However, in recent months, a number of uncertainties have been clouding the horizon, ranging from Brexit to the suspension of production of the best-selling Boeing 737 MAX aircraft.
By early 2020 these uncertainties were already placing strains on aerospace supply chain companies that have been making significant investments in order to grow their production capacities and R&D capabilities. The Coronavirus outbreak is therefore hitting an economically-healthy but financially-pressured aerospace cluster.
To gain deeper insight into the effects on businesses such as aerospace suppliers in the UK’s industrial heartlands, the Midlands Aerospace Alliance (MAA) has carried out a second survey with its panel of aerospace suppliers in the Midlands region, companies with customers like aircraft makers Airbus and Boeing, and aero-engine makers like Safran and Rolls-Royce. The survey was carried out on 26th and 27th March. (Several of the MAA’s panel were already gearing up to make hospital ventilator parts, which will be cover in a future survey.)
The six key survey findings are that:
Some customers are still urging their suppliers to continue to produce parts while others are reporting temporary closures. Their requirements of aerospace supply chain companies are mixed but several continue to press for full supplier commitments to be delivered. Two-way communication has improved but a significant number of companies feel there has been too little of it from customers.
Customers are monitoring their supply chains much more closely and requesting information to help gauge the accuracy of delivery forecasts. Focus areas are levels of output currently, the ability to deliver and the extensiveness of safety precautions within supplier factories.
The Coronavirus is also having a mixed impact on lower-tier supply chains. Some companies on our panel are not yet feeling the effects while the majority have been informed of potential disruptions in their own supply chains, for example in Italy, or plans for temporary shutdowns.
Aerospace suppliers are experiencing an array of other challenges, for example around reduced staff levels, morale, cashflow and uncertainties around Government announcements which can be interpreted in different ways and are sources of confusion.
Companies are responding to the pandemic by adopting new working methods extensively, to enhance health and safety, while managing relationships with employees as flexibly as possible.
The aerospace industry needs the Government to be clear and accurate when communicating, and to be making sure words are followed by corresponding actions. The industry also needs financial support beyond staff furloughs if it is to recover to robust health when the time comes, as businesses have many other costs they need to cover to survive.
