When Losses Don’t Matter: How Japanese Conglomerate Mitsubishi Blows Billions on a Jet Nobody Really Wants

On paper, this looked like a no-brainer.

By MC01, a frequent commenter on WOLF STREET:

At the 2007 Paris Air Show, Mitsubishi Heavy Industries announced to much fanfare a brand-new regional airliner. The fantastically named Mitsubishi Regional Jet (MRJ) was to be certified for commercial operations by 2012 and to set a number of firsts for the technologies employed in its construction, including an airframe made with over 80% in composites.

The MRJ was the culmination of a ¥50 billion ($440 million in 2003 money) study program funded by the Japanese Government to build a regional airliner in the 50-90-seat category with as much domestic content as possible.

On paper, this looked like a no-brainer: Japanese firms such as Subaru (formerly Fuji Heavy Industries), IHI, and Mitsubishi are major vendors for the commercial aviation industry, supplying everything from toilets to critical large structural assemblies.

However, industry veterans remembered that Japan’s previous attempt at building a commercial airliner ended in farce: the NAMC Y-11 was produced up to 1974 in small numbers, losing a lot of money and being generally dismissed by airlines despite its excellent performance. Its problem was an inefficient cabin layout, the result of having been designed “by committee” instead of in close cooperation with the airlines that would have to operate it.

In terms of the MRJ, Mitsubishi grandiosely and confidently announced that it aimed at nothing less than a 20% share of the regional airliner market over the following 20 years, estimated at a total of 5,000 units, and that their MRJ would break even after just 350 units had been sold. The total cost of the program was put at $1.9 billion in 2007 dollars.

However already in 2009 it was evident this was nothing more than corporate hype reported uncritically by the media that should have known better.

In September 2009, Mitsubishi announced an extensive redesign of the MRJ, chief among which was abandoning the previous extensive use of composites in favor of traditional aircraft-grade aluminum alloys. As Mitsubishi is both one of the world largest producers of composites and a major manufacturer of critical composite assemblies, this decision is still puzzling and highly controversial.

This immediately caused the Maximum Take Off Weight (MTOW) to balloon from 38,000 kg to 42,000 kg, effectively jeopardizing all-important US sales due to the all-important “scope clause.”

The scope clause is part of the collective bargaining contracts the big three US airlines – United Airlines, Delta Air Lines, and American Airlines – have with the respective pilots unions.

The scope clause limits the size and numbers of airliners that may be flown by a company’s regional affiliates, the so-called feeder airlines that shuttle passengers between smaller airports under contracts and agreements with the Big Three. The stated goal of this clause is to avoid outsourcing the main company’s flights to the regional airlines and/or using pilots sourced from these airlines to replace regular ones during a strike.

Since 2008, all three airlines have a scope clause limiting their regional affiliates to aircraft with 39,000 kg MTOW and 76 seats. The smaller version of the MRJ (MRJ90) was designed from scratch to meet these limits, carrying 76 passengers in a single class configuration and with a MTOW under 38,000 kg. The inexplicable and inauspicious redesign caused Mitsubishi to instantly lose a big order of 50 firm orders plus 50 options from Trans States Holdings.

Trans States, which operates feeder services for the Big Three, made use of a contract clause allowing them to cancel their orders at no penalty if any redesign made the MRJ non-compliant with the scope clause. The financial loss for Mitsubishi on this contract was $2.3 billion in firm orders alone.

To counter this serious issue Mitsubishi launched another thorough redesign of the smaller MRJ90 aimed at drastically slashing weight which, however, will push its entry into service back at 2023 if not later. No cost estimate for this redesign has been given so far.

These near-continuous redesigns had the effect of pushing the whole MRJ program back 8 years for the larger MRJ70 and at least 11 years for the smaller MRJ90.

To add insult to injury, in October 2018 Bombardier of Canada sued Mitsubishi, alleging an ex-employee had sold the Japanese firm trade secrets to help with the FAA certification process of the MRJ. The lawsuit was thrown out by a Federal judge in April 2019.

While such allegations are very common in most industries, it opened the door for a weird chapter of the return of Mitsubishi as an aircraft manufacturer: just two months after the judicial case closed, Mitsubishi and Bombardier executives stood on the same stage in Montréal and shook hands to sign the sale of the Canadair Regional Jet (CRJ) program to Mitsubishi.

Under the deal, Mitsubishi will pay $550 million in cash and assume $200 million in liabilities to acquire the maintenance, support, refurbishment and sales activities for the CRJ series, including two sites in Canada and two in the US. Bombardier will continue assembling CRJ aircraft well into 2020, when the last CRJ is scheduled to be delivered, on behalf of Mitsubishi.

By the time Mitsubishi and Bombardier were closing their deal, the MRJ program was in truly bad financial shape. Mitsubishi Aircraft, a joint venture between Mitsubishi Heavy Industry (with financial and technical backing from sister companies) and minority partner Toyota, had accumulated debts for  ¥110 billion by March 2018 and went on to accumulate a further ¥48 billion in the following six months, forcing its parent companies to inject ¥220 billion into Mitsubishi Aircraft and raising its capital from ¥100 to ¥270 billion.

This total doesn’t include liabilities incurred by other members of the Mitsubishi and Toyota keiretsu, such as the ¥65-billion purchase of government-owned land to build a new factory, on the site of one of the wartime Mitsubishi aircraft factories.

At last count Mitsubishi Heavy Industries alone had sunk ¥350 billion in the MRJ, and this doesn’t include expenses by other companies belonging to the Mitsubishi keiretsu, such as MUFG Bank, Mitsubishi Chemical Holdings, Mitsubishi Aluminum, and minority partner Toyota.

