Boeing ‘sceptical’ about aerospace supplier deal - Supply Management
UTC and Rockwell are both important suppliers for Boeing ©Craig Larsen/Boeing
UTC and Rockwell are both important suppliers for Boeing ©Craig Larsen/Boeing

Boeing ‘sceptical’ about aerospace supplier deal

7 September 2017

Boeing has raised concerns over the combination of two of the aerospace industry’s biggest suppliers. 

Earlier this week UTC Aerospace Systems announced it had agreed the acquisition of Rockwell Collins for $30m. The buyout would combine UTC’s business in high tech sensor, engine and landing components with Rockwell’s avionics and aircraft seat business.

Boeing said it would look closely at the proposal but said: “Until we receive more details, we are sceptical that it would be in the best interest of – or add value to – our customers and industry.

“Our interests and those of our customers, employees, other suppliers and shareholders are in ensuring the long-term health and competitiveness of the aerospace industry supply chain.  Should we determine that this deal is inconsistent with those interests, we would intend to exercise our contractual rights and pursue the appropriate regulatory options to protect our interests.” 

Both UTC and Rockwell are important suppliers for Boeing as well as other manufacturers.

United Technologies Corporation, UTC Aerospace Systems’ parent company, is already the largest aerospace supplier with almost $30bn in sales this year, according to the Wall Street Journal.

By acquiring Rockwell, UTC hopes to position itself as a key supplier of components for the next generation of digital and connected aircraft.

Greg Hayes, UTC chairman and chief executive officer, said: “Together, Rockwell Collins and UTC Aerospace Systems will enhance customer value in a rapidly evolving aerospace industry by making aircraft more intelligent and more connected.”

Kelly Ortberg, chairman, president and chief executive officer of Rockwell, added the acquisition would help the firms compete more effectively for future business.

The two firms expect to realise more than $500m of synergies.

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