ficiency and cost reduction, it is the engineering services segment try 4.0 technologies, there will be a drive to attract more Tier 1 that has arguably seen most rapid growth in an otherwise relative- integrators to the region. “We need to bring more integrators to ly slow market. Québec’s service companies are extremely well Québec, such as subsidiaries of large foreign companies,” em- placed to take advantage of this uptick in demand due to the re- phasized Suzanne M. Benoît, President at Aéro Montréal. “This gion’s longstanding prominence in R&D and process innovation. will bring opportunities for our SMEs and foster supply links with As a result, Québec’s aerospace sector will continue to narrow the our OEMs.” cost gap with lower-cost countries. Québec has its sights set on global leadership and has the appro- Alongside a need for increased efficiency, increased consolida- priate tools and strategies in place to meet its targets. Whilst the tion in response to OEM pressures for more integrated service long-term future is less certain as international dynamics continue offerings will change the shape of Québec’s aerospace supply to shift, Québec’s aerospace sector is poised to adapt and ensure chain. SMEs unable to offer turnkey solutions will only be able its position as a global forerunner. ▬
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QUEBEC'S INFORMATION ABOUT YOUR COMPANY INDUSTRY CHALLENGES AEROSPACE INDUSTRY
1. Please indicate the type of company you 2. The main sector in which you 1. Attracting investment to the sector's 1. The sector has extensive capabilities and 2. The presence of prominent multinatio- 3. Relatively low business costs give represent within the aerospace industry operate has a positive outlook development is a challenge for the the potential to be an international leader nals is beneficial to the surrounding Quebec’s aerospace sector a strong aerospace industry in Quebec industry competitive advantage
Aeronautics Strongly agree Strongly agree Strongly agree Strongly agree Strongly agree R&D service provider in Optics & Photonics Agree Agree Agree Agree Agree Engineering services Neither agree nor disagree Neither agree nor disagree Neither agree nor disagree Neither agree nor disagree Neither agree nor disagree All Disagree Disagree Disagree Disagree Disagree Education Strongly disagree Strongly disagree Strongly disagree Strongly disagree Strongly disagree Fnancing Economic development agency University Services
3. Does your company serve only the 4. If no, what other markets does your 2. There are limited resources available to 4. Companies within the aerospace 5. One of the key benefits of operating in 6. The tax framework is very supportive of national market? company serve? support R&D e orts and innovation industry are well supported by the local Quebec is the access to skilled labor and businesses and national governments research capabilities provided by universities
Ye s Europe Strongly agree Strongly agree Strongly agree Strongly agree No Asia Agree Agree Agree Agree North America Neither agree nor disagree Neither agree nor disagree Neither agree nor disagree Neither agree nor disagree South America Disagree Disagree Disagree Disagree Australia Strongly disagree Strongly disagree Strongly disagree Strongly disagree Africa
Industry Explorations ONTARIO AEROSPACE 2017 Global Business Reports Global Business Reports SURVEY
QUEBEC'S INFORMATION ABOUT YOUR COMPANY INDUSTRY CHALLENGES AEROSPACE INDUSTRY
1. Please indicate the type of company you 2. The main sector in which you 1. Attracting investment to the sector's 1. The sector has extensive capabilities and 2. The presence of prominent multinatio- 3. Relatively low business costs give represent within the aerospace industry operate has a positive outlook development is a challenge for the the potential to be an international leader nals is beneficial to the surrounding Quebec’s aerospace sector a strong aerospace industry in Quebec industry competitive advantage
Aeronautics Strongly agree Strongly agree Strongly agree Strongly agree Strongly agree R&D service provider in Optics & Photonics Agree Agree Agree Agree Agree Engineering services Neither agree nor disagree Neither agree nor disagree Neither agree nor disagree Neither agree nor disagree Neither agree nor disagree All Disagree Disagree Disagree Disagree Disagree Education Strongly disagree Strongly disagree Strongly disagree Strongly disagree Strongly disagree Fnancing Economic development agency University Services
3. Does your company serve only the 4. If no, what other markets does your 2. There are limited resources available to 4. Companies within the aerospace 5. One of the key benefits of operating in 6. The tax framework is very supportive of national market? company serve? support R&D e orts and innovation industry are well supported by the local Quebec is the access to skilled labor and businesses and national governments research capabilities provided by universities
Ye s Europe Strongly agree Strongly agree Strongly agree Strongly agree No Asia Agree Agree Agree Agree North America Neither agree nor disagree Neither agree nor disagree Neither agree nor disagree Neither agree nor disagree South America Disagree Disagree Disagree Disagree Australia Strongly disagree Strongly disagree Strongly disagree Strongly disagree Africa
Global Business Reports ONTARIO AEROSPACE 2017 Industry Explorations FINAL THOUGHTS Global Business Reports
With the leadership of the government, the industry, and the financial entities, the tools are available to move the industry forward and gain size where needed. Québec’s aerospace cluster is operating in an extremely competitive global industry and it needs to continue evolving in this way in order to remain a key player.
- Alain Ricard, Head of Transport Team, Norton Rose Fulbright
Both the provincial and federal governments recognize that the majority of the industry’s workforce is employed by SMEs and that they must therefore provide a healthy ‘environment’ to these companies by implementing sound and supportive policies. There are therefore a lot of positive steps being taken, such as the introduction of the Industrial Technological Benefits (ITB) policy by the Federal Government. Aéro Montréal has also increased the number of seats on its board of directors allocated to SMEs. L-3 has over 800 suppliers across Canada, so we definitely appreciate having a strong SME ecosystem. Small and Medium sized businesses tend to be lot more agile and efficient than organizations of a larger size. It is important that we continue to support SMEs as they do not only provide a lot of flexibility to our Industry but they are also very often incubators for research and new technology.