At the present, it’s estimated Mitsubishi will have to sell 800 MRJ to break even, more than twice the 350 originally envisioned.

As it often happens in these cases, Mitsubishi decided to apply a fresh coat of paint to the whole project, and in June 2019 rebranded the MRJ “SpaceJet”; and confusingly, the larger version will be named SpaceJet M90 while the smaller clause-compliant version will be called SpaceJet M100.

At the present, the SpaceJet order book is very thin, with just 167 M90 and 50 M100 firm orders, plus 180 options in total. Orders have been “padded” by 47 firm orders from All Nippon Airway and Japan Airlines – aircraft neither company wants or needs but which are crucial to get the program off the ground.

As things stand right now it’s likely the MRJ will end up like its predecessor, the NAMC Y-11: a costly commercial and economic failure. The project has been much delayed and is grossly over budget and Mitsubishi is likely to have priced the aircraft far too aggressively, meaning they’ll lose money on every aircraft delivered for years.

But with the Russian Sukhoi SuperJet and the Ukrainian Antonov An-148 both mired in safety scandals that make the Boeing 737 MAX look good by comparison, and China’s COMAC ARJ21 basically an obsolete 1980s design, it’s possible by the use of aggressive marketing, Mitsubishi will win orders from regional airlines across Asia, Africa and South America, and that would soothe the pain even if the program never makes money in the end. By MC01, a frequent commenter on WOLF STREET

And these are still the good times, with growing passenger traffic. Read…  The September Airline Massacre in Europe

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  91 comments for “When Losses Don’t Matter: How Japanese Conglomerate Mitsubishi Blows Billions on a Jet Nobody Really Wants

  1. 2banana says:

    It is refreshing to find the hard truth. And with a dash of sarcasm.

    “But with the Russian Sukhoi SuperJet and the Ukrainian Antonov An-148 both mired in safety scandals that make the Boeing 737 MAX look good by comparison, and China’s COMAC ARJ21 basically an obsolete 1980s design…”

    • DV says:

      Antonov program is dead. Sukhoi Superjet does not have “safety problems”, it has service problems. Boeing 737 Max program is probably dead as well.

      • Bobber says:

        I see Boeing putting commercials out there now with testimonials by Boeing test pilots claiming the 737 Max is safe. Yeah, right.

        It’s interesting they apparently don’t have the money to redesign an aircraft propertly, but they do have tons of money for advertising.

        My family will never fly in a 737 Max. I know which airlines have them, and I will not fly with those airlines unless they indicate that other aircraft will be used on a flight.

  2. Petunia says:

    I would comfortably fly Mitsubishi, who I am sure, doesn’t hire $9HR programmers from India to write their software.

    • Javert Chip says:

      Until the Great US recession, I would have strongly agreed, but the times they may be a changing (source: https://www.virtualemployee.com/articles/outsourcing-strategy/japan-warms-up-to-outsourcing-to-india).

      Most of this appears attributable to Japan’s rapidly aging & declining population.

      • Petunia says:

        There’s a lot of quality work coming out of India, but I don’t include the $9HR programmers hired by that other aerospace company, for obvious reasons.

        • nicko2 says:

          By 2030, the top three economies will be China, the USA, and India (in that order). What they may presently lack in quality, they will more than make up in quantity.

        • Petunia says:

          Nicko,

          If the trade deal with China fails they will be dead last on your list. The only innovation in China has come from the west. The minute the door to the west shuts on them, they will stop progressing. India has a more dynamic economy than China but they too are still very backward. The biggest threat to the US is the US.

        • nhz says:

          @Petunia:
          Didn’t the Chinese invent paper (fiat) money? I guess the US should be eternally thankful to them, being able to live way beyond their means for about one century ;)

          BTW, I don’t believe the Chinese cannot innovate as the people are evidently intelligent and I see plenty of good research coming out of the country lately. One of their big problems is authority, like junior researchers not daring to present anything new on their own. On the other side, in the West authority from the scientific establishment (often together with massive industry influence) is becoming a major roadblock to innovation in its own way.

          If China learns a few tricks from the West (apparently difficult because of culture, but culture can adapt) I think they have a bright future in science and technology, because they don’t have the toxic scientific establishment that is slowly killing Western science.

        • Petunia says:

          nhz,

          I agree the standing of the scientific community in the US is in the toilet, but it’s not because of a lack of innovation, it’s because they routinely lie for money. The innovators don’t have to lie and the posers do. I saw it first hand when I worked on Wall St. They could buy any opinion or scientific opinion they needed from the scientific community. The rest of the scientific community never uttered a peep about the nonsense being generated to sell bogus investments. For proof see climate change.

          If you want more proof “climate change” is real the NOLA web site has some good pictures of parts of the city under water. Just disregard the information on the broken water main and the mostly nonworking sewer system.

        • nhz says:

          @Petunia:
          Agree about the problems in Western science; I’m afraid innovators have to lie too nowadays because otherwise you simply don’t get research money. Looking at history in my country, most of the big innovations in science/technology came from people who were already wealthy and not in it for the money. 1-2 generations ago you could still get capital for a good idea, but in this time of unicorns everywhere a new idea that is simply good (and that doesn’t need countless millions in funding) has lost its attraction it seems.

          However, climate change and its threats are a very visible reality in the Netherlands and quite a few other low-lying countries in e.g. Asia and the Pacific (and I’m sure a few areas in the US too). We cannot afford to do nothing even though our politicians are still only busy with paper shuffling. But I don’t have faith in the “solutions” that are proposed now by politics (and sometimes by scientists), and certainly not in financial solutions like carbon credits or new taxes that are often heavily biased in favor of certain parties and will not accomplish anything. So in that sense I can understand the climate skeptics in the US.

