MHI Canada Aerospace achieves greater efficiencies in Ontario
Date: August 28, 2013
Source: Ontario Investment and Trade Centre
Japan-based Mitsubishi Heavy Industries (MHI) decided to build an aircraft components assembly factory in Ontario because it wanted to be close to its client, Bombardier Aerospace. But MHI quickly learned there were many other advantages to building its business in Ontario, including cost-competitive supply chain solutions and easy access to skilled aerospace industry workers.
It takes a lot of manufacturing, logistical and operational resources to build and transport aircraft wings and fuselage. MHI needed to reduce overall business costs, risks and transportation lead time for the large aircraft components it was making for Bombardier Aerospace.
MHI is a global brand in machinery manufacturing, with a vast product range that includes rocket launchers, ships, power generators, aircraft, and industrial machinery such as hydraulic equipment and injection moulding machines.
MHI helped develop and deliver production models for Bombardier’s Challenger 300 and Global Express, high-performance jets designed to meet the needs of business travellers. But building parts in Japan for Bombardier’s planes was proving to be costly and high-risk for MHI, primarily because of the long distances these large components needed to travel before reaching Bombardier’s plants in Canada.
In September 2007, MHI opened MHI Canada Aerospace, the company’s first independent subsidiary outside of Japan in more than 20 years. MHI chose to build its new Canadian facility in Ontario, where Bombardier has several facilities.
Proximity to Bombardier was the main reason why MHI decided to build a 95,000-square foot plant in Ontario, says Harry Machiyama, president of MHI Canada Aerospace. But it soon became clear that being in Ontario offered more advantages than merely being close to Bombardier.
A robust aerospace industry with skilled workers and solid supply chain
Ontario boasts a $6.5-billion aerospace industry, with more than 22,000 skilled workers and 350 global aerospace companies that include several OEMs, Tier 1 integrators, and Tier 2 and 3 suppliers.
Being part of Ontario’s well-established aerospace cluster has made it easier for MHI Canada Aerospace to find the talent and expertise it needs to manufacture high-quality products, and to implement superior, cost-competitive solutions across its supply chain.
“There is a history of aerospace industry in Ontario, so we can easily get access to resources, including people and supply chain,” says Mr. Machiyama, whose company created about 100 jobs when it opened in Ontario.
“We can easily get skilled aerospace mechanics, inspectors, engineers and also management staff here in Ontario. We can easily get parts, production facilities and engineering support, with shorter lead times and lower transportation costs.”
These advantages have translated to reduced business costs and greater manufacturing efficiencies for MHI Canada Aerospace. As a result, in 2011, MHI decided to move wing assembly work for Bombardier’s Global Express aircraft from Japan to Ontario. MHI Canada Aerospace relocated to a 267,000-square foot facility – close to three times the size of its original site – and boosted its workforce to about 460 people.
“Considering the benefits of production in Ontario, we decided to transfer the job from Japan to Ontario,” says Mr. Machiyama. “Both the volume and content of our business keep on growing.”
Ontario’s extensive network of aerospace suppliers has also made it possible and more cost-effective for MHI Canada Aerospace to start procuring its own parts, which had previously been supplied by its Japan-based parent company, says Mr. Machiyama.