Boeing and Airbus are viewing the combination of their parts suppliers with justified skepticism. As more parts suppliers combine, like the recently announced acquisition of Rockwell Collins by United Technologies, the big jet makers will be forced to pay higher prices for parts. This reality has them considering making more of their parts themselves. Robert Wall and Doug Cameron write:
Worried about getting squeezed by the consolidation, Boeing and Airbus have moved to protect themselves by building more of their parts in-house. This month, Boeing will start construction of a new production facility in Sheffield, England, that will make some of its own actuation equipment—motors that help move a wing’s flaps. Airbus, meanwhile, is planning to build some of its own nacelles, the metal casings that house a plane’s engines. United Technologies is one of the world’s largest nacelle suppliers.
“We are constantly revisiting our ‘make or buy’ decisions,” said Fabrice Brégier, Airbus chief operating officer and head of commercial planes.
Boeing decided two years ago to make some of its own nacelles after years of buying them. In July, the company also said it is planning to develop and build some aircraft electronics, a market dominated by companies such as Rockwell Collins and Honeywell International Inc.
The wings for a revamped version of Boeing’s new 777 jetliner also will be built at a new plant near Seattle rather bought from a supplier. Boeing bought the wings from a supplier for its last big project, the 787 Dreamliner.
“The opportunity ahead of us, in terms of transforming how we design and build, how we manufacture, is even greater than some of the product innovation that we’re going to bring to the table,” said Boeing Chief Executive Dennis Muilenburg.
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