        • char says:

          @nicko2

          2030 is in 11 years. That is simply to short for India to overtake the EU

        • MikeG says:

          The ones I’ve worked with aren’t that sharp either. It doesn’t fill me with confidence in their programming when they struggle with concepts like domain logins and VPNs to access our network. They have to be explicitly told every step of what is to be done.

        • Shawn says:

          “By 2030, the top three economies will be China, the USA, and India”

          Why because China and India have a billion+ people each? Bigger doesn’t mean better and both these countries have enormous problems which have been well documented over the last couple of decades.

      • char says:

        And their conflict with China. They want a strong India to attack China.

        ps. I think they are idiots. India is one of those states that is incapable of staying within its borders.

  3. Aussie Andy says:

    Give them credit for taking on this challenge. Power of the unions affecting the design of the aircraft just should not be in the equation. Accounting by Japanese companies is most unusual in some industries, for example a Japanese motorcycle production run they will produce x amount of units they will want x amount of money back and if say 1000 units still remain they will liquidate at very cheap prices as goals have already been reached ( thus occurred in the 1980’s not sure about now)0.

    • MD says:

      Nothing to do with ‘power of the unions’ it’s just a cultural thing.

      • char says:

        To make good airplanes you need a culture of following rules and not leaders. To do that successfully a strong method to complain about/over-rule bosses. In other words something akin to a union.

  4. Javert Chip says:

    Most of my business (IT & financial) experience is western (US & European), which has it’s own peculiarities, but I have also bumped into ethnic Japanese culture in the finance industry.

    “Eastern” business remains a mystery to me, among other reasons, due to my cultural failure to understand the concept of “face” (at its extreme, a non-debatable justification for knowingly and willing performing some unimaginably risky/destructive activity). A reasonable red-neck translation of “face” is “Hey Mom! Watch this!”.

    In the 1980’s, I frequently watched Japanese suffer stunning financial losses simply because others, aware of the risk/danger, said nothing so avoid causing “loss of face”.

    Sounds like MC01’s posting (whose stuff I always enjoy) alludes to some of this same phenomena.

    • NARmageddon says:

      >>because others, aware of the risk/danger, said nothing so avoid causing “loss of face”.

      You mean loss of face for the person doing the foolish deed, not the pointer-outer, right?

    • MikeG says:

      It’s usually a hierarchical thing. You don’t embarrass the boss man or more powerful firm by questioning their actions, you shut up and conform because that’s your place. Plenty of that in US corporations, too.

  5. R2D2 says:

    I do a lot of biz in Japan and still have absolutely no idea how most of their companies survive!

    It can take (literally) years for a boss to make a firm decision, the post-payment scope-of-work will often change wildly from the original contract, while zombie execs will just drift from zombie unit to zombie unit without ever really doing anything. Yes, this happens in almost every country worldwide, but not like in Japan.

    The long-termist coprorate culture and big domestic savings are surely the only things keeping much of Japan afloat.

    • Iamafan says:

      How does Japanese business survive? Well, how do Argentine business survive? Or Greece, or Cyprus? Ukraine?

    • fajensen says:

      I do a lot of biz in Japan and still have absolutely no idea how most of their companies survive!

      Same ways as “us”: There are two sets of accounts, one is the official one and the other set the hidden one. The shadows is where the deep roots of the business go to seek sustenance.

      For example we talk a lot, loudly, about the glory of Competition and ‘Free Markets’ (those are our open accounts) while at the same time we have Central Banks fixing the price of money and sending funding to everyone in The Club who’s pocket is feeling a bit tight and we have all manner of boondoggles derived from the leverage of taxpayers with deficit spending (those being the hidden accounts).

      The Japanese of course have their own, similar, games going on.

      If we understood their culture, it would be obvious what is in their hidden books.

    • Javert Chip says:

      Another huge Japanese advantage (don’t know how to rank in terms of the other two) is USA blood & treasure (translation: our kids and tax dollars) substantially assist in defending Japan.

      Japanese defense spending is 1% of GDP (US 3.1%)

      • char says:

        I’m not completely sure all Japanese see it your way.

      • Gandalf says:

        FYI, the modern Japanese Constitution, which was WRITTEN FOR THEM postwar by McArthur and his staff, forbade anything other than a small local self defense force. That’s why the Japanese military is called the Self Defense Forces.

        Everybody agreed that was for the best.

        You see, there was this little thing called World War II, with Pearl Harbor, the Nanking Massacre, etc

        Footnote: MacArthur was a big supporter of women’s suffrage, which is how Japanese women got the right to vote. It’s entirely possible they’d still be fighting for the right to vote today otherwise

  6. RagnarD says:

    Thanks MC01. Great stuff, as always.

  7. VarAway says:

    Excellent reporting MC, thank you.

    Reminds me of 2 cruise ships ordered by AIDA ( Germany )
    a daughter of Carnival Cruise Line, from Mitsubishi Shipyards.

    Mitsubishi wanted to enter the ” lucrative ” cruise ship building market ……. Oh Boy!

    Long story short…. Both vessels were delivered 1 year LATE,
    The losses of Mitsubishi were in excess of $ 2,3 Billion,
    repeat Billion, with a B!
    Needless to say that Mitsubishi said good bye to the cruise
    building market ……

    • MC01 says:

      There’s a very good reason why cruise ships are invariably built by State-owned shipyards in Europe. ;-)

      • Realist says:

        There is a family owned shipyard building cruiseships in both Germany and Finland with success, Meyer Werft.

  8. Old-school says:

    About 20 years ago I went to an intro training class on finite element analysis software. A guy was there and we were talking about composites in military aircraft as he had been involved in project somehow. He said it was basically traditional airframe with composite skin. Seems like he said something about lightening strikes but not sure.

