Finnish aviation industry faces big changes

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By Jyri Raivio
     
      Tuisku, Viima, Pyry, Myrsky, Pyörremyrsky, Tuuli, Vihuri, Vinka, PIK-20, Redigo.
     These are all familiar names - at least for Finnish aviation buffs.
     The Finnish aviation industry has a glorious past, including a number of legendary aircraft. Plane manufacture has never been a very big branch of industry in Finland, but over the years some very good engineering work has been done, and some fine planes have been built.
     All of this seems to be far in the past now. The last Finnish-built mass-produced plane flew over two decades ago, and it may well be that there never will be a new one.
     "We would have the technical capability of designing and building a Finnish plane, but the commercial capability is lacking", says engineer Jaakko Harjumäki. He chairs a working group that drew up an extensive interview-based report on the aviation industry in Finland. This report for the International Labour Organisation was made public at a seminar held in Espoo last month.
     The report does not mention the idea of manufacturing a Finnish plane at all. However, it does offer a number of ways in which the industry could maintain, and possibly even improve its current position.
     
The aviation industry is a key sector of business around the world. The 100 largest manufacturers in the field employ nearly three million people, creating an annual turnover of nearly 500 billion US dollars (EUR 330 billion).
     Growth prospects are very bright, especially on the civilian side, where two large manufacturers have, in practice, sold their entire production all the way through 2012. Production has remained in large industrial countries, and significant numbers of jobs have not been exported to countries of low labour costs.
     The aviation industry has always been small in Finland. There are 3,300 employees, and an annual turnover of EUR 420 million - about the same as the food manufacturer Raisio.
     
The field is dominated by three companies: the airline Finnair, the armaments manufacturer Patria, and the electronics company Insta, which employ 90 per cent of the population in the field in Finland, producing 80 per cent of its turnover. Finnair's figures include maintenance work.
     Insta is a Tampere-based defence electronics and automation company. It developed what has been said to be the world's best communications equipment for maintaining contact with the Finnish Air Force's Hornet jet fighters. However, the device never went into production because it was not compatible with the systems of NATO.
     The state-owned weapons manufacturer Patria is the key player in the Finnish aviation industry. Patria is strong because the company has a nearly symbiotic relationship with its most important customer - the Finnish Defence Forces. Aviation employs about 1,000 of the company's 2,500 employees, bringing in a quarter of the EUR 450 million turnover.
     
Patria has, partly through its own efforts and partly through compensation deals linked with arms purchases, managed to become a subcontractor for large international companies. At the company's assembly plant in Jämsä, Patria manufactures quite large components for aircraft of the European manufacturer Airbus, and parts for the NH90 helicopter.
     However, the continuity of subcontracting work is somewhat uncertain at the moment. Airbus is putting its making considerable changes in its production, and Patria needs to be able to offer risk capital and design input for any new projects. It will not be able to compete as a mere manufacturing subcontractor - not with Finnish labour costs being what they are.
     The next 8-10 years appear to be secure, thanks to orders from the Finnish Defence Forces. However, the coming years are a time in which something new needs to come up.
     The ILO report emphasises narrow areas of top expertise, where Finnish companies could offer professional skill in international joint ventures. Insta, Patria, and Nokia could offer know-how that can be utilised both in the development of unmanned aircraft and air traffic control systems.
     It is possible that an airplane might be built some day - an unmanned UAV, whose use is becoming more common all the time.
     
Lack of personnel could prove to be a major problem. The lure of the field has declined, and not only in Finland.
     Finland is also the only member of the European Union not to offer training for mechanics that meets the new EU standards.
     Aviation authorities have not given their approval to a single vocational school that trains aircraft mechanics, even though the first applications were sent already in 2001.
     The European Aviation Safety Agency EASA has sharply criticised the Finnish authorities for this shortcoming.
     
Helsingin Sanomat / First published in print 2.3.2008


Links:
  Patria Group

JYRI RAIVIO / Helsingin Sanomat
jyri.raivio@hs.fi