Companies that supply planes and engines to commercial airlines are about to see a boom in business unlike anything that the industry can remember. There are more customers than ever before for airline flights, and alongside that, engine technology has taken a big leap forward. That means unprecedented investment, and Connecticut is at the epicenter of that change.
Joe Sylvestro is in charge of manufacturing operation at jet engine-maker Pratt and Whitney. He's a man with a challenge on his hands. "This year," he said, "we'll deliver almost 600 engines, both large commercial engines and military engines. Over the next five years, we expect that number to go to more than 1,500 engines per year."
A lot of that huge increase in business is down to the geared turbo fan engine, what Pratt and Whitney calls PurePower. What the geared turbo fan does is save fuel -- lots of fuel. "In times past," Sylvestro said, "as you bring a product along, you might invest $100 million, $200 million to get another half a percent, one percent. So for Pratt and Whitney to introduce a product that's got a 14 percent better fuel burn is just incredible."
It must be said, the geared turbo fan isn't alone. General Electric is developing its LEAP engine, and plane makers are introducing new lighter and more durable composite bodied aircraft. That all adds up to a revolution in efficiency, which means -- the holy grail of commercial aviation -- lower fuel costs. So even though it might seem to anyone who flies regularly that the airlines have less money than ever before, they're actually investing in new planes at an unprecedented rate.
For Connecticut, the ramp-up is a whole new game, because the way engines are made has radically changed in the last few decades. "Roughly about 87 percent of the value of the jet engine is probably in the supply chain," said Bob Torrani. He is in charge of advanced manufacturing for the Connecticut Center for Advanced Technology, and his clients are those small supply chain companies. "The component parts," he said, "the small machined parts, the tubing, the electrical systems -- all those parts are in the supply chain."
Hundreds of companies are doing what Pratt used to do itself: making engine parts. That means most of the process innovation, efficiencies, and investment for the ramp-up must be achieved by these companies, some of them no more than mom and pop shops. "The challenge," Torrani said, "is going to be in terms of stepping up to the higher demand. It's going to require, in some cases, capital investment, and it's going to also require the skilled workforce. That, in the short term, could actually be the limiting factor."
That the majority of Pratt's supply chain is here in Connecticut is really a historical legacy. Pratt's Sylvestro cheerfully admitted he'll go anywhere in the world to source the right quality parts at the lowest price. "There's no shortage of those that want to," he said, "so, really, our challenge is vetting. Do we think that they can? We have a very robust, what we call 'production readiness' process that we're in right now."
Those supply chain companies confirm that's true. "I would say they're in here several times a month, and sometimes every week, sometimes multiple times in a week," said Jeff Paul, co-owner at Whitcraft in Eastford. Whitcraft is one of Pratt's more sizeable Connecticut based suppliers, making sheet metal parts for the engines.
Indeed, as Paul walked me down the hallway on the way to the shop floor, we spotted a Pratt representative, deep in conference with one of Whitcraft's planning managers. "We've never had so much development work in this facility," said Paul. "What makes it especially challenging is that in development, parts change. We have to go back and redevelop a new process, and we have to do that while hitting their engine certification schedule." They must also plan to reduce the cost of the parts that they're making by five to seven percent per year, a standard requirement from the big manufacturers.
Paul showed me around the shop floor at the Eastford facility. "What we are going to see today -- a year and a half from now, it's going to look all different. You're going to see a lot of things moving around. Last week, there were racks of tool right here; they're all gone, because we're trying to realign our operations in the most efficient way that we can in anticipation of what we're going to be making one year, three years, [or] five years from now."
The shop floor was organized in work cells, and one of them was devoted exclusively to developing new parts for test engines. "These folks in here are highly skilled mechanics," Paul said, "who can work with a minimal amount of direction and figure out working with the engineers and the tool designers how to make the parts."
Here's the tricky thing for Whitcraft about all this exciting development work: "Typically," Paul said, "we're selling these parts right now at a loss, and the reason is we have an unprecedented number of competitors out there looking for this business."
While they're taking a loss in anticipation of a big future payday, they're also experiencing a slow down in their usually reliable revenue generators: military engines and commercial spare parts. That all adds up to a huge financial squeeze for suppliers and its driving a new phenomenon in the supply chain.
"Consolidation is something we are hearing more about," said Mark Paggioli. He works with supply chain manufacturers for CONNSTEP -- a nonprofit that helps companies to modernize their work processes. "We are hearing from some of our clients too that they're looking at other people in their space -- that maybe now is the right time to acquire someone else."
Whitcraft itself has a scale to be on the right end of that equation. It's acquired five other companies in the last year. The coming boom in commercial aerospace may mean a fundamental change in the nature of Connecticut's aerospace industry.