    One thing I learned in engineering was you have to be careful of how a material fails. You can have two materials with the same strength but one might have brittle failure where the other is very ductile and will bend a long way before failure. Seems like you might want that in an airframe.

    I just saw Boeing had a big recall on some 737 because of hydrogen enbrittlement. I never ran into this but it has been the cause of some tradgedies. It used to be very hard to detect, but it might have improved by now.

    Other thing I remember that always scared me about flying was aluminum has a finite life under cyclical stress and will always fail at some cyclic load. Steel if stress is keep low enough could have infinite cycles.

    I wonder in the chief engineer of a plane can fly without worrying. He knows all the things that could go wrong.

    • 2banana says:

      Are you suggesting a steel airplane????

      All metal has cracks in it. All metal fatigues under enough cycles.

      The good news is that cracks can be detected well before a failure with non destructive testing.

      And predicted very well in the life span of an airframe with modern computers and modeling analytics.

      B-52 bombers are now well over 50 years old. And are still in the active American AF inventory of airframes. And are made of aluminum.

      • Old-school says:

        No I am not suggesting steel. If I remember my engineering class correctly if you get the stress level low enough in steel cycles can be infinite, but not aluminum. Had to do with basic material structure. I am sure aluminum alloys are very good and you can do more with 1 lb of aluminum than steel.

        I was in mechanical engineering when we tried to get answer within 10% and then put a 4:1 safety factory for all we didn’t know.

        Because of weight I think aircraft must use smaller safety factor. Someone told me 1.5 : 1 but that seems too low to me.

        • Paulo says:

          I’m re building an antenna with lots of aluminum and copper. Couldn’t find my nippers and just did the old aluminum bend to work harden it into brittleness. Snapped it off.

          To the comparison of B-52 vrs modern ac short/medium range, it is truly apples to oranges. It’s all about pressurization cycles which is of course in direct relationship to takeoffs and landings. I read where the Aloha airlines 243 failure was from almost 90,000 flight cycles. Short haul aircraft do more takeoffs and landings. Overworked aluminum gets brittle.

          In my old bush flying life I flew aircraft from the ’30s, and more modern versions. Difference, no pressurization. Parts that regularly worked, failed, and inspection regimes were designed to find them before they found you. A B-52 could be 100 years old and most likely wouldn’t have a years work a modern short haul a/c would endure.

          The old B-18 I flew had a steel spar, and they were subject to cracking at the fittings. If the spar cracked the plane was thrown away…too expensive to fix. Recycled, (pun intended).

          regarding the airline union comment above: If airline pilot unions didn’t have their restrictions, companies would simply contract out all their work to their in-house feeders. Think maquiladora on the same jobsite in the same company. It’s always fine unless it affects you.

      • tobyt says:

        the B52 is an amazing story…I flew two 6 month tours over Vietnam in 1966 and 1967. granted it was the D model but there were already plans on the books to phase them ALL out within the next 12 years. Over a hundred 500 pound bombs was a payload hard to duplicate.

    • Enzo says:

      I take it no one here watching anything like advanced auto racing?

      Composites are used heavily to create light race cars that can bear the stresses and loads that a race car must carry. Suspension parts in particular have been made out of composites for awhile. During the shift from metal suspension parts to the lighter composite parts, it was noted that the composite parts do fail in a different matter. Where a metal suspension rod would bend and deflect, a composite part tends to shatter.

      Either way the race car has failed. The bent metal suspension part might or might not make it back to the pits. The shattered composite part will not.

      Of course, the trick of good design is to make the whole thing such that no part ends up with too great a load. Today’s F1 cars are ridiculously reliable and almost all of those composite part cars finish the races where as in ‘the old days’ with the metal parts sometimes it was a challenge to get six cars home.

      • Wisoot says:

        Your point about composite not making it back to pits’feels’ right to me. New threats in the skies days of late. Non Weaponisation of space treaty didnt turn out so well… many satellites beaming god knows what with ex-orbital debris dropping out makes potential for a hazardous journey increase. Better to be in a heavy cart with more unknowns and to the eco worrier be damned on increased fuel burn with heavier weight.

      • Old-school says:

        We used to make composite pressure vessels. Very strong when pressurized. They had a problem handling a partial vacuum. No problem we thought it’s a pressure vessel.

        Well we found out if someone quickly closed a valve the momentum of the water flowing down the pipe pulled a partial vacuum on the tank and cracked it. The problem was solved by redesigning a plastic sight glass to have some holes with a rubber diaphragm that opened up when a slight vacuum occured. I am sure many people looked at that and thought I wander what the heck is that for?

    • MC01 says:

      There were several cases metal fatigue and especially crevice corrosion on first generation (-100/-200) and Classic (-300/-400/-500). This was caused by how fuselage sections were built before Boeing introduced a new form of cold bonding after 300 aircraft or so: the scrim cloth left in place during assembly which was supposed to last the whole life of the aircraft without consequences acted as a wick, slowly conducting moisture into the lap joints and finally causing corrosion to set in.
      The problem was already known in 1988 when Aloha Airlines Flight 243 (a 19-years old 737-200) suffered a catastrophic depressurization in flight. You probably remember pictures of the heavily damaged aircraft taken after landing.
      Aloha Airlines was found guilty of having carried out structural inspections at night in a poorly lit hangar to reduce down time but could not be singled out as the main culprit in the case.

      Metallurgy and material sciences have advanced by leaps on bounds over the past 80 years, and weren’t too shabby to begin with. The Hiduminium alloys patented by Rolls-Royce have been around for 90 years, originally developed for the engines used in racing seaplanes for the Schneider Trophy. They were still spoken of as a masterpiece of metallurgy when I was going to the Uni.

