Rolls-Royce has been forced to invest in a struggling components manufacturer to protect a key part of its supply chain. The Derby, UK-based engine manufacturer agreed late last year to buy a stake of just over one-third in UK-based Gardner Aerospace for an undisclosed sum to protect the supply of complex machined and fabricated metal components for combustion products across its range of engines.
“Gardner requested additional cash from its venture-capital backers to provide it with greater liquidity as it addressed such issues as rising material prices and growth demands. One of the backers [ABN Amro] did not wish to invest more cash,” says Gardner business development director Nick Guttridge.
He adds: “As one of our major customers, R-R was demanding growth, and decided they would rather see themselves as a shareholder than see Gardner struggling.”
R-R will not take an active role in Gardner’s management. “We have a very firm make-buy strategy and it is our policy to follow that, but in this case there might have been a continuity of supply issue,” says R-R.
Gardner makes “relatively complex structures, which would have been hard to source quickly from elsewhere”, R-R adds.
Source: Flight International
