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Editorial: SpaceJet freeze reveals pattern of hubris, miscalculation at Mitsubishi Heavy

Mitsubishi Heavy Industries Ltd. has effectively frozen its "SpaceJet" program to build Japan's first-ever domestically developed passenger jet. The Japanese government has pumped some 50 billion yen (about $477 million) into the SpaceJet (previously called the Mitsubishi Regional Jet), so the aircraft could certainly be called a national project. So why has it stuttered to a halt? An examination of this question is absolutely necessary.

    The immediate reason for the program freeze is the coronavirus pandemic, which has obscured the outlook for demand for new commercial aircraft. However, the company had already extended the delivery date for the first SpaceJet an astounding six times due to design and production issues.

    Mitsubishi Heavy has said that, while development is on hold, the firm will continue work to get the necessary certification to enter mass production, and monitor how demand develops going forward. That means, though, that the project's financing will be vastly reduced and there will be no test flights. The company has also given no hint as to when deliveries will begin.

    However, perhaps the core cause of the program freeze is that Mitsubishi Heavy has overestimated its own technological and management capacities.

    The company has long been developing and building heavy equipment like fighter planes and tanks for Japan's Self-Defense Forces, and also manufactures main wings and fuselages for commercial aircraft. However, making parts based on preset designs as a subcontractor is very different from developing and building one's own products.

    The commercial aircraft industry is moving steadily toward greater and greater division of labor across borders, with different parts of a plane built in different places by different contractors. That means the aircraft manufacturer must be able to coordinate the activities of multiple suppliers around the world. In the case of the SpaceJet, the design and specifications for multiple components were changed repeatedly, highlighting Mitsubishi Heavy's shortcomings as a project control tower.

    There were also problems with the development phase. The Japanese government and Mitsubishi Heavy were determined to make the jet an all-Japan project, and sought to make the most of the company's existing staff. However, certification procedures proved daunting, and Mitsubishi Heavy turned it over to a team of mostly foreign staff with experience and knowledge of the process. This was not enough to scrape back the lost time, though.

    In this day and age, a company cannot expect to come out on top in international competition unless it puts together the best possible teams of people, regardless of nationality, gender or age. Mitsubishi Heavy should rethink how to use its human capital.

    The company has been through a similar failure before. In 2011, it took an order to assemble a large passenger ship, but missed the delivery deadline and ended up taking a loss on the contract. Mitsubishi Heavy decided that it could handle the order based on its previous work, but it could not meet the demands of the customer, and the assembly plant itself descended into chaos.

    An internal investigation at the time concluded that the company had overestimated its own capabilities and had an overoptimistic attitude, leading it to the hasty decision to take the order. The report also criticized the management quality of the department overseeing the project.

    The aircraft sector's reach is very broad, touching many manufacturers, so what happens in the industry has far-reaching consequences. If Mitsubishi Heavy ends up dropping the SpaceJet altogether, both it and the Japanese government would bear a heavy responsibility. The causes of the project's problems need to be brought to light, and the lessons applied going forward.

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