      But as I always say most people would probably be far more comfortable still flying around in a Vickers Vimy. ;-)

      • nhz says:

        Airplane designers could learn something from studying dragonfly wings. They are basically extremely advanced composite structures with even the tiniest details adjusted to required load and direction of forces, perfected by a few hundred million years of evolution. The construction allows some structural failure in less critical areas – many dragonflies can still fly with half the wings gone (or with a little more than two instead of four wings), try that with an airliner ;) And the wing is assembled from dirt cheap materials at room temperature, with the basic prepackaged structure expanded over 100x to its definite size/shape within an hour ;)

        • Erle says:

          nhz. thanks for the laugh. The last sentence is especially artful.

        • nhz says:

          @RagnarD:
          Dragonflies are the elves from folkore; one of the reasons I’m studying them, but from a technological point of view they are very interesting as well (lots of research applied to drones etc). Unfortunately science/technology tells us that functional wings for real humans are not possible (well, maybe in future when we move to planets with lower gravity …).

        • Erle says:

          Ragnar D, The Schneider trophy has to be one of the best of any examples of sculpture of the day. It would mean a lot to get a trophy like that for a year of enjoyment. I knew a fair amount about that series but had never seen a photograph of the trophy. That was back when art made one happy; now you would get something like a banana duct taped to a wall.
          It brings a tear to the eye to see what has been lost with Frankfurt school modernism.

        • RagnarD says:

          Yeah, that’s a pretty amazing piece of sculpture. Created by nobler folk than generally exist today.

          As far as simulated flying… I just got back from learning (trying to learn) how to Kite-surf in MuiNe, Vietnam.

          Considering…
          The mechanical violence of water skiing.
          The death rate of wing suit flyers and their inherent lack of control vs gravity.
          The mechanical violence and separation from nature in airplanes and helicopters.

          I’ve not been ballooning or in a glider, which both seem pretty awesome, but I’m too afraid of heights without a mechanical back up system to try them, so I won’t nay-say them here.

          When you see the kites on the water, the way they flutter around like insects, with both the control and lack of it, they seem to make a good approximation of being a flying insect, if not a dragonfly.

        • nhz says:

          @RagnarD: I only tried paragliding as a passenger in New Zealand long ago, awesome! There is a prime paragliding spot at the Atlantic coast near where I live but the conditions can be challenging and there are frequent accidents (sometimes deadly); with nearby kite surfing violent accidents occur too; not my taste of entertainment.

          While most insects including most damselflies are at the mercy of the elements in flight, some dragonflies even hunt with wind speed 6-7 and you can see them enjoy the experience. Quite a sight to watch and I don’t think there is anything such flight experience for humans.

    • fajensen says:

      Yes.

      Composites have nice performance numbers but those tend to come at the price of sudden and dramatic failure.

      In addition to that, composites are not at all forgiving regarding mistakes or variances in the environment or raw materials during their production. Everything has to be exactly as the designers specified, all the time, making for a very complex manufacturing process.

      It is hard to spot from the outside, for example, that a resin is not 100% up to it’s nominal hardening inside a component. One has to stress-test the components to find out, which will mean destroying enough parts to get good enough statistics. Usually, only the ‘limited numbers infinite money’-crowd can afford that: ‘Space’, The Military, Sports Enthusiasts and Racing.

      Aluminium is very well understood as a construction material. I’d rather fly in something made from aluminium than carbon fibre composites or that honeycomb stuff with aluminium glued to it!


      Having said all that, one can relatively safely do outrageous things with wood strips, glass fibre and epoxy. But not on an assembly line, this is a ‘by hand’ composite.

      • MC01 says:

        The first crash of an ATR-42, the first commercial airliner to make large use of composite assemblies, was immediately attributed to composites failing all of a sudden. The media had all sorts of horror stories on the matter.
        Unfortunately for these doomsayers the cause of this terrible accident was found to be pilot error.

        There’s absolutely nothing intrinsically wrong with composite materials. In fact in many applications they are preferable to the old fashioned (pre-1920) metal alloys many people here seem to love due to a long series of benefits ranging from far superior corrosion resistance to more predictable flexibility patterns.
        A particularly welcome benefit of carbon-fiber reinforced plastics is the possibility of doing away altogether with rivets, whose punch holes have long needed extra attentions during airframe inspections as potential sources of structural failures.
        For passengers these benefits mean the cabin can be kept at a higher pressure (equivalent to a lower height) and with higher moisture levels, meaning your dinner won’t taste like melted plastics. Well, apart the standard issue catering carrots: they always taste like melted plastics. ;-)

  9. Glenn says:

    “the result of having been designed “by committee” instead of in close cooperation with the airlines that would have to operate it.”

    A very strange sentence, as it would appear that the complaint is that it wasn’t designed by an even larger committee that included the airlines.

    Given that we know that airlines are run by sadists, I suspect the problem was that people had room to sit and could move around comfortably without stepping into someone’s lap to go to the toilet.

    • MC01 says:

      “Design by committee” is a phrase that first entered the aircraft world in the 60’s, following the introduction of several British military aircraft whose cockpit layout had been truly designed by a committee of people sitting around a table with no input from the pilots that would be flying them or the instructors that would train people in them. In ill-fated BAC TSR-2 bomber was an extreme case of this.

