Jane Chi, chair of Chaheng Precision
The Heroine of Taiwan’s Aviation Industry
Growing up, she dreamt of becoming a knight in shining armor defending the weak and downtrodden. As an adult, she worked to save mold maker Chaheng Precision Co. Ltd. from bankruptcy, transforming the conventional company into a Tier-1 supplier for the world’s leading aircraft makers.
The Heroine of Taiwan’s Aviation IndustryBy Kuo-chen Lu
From CommonWealth Magazine (vol. 618 )
In the decades-long history of Taiwan’s aviation industry, only one woman has managed to lead a company into the exclusive ranks of Tier-1 suppliers for the international aviation industry. That woman is Jane Chi, chair of Chaheng Precision.
Chaheng, which is currently preparing its IPO, counts among its customers leading aircraft engine makers such as France’s Safran Aircraft Engines, formerly known as Snecma S.A., General Electric (GE) in the United States, and Rolls Royce in Britain. In contrast to its industry peers, Chaheng does not need to depend on Taiwan’s leading aircraft and engine manufacturer, the Aerospace Industrial Development Corporation (AIDC), a former state-owned listed company, to land high-profile contracts abroad.
Chaheng is also the first Taiwanese aviation company to allow female technicians to operate machinery on the frontline; more than 40 female technicians work on the production line. When Chi convened an investor conference in Taipei on March 7 to discuss the upcoming IPO, all of the executives present were women, a rare sight in the male-dominated, technology-driven aviation sector.
Why does Chi recruit so many women? It is because she believes that women excel over men in many areas that are crucial in the aviation industry. “When it comes to attention to detail, precision, taking responsibility and power of execution, women outdo men. Therefore, I recruit a lot of women; we are the aviation business with the most female employees,” says Chi.
One year, Chi recruited 30 recent graduates of overseas Chinese, all women, to work at the company. When she assigned these technicians to operate machinery directly on the production line, the other workers protested and threatened to strike. Chi did not budge an inch, telling them, “If you want to discuss work with me, you will see that I am tougher than anyone else. If you don’t want to accept this, you can leave; we are playing by the rules.” Chi compares her unrelenting resolve to the hardness of an aircraft engine blade. The female technicians Chi hired from abroad many years ago have meanwhile advanced into leading positions in the production department.
From Assistant to Chairperson
Twenty years ago, Chaheng was a mold manufacturer on the brink of bankruptcy, and Chi had no knowledge whatsoever of the aviation industry. The original shareholders asked Chi to join the company to take care of administrative matters such as bookkeeping.
Chi told them that the company needed a capital increase to ensure its survival. She suggested that the company might stand a chance only if it transformed and entered the aviation industry. But after years of losses, the shareholders were not willing to risk slipping further into the red, so the former office assistant took the helm herself. Chi, who by now had worked her way up to the position of assistant manager, spearheaded the company’s transformation.
Although Chi had no background in aviation or technology, and did not even know where to look for customers, she firmly believed in the government’s prediction that aviation was an emerging industry with a bright future. So she bravely took the first step into the unknown.
In Chi‘s defense, we could say that she threw caution to the winds because she was unaware of the potential risks. Since she had heard that the AIDC was the bellwether of Taiwan’s aviation industry, she drove directly to the AIDC headquarters, only to realize upon arrival that she had no idea whom to ask for a meeting. It took a while before she understood that she needed to skim the tender notices in military newspapers and submit tenders to be able to do business with the AIDC.
Despite being an aviation industry outsider, Chi went ahead, eventually pushing open the doors to the AIDC. In the beginning, Chaheng engaged in rough front-end processing of engine blades, but its business continued to grow over time, even winning an excellent supplier award from the Ministry of National Defense along the way. However, since Chaheng depended on participation in competitive tenders to win contracts, it often faced cut-throat competition from rivals who aggressively lowered their prices to prevail.
By 2005, Chaheng had done business with the AIDC for eight years, continuously boosting revenue yet failing to turn a profit. Unwilling to prop up the company with more money out of their pockets, the original shareholders decided to pull the plug. Rather than giving up, Chi sold her house and took out a loan to buy Chaheng, becoming the largest shareholder and taking over as chairperson.
Going Over the Head of AIDC
Chi asked herself a simple question: Most civilian aircraft are made by Boeing or Airbus, and most aircraft engines are manufactured by GE and Rolls Royce. Why should Chaheng have to work with the AIDC, which produces neither aircraft nor aircraft engines, to land orders with international aviation customers?
Her answer was to talk directly with Safran Aircraft Engines, telling the French aviation giant that Chaheng was planning to develop its own processes in a bid to win Safran orders.