- Jacques Comtois, Vice President and General Manager, L-3 Communications MAS
140 Whilst government support of the Big Four OEMs is essential as they are too big to fail, the focus needs to extend to the SMEs to a greater extent to maintain Canada’s competitiveness. The Big Four OEMs are public companies whose focus must be on reducing cost and time to market as a priority. Government funding, an integral component of a thriving industry, can therefore end up being rationally invested in lower-cost jurisdictions to create the best return on investment for shareholders. Ironically as a result, government investment in OEMs often does not lead to investment in Canada’s SMEs but rather to increased offshoring for the industry as a whole. The solution is for the government to break the loop by creating an aerospace policy that encourages a more strategic investment distribution across the whole sector to encourage SMEs to grow and prosper.
- John Maris, President, and Phil Cole, VP Business Development, Marinvent and Cert Center Canada
The investments required for new equipment are very high and OEMs are asking suppliers to absorb more of the non-recurring costs of production such as software, workforce required and certification. Commercial banks do not typically finance these soft costs, so government support is critical... Initiatives such as MACH FAB 4.0 are also crucial to help companies transition to new processes… The outlook for the industry is strong–passenger and cargo volume is on the rise. We are in a winning industry; we just need to capitalize on its strength.
- Guillermo Alonso, President, Alta Precision
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports Global Business Reports FINAL THOUGHTS
There are many good programs organized by institutions such as Aéro Montréal but the visibility is not high enough. Many SMEs do not have the time and resources to continuously seek and identify these programs. It would be beneficial if more resources were devoted to advertising such initiatives. We are grateful for the support Export Québec provides for companies like AMEC to promote their companies internationally at conferences such as NBAA.
- Geneviève Paré, Business Development Director, AMEC Usinage
Many SMEs suffer from the pressure on cost. This applies mainly to commercial programs, and all simple parts are outsourced to low-cost countries. However, positioning ourselves as a niche expert in complex products and gears where we have a lot of knowledge and know-how protects us from these trends…The more integrated we are, the better it is for the customer in terms of lead time and cost.
- Serge Audet, General Manager, ATLAS Aeronautik
Suppliers in Québec need to break out of the Québec bubble. It is a major challenge as 141 this takes considerable time and investment. It makes sense for suppliers to diversify their customer and program base and move up the food chain towards more integrated structures, which will come from exports…The government is aware of the challenge; the clock is ticking on a lot of the smaller suppliers. Their reliance on a very local OEM customer base is a big vulnerability, so they need to penetrate international markets outside the Québec cluster. For the cluster to evolve, the smaller companies need to be supported in addressing these challenges. The Québec Government as well as Canada are very aggressive in helping to promote companies and assist them in penetrating new markets. Government officials are not sticking their heads in the sand and ignoring the problem.
- Stephen Kearns, President & CEO, Avior (Produits Intégrés)
Space is evolving very rapidly with the advent of new technologies leading to a large increase in available data and new countries entering into the industry, making it a very dynamic environment. The CSA wants to ensure that space continues to drive innovation and economic growth for the benefit of Canadians. We will therefore leverage all of the new economic and technological opportunities presented by the possibilities of cheaper, faster and more frequent space activity. We will ensure that the Canadian space sector is connected with our international partners so that it remains at the forefront of innovation. Finally, we want to maintain the skills capacity in terms of scientists and engineers to exploit these opportunities.
- Sylvain Laporte, Chief Executive Officer, Canadian Space Agency
Global Business Reports QUÉBEC AEROSPACE 2017 Industry Explorations CREDITS Global Business Reports
EDITORIAL AND MANAGEMENT TEAM
Project Director/Journalist: Catherine Howe ([email protected]) Project Coordinator: Sorina Dumitru ([email protected]) Journalist: Matthias Lomas ([email protected]) Executive Editor: Mungo Smith ([email protected]) Operations Director: Miguel Pérez-Solero ([email protected]) Graphic Design: Gonzalo Da Cunha ([email protected]) Graphic Design (ads): Özgür & Deniz ([email protected]) General Manager: Alice Pascoletti ([email protected])
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THANK YOU
We would also like to sincerely thank all the governmental bodies and associations that took time to share their insights into the market and supported the project with their experience and knowledge. 142 AÉRO MONTRÉAL aeromontreal.ca
MINISTÈRE DE L'ÉCONOMIE, DE LA SCIENCE ET DE L'INNOVATION (MESI) economie.gouv.qc.ca
AEROSPACE INDUSTRIES ASSOCIATION OF CANADA (AIAC) aiac.ca
CANADIAN SPACE AGENCY (CSA) www.asc-csa.gc.ca
INVESTISSEMENT QUÉBEC www.investquebec.com
CONSORTIUM DE RECHERCHE ET D'INNOVATION EN AÉROSPATIALE AU QUÉBEC (CRIAQ) criaq.aero
COMITÉ SECTORIEL DE MAIN-D'ŒUVRE EN AÉROSPATIALE (CAMAQ) camaq.org
DÉVELOPPEMENT ÉCONOMIQUE DE LA VILLE DE LAVAL http://lavaleconomique.com/
DÉVELOPPEMENT ECONOMIQUE LONGUEUIL www.delagglo.ca
GRANBY INDUSTRIEL granby-industriel.com
MIRABEL ÉCONOMIQUE www.ville.mirabel.qc.ca
QUÉBEC INTERNATIONAL www.quebecinternational.ca
SHERBROOKE INNOPOLE sherbrooke-innopole.com
Industry Explorations QUÉBEC AEROSPACE 2017 Global Business Reports