      In 1975 Henri Ziegler of Breguet fame, at the time the Airbus president, famously lambasted the Concorde supersonic aircraft as an egregious example of “design by committee” and “a political vanity project” designed with no input from the airlines that were to operate it.
      At the time this was shocking news because the Concorde was untouchable: everybody was supposed to hail it as the pinnacle of airline engineering and keep any criticism for himself.
      But in reality neither Air France nor British Airways (originally BOAC) wanted or needed the Concorde. It had a quirky cabin layout, especially when compared to the big American widebodies such as the Douglas DC-10, and it was massively expensive to operate. It lost money on every single flight.
      Sir Richard Branson of Virgin fame later boasted he could have made the Concorde profitable and apparently made a serious bid to buy several low-hour airframes from Air France and British Airways, but I have my doubts even somebody like him could have truned the project around.

      • Paulo says:

        Best designed aircraft ever, The DHC-2, used pilot input in their design plans from the beginning. I have 10,000 hours in them and they were truly remarkable, dependable, easy to load and easy to fly. They were specifically designed to be a workhorse and the design has not been equaled.

        Imagine designing a multi-million dollar modern a/c and not ask for input by those who will be flying them? Unbelievable.

        My wife worked at a school that was built without input from any teachers. It lacked storage. It was noisy due to connected HVAC in a common ceiling space. They made bathrooms with just one toilet, instead of stalls. There was one staircase. This is what happened when designers/architects were allowed to control the process. More was spent fixing the eff-ups than the original lower-cost building. Looked nice form the outside, though. Nice siding. Nice totem pole in the courtyard.

        They might also want to ask passengers for some input? Imagine. Hell, we all know what they would say, “More legroom and none of the above”. :-)

        • nhz says:

          I think part of the superiority of some of these older designs is that they were designed and build by a highly qualified small team or even a single individual, who knew very well what the basic requirement was – often using the KISS principle. Start building a plane with a committee (and a myriad of requirements), use an army of 10.000 engineers and you know all kinds of unexpected problems will rear their head at some point that need to be papered over because back to the drawing board is no longer an option.

          I’m not familiar with aircraft design but see the same with rockets and rocket engines. And I see the same in home building: old monumental homes from several centuries ago are still standing (partly thanks to selection in time of course …) and have many simple but clever enhancements that work, while many modern “smart” homes often have hundreds of mistakes when finished, some of them possibly structural and severe, and depend on countless small devices and parts to keep working; no way they will last for centuries. Craftmanship has been replaced by a team of people who don’t really care what they are making and possibly prefer the house to collapse as soon as the builders warranty expires ;(

        • char says:

          An old building did not have indoor plumping or electricity.Those major mistakes where solved by spending a lot of money.There is also the fact that a big reason why they are loved is because they are so old. A new one build exactly the same would not be so wanted.

      • Chris Coles says:

        Concorde did not lose money on every single flight, indeed, at one point, the British Airways Concorde fleet provided a massive input to the profitability of British Airways. The underlying profitability problem was overcome by a combination of a recognition that the majority of passengers did not pay for their seat, which was paid by a corporation; that fact in turn was used to drive up the price of the seat; the second part was the use of Concorde for “excursions” where anyone could buy a seat for a short flight. Between those two examples, Concorde became very profitable indeed. However, Air France Concorde’s were not being used or priced in the same manner, and as such were not profitable. When the tragedy of the loss of a Concorde occurred, while the British could carry the maintenance costs for their fleet with the assistance of the French, when France decided not to continue maintaining their aircraft, forcing the full cost of maintenance onto British Airways; then British Airways made the decision not to continue. One last point; almost every Concorde is still fully airworthy and there are rumours of their return to service.

    • Mike G says:

      Committees can be OK if they’re relatively small and allow experienced and knowledgeable people to have input.
      But in most organizations every manager wants to pile in to grab credit, crowding out individuals who have actual knowledge because they don’t have hierarchical or political power so they couldn’t possibly have anything important to say.

  10. DR DOOM says:

    Japan has been forced to make dramatic changes since The fateful day The Empires’ Darth Vader admiral Perry washed their wooden junks up on the shore of Toyko Bay. They will outlast our flash in the pan Empire due to their culture which is floating under a homogenous population. Today 78 years ago my dad was in the Marines. He ended up in Toyko via the 6th Marine Expeditinary Force with his fun meter pegged. Before he passed away he always got a chuckle when he heard the word Mitsubishi. The company that brought you Pearl harbor. You would have loved the irony that Mitsubishi is in the news about an airplane while all the old hands of the 6th have faded away. So here’s to you dad, I miss your cynical observations on life.

  11. California Bob says:

    Too bad. Mistsubishi can do it right when they want to. A6M (Zero), MU-2.

  12. V2500 says:

    (Although trivial, the Japanese propeller passenger aircraft that has failed commercially in the past is NAMC ”YS-11”.)

  13. Michael says:

    And on top of everything, the MRJ is quite ugly
    BTW
    Not mentioned in the article,
    Mitsubishi MU-300 Diamond (later Hawker 400) and MU-2 were relatively successful!

  14. unit472 says:

    I really enjoy the TV series Engineering Disasters. Most of the issues raised here have been covered. Hydrogen embrittlement was found to be the cause of the failure of the bolts holding the London ‘Cheesegrater” tower together.

    Aluminum cracking on airplane fuselages was detailed in the disintegration of an Air China 747 flight between Taipei and Hong Kong. It had been known and repaired but insufficiently. Almost comically, save for the tragic deaths, the problem with the repairs was revealed because Air China allowed smoking on its flights. The fuselage ‘patches’ to repair the cracks were stained at the seams by cigarette smoke escaping from the cabin leaving brown streaks! The solution: use sonograms of the sort to determine the sex of a fetus to map the cracks.

    The 737 MAX issue is a real ‘clusterf#ck’ for a lot of reasons but the crashes were avoidable if the pilots had been trained to be aware of the system. Penny wise and Pound foolish is always going to be a problem but when you are talking about a new airplane with a million parts being cycled daily the unforeseen is inevitable.

