17 Apr 2020 -
 General

Savage cut-backs in Aerospace & Defence Supply Chain

“Airbus has slashed near-term airliner production, and Boeing’s cuts could be worse. Air traffic has collapsed, and fewer aircraft will need to be repaired. Meanwhile, factories everywhere face the dilemma of how to stay in operation with worker absences as high as 50%.” These are the conclusions drawn in Aviation Week’s latest podcast.

Aviation Week interviews Dr. Vivek Saxena, of Advisory Aerospace, who says: “It’s very different from anything that’s experienced in the past. You’re not only being affected by demand and supply, you’re having to adjust to problems within the production and corporate attendance; dealing with 25-50% employee absenteeism in the plants.”

The podcast reports that Boeing, South Carolina, has shut down all commercial production, citing more than 2 dozen instances of Covid-19 positive tests. Now the challenge is, says the podcast, they must produce airplanes at some point, but it’s unknown whether they are even needed.

They add that the world’s largest first-tier aerostructures manufacturer, Spirit AeroSystems, Inc., based in Wichita, Kansas, has furloughed all of it’s workers indefinitely in Wichita and across Oklahoma, and they’ve suspended their dividends and share buy-backs.

Other cuts observed across the industry includes slashing RnD and capital expenditure to conserve cash.

However, many suppliers are continuing to produce, especially those involved with military and defence contracts, which are typically more stable, but elsewhere many A&D suppliers are being told to stop supplying.

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