EDITORIAL | Despite SpaceJet Failure, Continue Nurturing New Businesses

Mitsubishi Heavy Industries Ltd. (MHI) has decided to abandon the development of SpaceJet, which would have been the first domestically produced Japanese jet airliner, and exit the passenger jet business.

Development of the SpaceJet project was frozen in 2020. Since then, the company has judged that even in the future it would be difficult to make the project profitable. Yet, it is extremely disappointing that the development of the "Hinomaru (Rising Sun) Jet" has been suspended. There were great expectations for it in the public and private sectors.

What Happened

Design changes were made one after another to cope with climate change and other issues. Meanwhile the target date for deliveries was postponed six times. MHI’s inspection system for the SpaceJet project also proved inadequate. As a result, the company was unable to obtain the "type certification" required for commercial operations.

Since around ￥50 billion JPY ($371.5 million USD) in public funds were spent on the aircraft’s development, a thorough review of the entire project is now called for. Furthermore, hopefully the public and private sectors will continue to work together to acquire the technologies and know-how required for the resumption of domestic passenger aircraft development in the future.

Prolonging the SpaceJet Project Timeline

The decision to pursue commercial development of the SpaceJet project was made 15 years ago. However, repeated design modifications were made, including for the main wings and other key components. Each of these changes slowed down the development process.

The prolonged development timeline caused the innovative technology involved to lose its competitive edge. In the interim, project costs ballooned from the initial projection of ￥150 billion JPY ($1.1 billion USD) to the ￥1 trillion JPY ($7.5 billion USD) level.

MHI also was excessively confident about its own technology and too cautious about adopting advanced foreign technology. Although foreign engineers were brought in during development, there was inadequate coordination between them and in-house engineers.

Broad Domestic Impact

Moreover, regrettably the delays in commercialization caused the replacement several times of the head of Mitsubishi Aircraft Corporation, the MHI subsidiary in Aichi Prefecture handling the development of SpaceJet. These changes at the top in turn bred confusion. This and the other problems all merit our reflection.

The impact on local industry in the Nagoya region is also significant. Around one million different parts were to be used in the aircraft, with the manufacturers representing a wide range of related industries. Consequently, Aichi Prefecture was looking to the aircraft industry to become a pillar of its next-generation industrial base that would in turn lead to local economic revitalization.

Now, a new industry catalyst needs to be found to substitute for SpaceJet.

Spreading the Risk in Future Projects

In the global aircraft industry, the evolution of technology is moving at an ever faster pace due to progress in the area of IT and other factors. For that reason, and because of the huge development costs, international joint development has become the mainstream approach to spreading the risks involved while developing new aircraft.

Japan's manufacturing industry also faces another major challenge. For large development projects that require advanced technology, it is essential to empower development sites to make on-the-spot decisions quickly. Comprehensive project management is also needed in order to prevent costs from snowballing.

The SpaceJet project may have ended in failure, but we must preserve our willingness to accept the challenge of nurturing new businesses. They are our promise for future growth. If Japanese companies become paralyzed through fear of failure, we will not be able to increase Japan's earning power.

(Read the editorial in Japanese.)

Author: Editorial Board, The Sankei Shimbun