    • unit472 says:

      Did you know the most expensive weapon system in WW2 was not the atomic bomb but the B-29. It wasn’t a very effective airplane either at least for its designed role of high altitude precision bombing of Japanese industrial targets. A lot of that was due to cloud cover and the jet stream but that was a known known. After another failed raid on Japanese aircraft factories by B-29’s, the US Navy pulled its carriers ( and battleships )away from the fighting on Iwo Jima to conduct its own, more effective attacks, on the plants. The B-29’s, like the B-52’s in Vietnam, were only effective in carpet bombing civilian population centers. Here they excelled killing more people in Tokyo on March 9, 1945 than either atomic bomb and maybe more than both when 300 airplanes fire bombed the city. 12 of the B-29s were lost not from enemy attack but from the turbulence the conflagration created to low flying bombers that arrived over Tokyo at the height of the firestorm.

      Back on Iwo Jima the most effective weapon the Marines had were 8 field modified Army Sherman tanks dubbed Zippos that could shoot a stream of napalm 250 feet from the barrel of the turret gun.

      • RagnarD says:

        @unit472

        “Back on Iwo Jima the most effective weapon the Marines had were 8 field modified Army Sherman tanks dubbed Zippos that could shoot a stream of napalm 250 feet from the barrel of the turret gun.”

        So why didn’t the US Navy and Air Force simply roast any island that they wanted to take “from above” with an both an unbearable hot and suffocating firestorm for as long as it would take the occupants to be dead or cry mercy?

        Rather than send good young men to root out suicidal fanatics…

      • Javert Chip says:

        RagnarD

        1) Rooting people out of volcanic islands with hundreds of miles of inter-connected underground tunnels (some 30 ft underground) is not effective. Napalm is effective on known concentrations of enemy caught top-side or in isolated caves. Japanese made effective use of tunnels on other islands as well.

        2) While saturating area A with napalm, bad guys move to area B. When finished with Area A and moving to area B, bad guys move back to area A (a lot of this movement takes place underground).

        3) Making & delivering that much napalm takes a lot of stuff & time

        4) USN Admirals (who almost never go beach-side) honestly believed a thorough pounding by battleships & airplanes decimates the bad guys. Tarawa (among others) showed how wrong this strategy was. Remember, in WWII all military units were adapting strategy to changing geography & technology (this is a classic case of if the only tool you have is a hammer, all problems look like nails).

  15. Just Some Random Guy says:

    Speaking of Japanese war planes…

    You all know how Subaru’s campaign is about Love and peace and getting upper middle class Birkenstock wearing progressives to drop $45K on an Outback station wagon. Well funny thing about Subaru is their other business is making military helicopters. I never knew that and laffed my azz off when I found out. All those Seattle hippies are driving cars made by a defense contractor. God has one hell of a sense of humor sometimes.

    • Wolf Richter says:

      Just Some Random Guy,

      Couple of things:

      1. Welcome back from vacation. Sounds like you’re refreshed and all charged up and ready to go.

      2. Do you have to be a card-carrying hippie to be allowed to drive or buy a Subaru? No, there is no such requirement, in the US at least. Anyone with a driver’s license is allowed to drive a Subaru, and anyone with enough money or credit is allowed to buy a Subaru. You do not have to prove your political affiliation before purchase. You also cannot get evicted from the Subaru you bought if it turns out that you’re a closet conservative. Similar to a Ford. In the wild, liberals have been observed in Fords.

      • Just Some Random Guy says:

        Wolf,

        Vacay was great thanks.

        I’m sure there are some cons who drive a ‘Baru. But the vast majority are left wingers who drive one for the virtue signals. See also Prius.

        • Wolf Richter says:

          Just Some Random Guy,

          Gosh, and I always thought people bought the Prius and similar cars to save money on gas. How naive of me. Here in coastal California, gas is expensive, and if you can save 25 gallons a month, compared to driving what we’re driving, that’s close to $100 a month in savings, or $1,200 a year (varies with the price of gas). So if you own that vehicle for 10 years, it saves you $12,000 on gas, compared to driving our car. That’s good enough a reason to own something like a Prius.

        • MC01 says:

          Back in Fall 2016 when I decided to switch over from BMW to Toyota as company cars I gave the Prius a good look but in the end the Auris Hybrid’s extra internal space and especially the sweeteners offered by Toyota on them won out.
          These are probably the most reliable, cheapest to run cars I have ever seen, and the Prius is a tad better. There’s a very good reason why secondhand Prius, even crazy high mileage ones, go for silly money: cheapskates and other assorted penny pinchers love them because they are so cheap to run.

          When the last Honda in the fleet (the small car that’s used as a communication hack) will break down it will be replaced by another Toyota hybrid, either a Prius or a Yaris. Present Honda’s are just not good, and my trusted dealership dropped them for Mitsubishi.

  16. IslandTeal says:

    MC101… Good article and comments. Great to read the detail and history. Makes our current US based automotive bozo par for the course. We need to be thankful that he is still on the land based phase of people transport.

    • Old-school says:

      Honda poured a billion into a small business jet. Google it. It’s referred to as the hondajet. It’s made a bout an hour from me. I think they have sell about 30 a year at $5 million each, so I don’t see how it’s ever going to get a return on the investment. Better off selling candy bars.

      Anyway it’s got a unique design with engines coming off the top of the wing. Have to admire design creativity.

      • unit472 says:

        Textron/Cessna tried to make a ‘small private jet’, the Mustang. Production ended in 2017. It cost under $3.5 million new but it was small and not very ‘jetty’ with a cruise speed under 400 mph and a range of a little over 1000 miles.

