By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Cross posted from Testosterone Pit.
Aircraft maintenance was a highly paid blue-collar job that required education, training, manual skills, and brains. It was one of the perfect American middle-class jobs with generous healthcare, retirement, and vacation benefits; and free flights! They were working for icons like Delta, American Airlines, Continental, TWA, or Pan Am. Icons indeed!
After endless rounds of Wall Street engineering and tough competition, they all went bankrupt, some of them twice. High wages and generous fringe benefits of maintenance mechanics got whittled down. Then the actual jobs, these well-paid blue-collar specialty jobs that required a lot of training and brains, the bedrock of the American middle class, were outsourced to cheap countries, including China.
Specifically to one company. It started in 1997 when Boeing announced that it would acquire for $11 million a 9.1% stake in an outfit that had opened for business the year before: Taikoo Aircraft Engineering Co. (TAECO), based at Gaoqi International Airport in Xiamen, China. Its largest shareholder is Hong Kong Aircraft Engineering Co. (HAECO); among the other shareholders are Cathay Pacific and Japan Airlines. TAECO does “heavy maintenance” on aircraft, a labor-intensive job that takes around four weeks per plane – if you have enough mechanics. And cheap labor makes a huge difference for Boeing and its airline customers.
I should probably disclose that my parents died in a Boeing nearly 40 years ago. So, for me, there is an extraneous exclamation mark behind every flight-safety issue. Turns out, it is a flight safety issue.
On Thursday, Syndicat ALTER, one of the unions representing the pilots of Air France, complained about an incident involving aircraft maintenance. On April 7, an Air France Airbus 340, flying from Paris to Caracas, had to be diverted to the Azores “for technical reasons.” Various issues had marred the flight, from overflowing toilets to the failure of two high-frequency radios. According to ALTER, it was the aircraft’s first commercial flight after heavy maintenance had been performed by TAECO.
Air France denied that the “technical problems” were in any way, shape, or form linked to the maintenance work done in China. The spokesperson defended TAECO, a company that is “internationally recognized and works for all major global airlines.”
The union retorted that this incident was “but the latest in a too-long series” and pointed at three other problems that Air France had run into with TAECO, one of them affecting an Airbus, the others Boeing 747s. In one incident, a Boeing 747-400 was grounded in 2010 after someone discovered that three weeks earlier, TAECO had repainted portions of the plane using flammable paint that didn’t meet heat certification criteria. In another incident there was an issue with certain parts of the wing.
Then in November 2011, an Airbus 340 was grounded in Boston, after someone discovered that about 30 screws were missing from a “large protective panel” between the fuselage and wing that serves to reduce drag. The plane had flown for five days in that condition, after heavy maintenance had been done by TAECO. ALTER described the incident in an internal document that was then leaked. Air France tried to step out the brushfire. The missing screws were supposed to hold down a piece that “was part of the outer covering of the wing and at no point was flight safety compromised,” the company’s spokesman said at the time.
A union spokesman wasn’t so nonchalant. “Deplorable,” was how he described the oversight at the TAECO plant. “Pieces of an aircraft should never simply go missing during maintenance,” he explained. “It is not the first time this has happened either.”
A month later, Air France buckled and suspended TAECO from performing heavy maintenance on its aircraft. Then, quietly, it restarted using TAECO, “for purely financial reasons,” the union pointed out. The addiction to cheap labor, regardless of what the costs.
So on Thursday, given the “serious incidents involving maintenance carried out in the workshops of TAECO,” the union demanded that management “put a definitive end to the outsourcing of maintenance” of long-haul aircraft “before one incident too many occurs.”
These kinds of incidents are not made public, neither by the airlines nor by TAECO. They would rather keep them quiet. And who knows how many times they succeed. They bubble up only if an interested party – such as a union whose pilots are impacted – finds out about it and writes up an “internal” report that then gets leaked. The mainstream media don’t appear to be eager to dig them up either, though it would help keep airlines honest about outsourcing maintenance to countries where people have trouble with the basics, like reading voluminous English-only maintenance manuals and making sure all the screws are in place.
There could not possibly be any clouds on the horizon with the Dow and the S&P 500 setting all-time highs, while the German DAX is getting there, and with the Japanese Nikkei soaring. But just then, a deeply connected representative of the global real economy spoils the rosy scenario. Read….. “During The Last Crisis, We Had China,” Now We Have No One