Located in the Zhuhai Free Trade Zone, MTU Maintenance Zhuhai is a 50/50 joint venture between MTU Aero Engines and China Southern Airlines. It’s a one-of-a-kind union, but one that President and CEO Jaap Beijer says works well. “Being a 50/50 joint venture is quite unique; normally one goes more in, like at 51 per cent,” he tells The CEO Magazine. “But I’m glad they did 50/50 because then both companies feel dedicated to MTU Maintenance Zhuhai.”
It’s a dedication that has spanned two decades already. The company just celebrated its 20th anniversary last year and has much to look forward to, as Jaap reveals its contract has been extended until 2051 thanks to stellar performance. “MTU Maintenance Zhuhai has grown by double digits roughly every year, except during the pandemic,” he says. “And the company has grown to become the biggest narrow-body MRO in Asia and hopefully, soon, the world. It’s a big success story for shareholders.”
A market leader in China, MTU Maintenance Zhuhai currently specialises in the maintenance, repair and overhaul of IAE V2500-A5 and CFMI CFM56-3, -5B and -7. Since 2020, this has expanded to include LEAP and, in 2021, PW1100G-JM. The shop is truly state of the art, equipped with a high-tech machine pool and a modern test cell that can accommodate engines up to 150,000 pounds of thrust.
Jaap started with the company in 2018 and since then, he says it’s been the ride of a lifetime. “I think a roller-coaster is the best way to describe the last three years,” he grins. “When I started, MTU Maintenance Zhuhai had a good set-up. We planned for 2019 and it ended up being the best year ever in the history of the company. When we started planning for 2020, we thought it would be even better.”
THE GOOD FIGHT
Then February came. Millions across Asia were celebrating Chinese New Year. Jaap himself was on a holiday in Vietnam when the world suddenly came crashing down. “Since that day, it’s been a fight against the virus,” he says.
That fight began with Jaap finding his way home to Hong Kong and once he returned, he got straight to business. “When I came back, we quickly set up a pandemic team. We called it the coronavirus prevention team,” he shares. “I am not Chinese, and I do not speak Chinese. Even more, I’m not 100 per cent familiar with Chinese culture. So we set up a Chinese management team that did a really great job on carrying out preventive measures. They made it so our employees could come back to work earlier than expected.”
MTU Maintenance Zhuhai was shut down for two weeks before it received special permission from the government to reopen. “We opened immediately and never had to lay anyone off. We did reduce their hours but, overall, our employees didn’t worry or feel like their jobs were in trouble at all,” Jaap says.
“We never gave up on our vision for growth. We still invested in our future.”
This was possible thanks to MTU Maintenance Zhuhai’s open and transparent communication. “We talked to our employees and the management team. We let them know that their future was secure. We told them to stay calm and trust that everything was going to be OK; that this was something we would all get through together.”
The prevention team was also great at keeping everyone safe and healthy, Jaap says. “They had daily calls with the families, providing recommendations to stay safe in public, such as wearing masks. And, knock on wood, we have not had one single COVID-19 case at MTU Maintenance Zhuhai; not one, which is pretty amazing.”
While the team managed to stay healthy and well, the business was another story. “COVID-19 was a pretty significant blow for us; the Asian market was hit very hard. We were hit hard and our customers were hit hard,” he says. “We were down 30 per cent and while 2020 was a difficult year, what’s important to me is that we never gave up on our vision for growth. We still invested in our future.”
Thanks to the wise choices made, MTU Maintenance Zhuhai is already back on track. “Now 2021 is looking even better. We’re not 100 per cent back to normal, but we’re getting there. And our growth projects are going strong. It’s exciting and has me looking forward to everything this year will bring.”
Going forward, Jaap is taking with him lessons learned from the pandemic; one cannot come out unscathed from a crisis of that magnitude. And while it challenged him, he says COVID-19 also changed him and his leadership for the better.
“Leadership is most important in a crisis,” he says. “Leadership is very easy when everything is great and going along fine. But when you go through a pandemic, that’s when the real leadership starts because then you really need to communicate clearly to showcase strengths and instil confidence. That’s when you have to show your team the way out.
“During this time, I learned to really listen to people; to listen to their needs and to the experts to find a way out.”
“When you go through a pandemic, that’s when the real leadership starts.”
This confident and empathetic leadership is what will help MTU Maintenance Zhuhai soar to new heights and achieve its growth targets. “At the moment, we’re spending a lot of money on growth because I believe in growth, and I believe in the company,” Jaap says.
“Luckily, with the board, we managed to pick investments in the next three to five years that I’m very happy with. Currently, we are the biggest narrow-body shop in Asia. We want to become the biggest in the world, and that’s hopefully where we’ll be in the next five years.”
To tackle this lofty ambition, Jaap says MTU Maintenance Zhuhai expanded its shop by 50 per cent in 2019, enabling it to induct 50 per cent more engines. Additionally, a second plant will be built not far from the old facility and will help cope with predicted growth. “Our portfolio has expanded to include the newest engine types; the LEAP and the PW1100G-JM, which are used in narrow-body engine aircraft,” he explains. “We are very happy and excited about this as I believe this makes us one of the only shops that has both engine types.”
With this kind of growth, it’s important for MTU Maintenance Zhuhai to stay connected with its people. “We are going through a whole education session with our employees. MTU Maintenance Zhuhai has exceeded the magic number of 1,000 employees. That means we have grown from a small company to a big company.”
To accommodate the needs of the growing workforce, the company is investing in a training centre. Set for completion this year, the centre will train upwards of 100 Chinese engineering graduates in aircraft engine mechanics per year.
“We need to have management teams that can deal with this surge of new talent,” he says. “As such, we are now in the midst of a big education period for our managers, senior managers and directors. They go through a whole experience on how to lead within big companies, how to set goals and how to talk to their people.”
“We’re one of the first companies in our market that has an app to communicate with customers.”
A personal highlight for Jaap, however, is MTU Maintenance Zhuhai’s digitalisation endeavours. “I love digitalisation,” he says. “We are setting up new systems for everybody. We have face recognition software included in our processes. We have a new robot fleet coming in, and we’ve set up a digital flow line.”
MTU Maintenance Zhuhai also developed its first app; a great achievement in its own right, but one that also makes the shop a stand-out among its competitors. “We’re one of the first companies in our market that has an app to communicate with customers, mainly because our customers are worldwide,” he shares.
“Now, if they have a problem, they can call us with the app and take pictures of the problem with the engine and we can answer directly. We can send a crew over there with the material they need and have that all set up via the app. It’s exciting, and our customers are excited about it because this is a new way to go.”
There’s also another new way forward as MTU Maintenance Zhuhai embraces sustainability. “We are in the airline market and sustainability in airlines tends to be a bit difficult with the environmental impact it has,” Jaap says. “Still, I think airlines and the manufacturers are doing a lot to bring the environmental risk protection up and risk down. And we do the same.”
For example, the company produces much of its own electricity with solar panels on its roof. And recently, it has begun looking into alternative fuels that have a gentler impact on the planet. “Our buildings are also built with the best, new standards,” he shares. “I feel very confident that sustainability is an important topic for MTU, and we are always trying to do our part.”
For business people coming into Asia, Jaap explains that there’s just one rule: “Shut up for the first 100 days,” he says. “Typically, business people come in and want to run, they want to do, they want to change things. This works in Western countries, but in Chinese culture, it’s ineffective. Here, they need to start by talking to people and listening. They need to gain their trust. Once they do, then they can start digging in and sharing ways to improve.”