        Unless you enjoy flying it yourself a small private jet doesn’t make a lot of sense. You have to hire a pilot to fly 4 people for a 2-2.5 hour flight. For 1% of the purchase price of a Mustang you can charter a Cessna Latitude and pilot and fly 10 people coast to coast.

      • MD says:

        That’s not unique.

        Search Fokker 614.

      • IronForge says:

        All they need are 30 Units Sales?

        It’s a Big Market.

      • MC01 says:

        Honda has long declined to reveal how much the Hondajet program is costing them. A very conservative $1 billion estimate was given by Teal Group in 2017 but the true costs are likely to be considerably higher as Teal chose not to include development and certification cost for the HF-120 engine which were shared between Honda and General Electric.

        Honda has deep pockets to finance what’s effectively a vanity project, but also worked under the false assumption that once you start delivering an aircraft you stop losing money while the inverse invariably happens. Right now it’s estimated when all is said and one, and assuming the aircraft and engine don’t need to go through major expensive redesigns and a profit margin of at least $750,000 on every unit sold, Honda will have to sell 1,000 Hondajet over the life of the aircraft (assumed at 30 years) to see a profit. The 30 aircraft/year figure is not so far off… if their profits are indeed that high.
        But Honda has already started to offer big discounts to sell the aircraft to big “trophy” customers like Italian food giant Barilla (registered as a very cool I-JACK). If these discounts become the norm like they are in the automotive industry Honda will lose a ton of money on the program.

        Finally allow me a consideration. The Hondajet costs as much as the Pilatus PC-12. Yes, the Pilatus is turboprop not a jet, but it also has a much roomier interior, there’s a big secondary market for it and it’s certified to operate from short unprepared landing strips, meaning it can fly literally anywhere there’s a dirt strip long enough for it. There’s a reason why Pilatus has been selling so many of them in executive configuration.
        This is to say nothing of how oversupplied the corporate aircraft market has been for a while.

        In short Honda is doing what Japanese conglomerates end up doing when flush with cash: a colossal money-losing vanity project.
        Just look up “Yamaha OX-99”. ;-)

  17. RD Blakeslee says:

    A Bill Mauldin WWII cartoon showed infantrymen Willie and Joe slogging through the mud with an airplane flying overhead. Willie says to Joe: “Give me the good ol’ terra firma!”

    Me, too.

    Built my house of wood, stuck to the ground and how long aluminum lasts in airplanes …

  18. raxadian says:

    And then people wonders why comercial aviation is a losing business.

  19. Old Engineer says:

    Sounds like NASA and their new moon rocket. Billions being dribbled on a rocket that no one wants to go someplace we’ve already been to collect rock samples we’ve already got.

    • nhz says:

      Yes, compared to that SpaceX was a breath of fresh air. Maybe some of that is already lost, difficult to judge for an outsider; having to deal with organizations like NASA won’t help ;)

  20. Xabier says:

    As this has become rather general, can anyone possibly inform me as to how much – if any – of the beautiful Spitfire that often flies overhead here in the summer and autumn months, might be original? Or would it be only the pilot? :)

    • MC01 says:

      The Battle of Britain Memorial Flight is an RAF unit which currently flies 6 Spitfires of various Marks (one Mark XIX was sold and the proceedings used to rebuild a Hurricane and acquire a Mk XVI).
      All the aircraft are original and apart from the two PRXIX which were completed after the end of the war, are all combat veterans.
      Apart from those there are about 50 other airworthy Spitfires worldwide, mostly in private hands.

      This is quite an achievement as British figher aircraft were generally built “like a racehorse” according to Kurt Tank, meaning they were designed for pure performances with everything else taking a backseat, and the bulk scrapped immediately after WWII.
      In 2012 I talked to Royal Navy veteran who served on an escort carrier in the Mediterranean in 1945-6 and he told me his final duty before being sent back was to help dump overboard “crate after crate” filled with spare engines, mostly Rolls-Royce Merlin, and other aircraft parts. Everything was brand new but nobody wanted them anymore: even the smelters in France and Italy had more scrap metal than they knew what to do with and light alloy was “cheaper than chips” in Britain at the time, so the Admiralty decided to dump everything in the sea.
      It should be somewhere between Corsica and the Isle of Elba if somebody is interested. ;-)

      • Xabier says:

        Thank you: pleasing to know that most of them were in combat.

        Always a cheering sight, and beautiful to watch their graceful movements – if the weather is right I get the display almost every day in the summer months.

        The ceiling of the back bar in the ‘Eagle’ pub here in Cambridge was signed by the pilots of WW2, also very moving.

  21. hidflect says:

    MHI was my client in Japan and getting a look inside the company was ugly. They are one of the Zaibatsu broken up at the end of the war but have long since re-agglomerated. The government lavishes funds on them to build almost anything and everything MHI wishes including useless tanks that sink in the mud. To all intents and purposes, Japan is a fascist nation as defined by state and corporations working hand in glove.

  22. Augusto says:

    At least Mitsubishi are trying to “make” something. So much of the world’s financial leadership, especially in the West, just want free money from the government via central banks to flip stocks and bonds for quick profits. Leaving nothing of value for anyone but themselves.

  23. Kasadour says:

    Correct me if I’m wrong but didn’t the composites fail on the rudder in the American Airline crash in Belle Harbor, NY?

    • Javert Chip says:

      Correct. Severe overuse of the rudder caused the composite lugs attaching the tail to fail (plane was doomed at this point)

      Additionally, quickly thereafter, the plane was in a flat spin & the 2 engines separated from the airframe.

      Bad day at the airport.

      • Kasadour says:

        Seriously? A flat spin? How incredibly horrific it must have been to be on that flight in its final moments. Those poor people.

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