“The first sentence that they said was ‘This is impossible for you’, ‘’ recalls Chi. “Give me 18 months. You only need to give me the order if we can get it done, so you will have nothing to lose," Chi told them.
Most civilian aircraft are made by Boeing or Airbus, and most aircraft engines are manufactured by GE and Rolls Royce. Why should Chaheng have to work with the AIDC, which produces neither aircraft nor aircraft engines, to land orders with international aviation customers?
Safran gave Chaheng a chance. The first thing Chi did was rush to Taichung to buy a multitasking lathe with 4-axis machining from Victor Taichung Machinery Works Co. Ltd., a maker of CNC machine tools. Competitors around the globe were using lathes with five-axis machining that cost NT$60 million per piece. Chi knew she needed to produce the same quality at a lower cost if she wanted to squeeze out competitors. On top of that, her company would have to be certified by large international companies.
She bought a lathe with four-axis machining for NT$6 million and modified production processes accordingly. She also hired several AIDC retirees who were familiar with business certification requirements and procedures.
“Jane Chi is really awesome; she managed to turn a lathe with four-axis machining into one with five-axis functions,” remarks Bert Huang, chairman of Victor Taichung Machinery Works, not hiding his admiration for Chaheng’s ability to develop its own unique equipment and methods for use in machining centers.
Certifications of staff, machinery, materials, processing methods and, above all, technology are crucial for access to the international supply chain in the aviation sector. Aware that it takes incentives to attract and retain skilled technicians, Chi granted her employees generous cash bonuses in the beginning when the company's shares were not yet very valuable. Over the past fourteen years, Chi herself has never drawn a salary, but has distributed employee bonuses in excess of NT$60 million. Many Chaheng employees have meanwhile accumulated personal wealth in the order of tens of millions of New Taiwan dollars.
Her second secret for success is unwavering determination. "I sleep less than two hours per day. During the daytime, I take care of R&D and production, while in the evening I write project proposals. Once when I had the symptoms of stomach ulcers, I just pressed a pillow against my stomach and continued to write,” Chi recalls.
While Chi is not able to offer any advice when it comes to R&D issues, she likes to keep her technicians company until they have figured out a solution, no matter how long it takes. Not all staff members are happy when someone hovers over their shoulder while they are racking their brain. One day, an employee told Chi that her presence was stressful, so Chi pretended to leave the workplace. When the employee soon afterwards notified her that the problem had been solved, Chi rushed back into the office within 30 seconds – she had been waiting outside in her car all along.
Chi attributes her tough personality, her ability to confront hardship,to her upbringing. Chi’s parents separated when she was very little. As a result, she hardly ever met her father during childhood. He reestablished contact with the adult Chi only much later when he was already in bad health; Chi cared for him until he passed away.
Chi’s mother did not let her attend university because she subscribed to the traditional view that girls do not need higher education as they will marry anyway. So she was forced to work her way through college, attending National Kaohsiung Institute of Technology (now National Kaohsiung University of Applied Sciences) as a two-year junior college evening program student. “At peak times, I had a monthly income of more than NT$200,000 working eight jobs at a time; during the hardest times, however, I had to split a single filled bun to cover two meals,” Chi recalls.
Chi learned while growing up that she needed to steel herself against those who were trying to deflate her dreams. In elementary school, she was at the top of her class. One time, the teacher asked the students to write down what they wanted to be when they grew up. While Chi’s classmates wanted to be teachers or flight attendants, Chi wrote she was planning to retreat into the mountains to learn martial arts, and then she would return as a warrior for justice. “The teacher scolded me harshly for this. But I am truly a person who seeks justice and walks the walk,” says Chi.
This justice-seeking knight went on to change the aviation industry. Victor Taichung’s Huang observes that Taiwan’s aviation industry heavily depends on the AIDC subcontracting international orders. Chi, however, has proven that it is possible to become a Tier-1 supplier without having to go through the AIDC. She has also helped Taiwanese machine tool makers access the international supply chain. “The first time that Victor Taichung gained access to the international supply chain was through Chaheng,” notes Huang.
What is Chi’s advice to women entrepreneurs who are entering unchartered waters? “Don’t be afraid,” Chi says. “When I produced high-end engine blades, people said Chaheng would go under. When I used machines made in Taiwan, they said I was a guinea pig. I tell you, I am always successful because when I encounter failure or setbacks I won’t give up; I will start all over and keep moving forward. I will continue to march until the end.”
It’s this resolve to keep marching forward that helped her realize her childhood dream, becoming the only female top executive in Taiwan’s aviation industry.
Translated from the Chinese by Susanne Ganz