111 510 510 libonline@riphah.edu.pk Contact

Tunisia continues the revolution – in aerospace

When European plane-maker Airbus receives a juicy contract, such as this year’s 234-plane deal from Indonesia’s Lion Air, cries of joy ring out in Toulouse. But they’re also punching the air in Tunisia. The home of the Arab Spring has grown wings in the past four years, becoming the second North African destination for aerospace investment after Morocco, despite ongoing political and social turbulence.

At an industrial estate on the outskirts of Tunis, a half-hour from the airport where dictator Zine El Abidine Ben Ali boarded a plane into exile in 2011, the company that makes the front part of Airbus planes produces fuselage pieces. Aerolia’s “beautiful adventure” in Tunisia, as spokesman Philippe Le Gregam calls it, began in 2009, the year Airbus parent company EADS created a subsidiary to produce airplane noses and fuselages.

Within days Aerolia had signed a deal with the Tunisian government to establish a plant in Tunis, wooed by a low-cost, business-friendly environment. Despite opposition from French unions who protested over jobs being lost to France, a spanking new factory was built in under two years. But the ribbon had barely been cut on the 28,000-square-metre facility at M’Ghira, in the southern Tunis suburbs, when the revolution began.

As the protests over Ben Ali’s corrupt, repressive 23-year rule ripped through the country Aerolia was left considering its future in a country whose undemocratic leader France had backed until he fled. Would French and other foreign firms become targets? Keep calm and carry on, was the company’s motto.

Le Gregam recalls a young worker asking him: “What’s it like to live in a democracy?” “The alarm clock still goes off at 6:30 am,” was his reply. For a week after Ben Ali’s departure, as the country teetered on the brink of anarchy and looters ran amok, the factory remained closed. But the site escaped unscathed. Ouassim Berraies, general manager of Aerolia Tunisia, says most subcontractors managed to meet their commitments to European clients.

Successive interim governments also kept their word, including the Islamist-led government that has been in power since October 2011. With many foreign investors still adopting a wait-and-see approach to Tunisia, after last year’s storming of the US embassy by Salafi Muslim demonstrators and February’s assassination of an opposition politician, the government is keen to send the right signals.

Aerolia employees accuse media in France of exaggerating instability in the small Mediterranean nation. “The image conveyed by foreign media does not correspond to the reality,” says French production manager Olivier Coeurdray, who moved to Tunis at the start of 2013 with his wife and two young children.

There is a lot riding on Aerolia for Tunisia and vice-versa. The company employs around 600 people making parts that are shipped to France for assembly. Seven industrial and logistical partners, including Germany’s ThyssenKrupp Aerospace, have followed Aerolia to Tunis, bringing total employment at M’Ghira to around 1,300. The jobs are mostly manual or semi-skilled but the plant gives the country a foothold in a multibillion-dollar business that has bucked the trend of the global economic crisis.

Airbus announced Thursday at the Paris Air Show that it had nearly hit its 2013 order target at the half-year mark. As it prepares to begin production of its new long-haul A350 jet suppliers like Aerolia are looking forward to increased business. That means more jobs, both in France and North Africa. Aerolia has defended its decision to relocate a part of its production offshore on the grounds that keeping costs down helps retain business.

“It’s what allows our clients (Airbus and Bombardier) to find new clients,” Le Gregam argues. The company would not be drawn on its wage costs in Tunisia, where the minimum legal wage is 320 dinars (197 dollars) per month. Besides the cost factor, which has also seduced French car parts makers, Tunisia also boasts the best-educated workforce in North Africa.

The challenge now, says Berraies, is to manage their expectation that political freedom would lead to economic emancipation. “We have to adapt to this new reality with more communication and better listening skills. You no longer hear bosses saying ‘You must do this.’ Now they say: ‘You must do this because…'”

Clare Byrne, "Tunisia continues the revolution – in aerospace," Business recorder. 2013-06-22.
Keywords: Social sciences , Economics , Economic crisis , Political freedom , Government-Tunisian , Democracy , Mass media , North Africa