The aerostructures sector is the "final frontier'" when it comes to consolidation in the aerospace business and a shake-up must happen sooner rather than later. That is one of the messages being driven home by Graham Chisnall, director of strategy for GKN Aerospace Services (GKNAS), on the eve of the show.
Chisnall believes change is a necessity if the sector is to deliver more value and greater flexibility to the primes. He suggests a handful of contenders will emerge with a stronger balance sheet giving them the ability to invest even more in future programmes as risk sharing partners.
"You have a situation at the moment where Boeing, for example, dwarfs the largest aerostructures company by a ratio of 50:1. That balance needs to be altered. Tier 1 suppliers are becoming more important and for that trend to continue, they need to have the financial strength to evolve as the demands of the primes change."
Balance
"Our strategy is to judge opportunities in three areas," he says. "Is there a technology out there that we don't have and which would improve our business? Can we strengthen our customer relationships via an acquisition? And finally, do we need to alter our geographic footprint to match the growth areas?"
GKNAS was named recently on the list of partners for Boeing's 7E7 sonic cruiser replacement, a win described by Chisnall as strategically important in building relationships with Boeing.
He also stresses the need to retain balance in the way GKNAS does business. The company's order book is weighted 70:30 in favour of military work and has a similar strength in terms of US-based business compared with the rest of the world.
GKNAS views the upcoming decision on placing aerostructures orders for the Airbus A400M military transport as significant, describing the composite wing, for which the UK will take the lead, as a "perfect fit" for GKN's core strengths.
Chisnall has a clear vision of how Tier 1 suppliers such as GKNAS need to adapt to prosper: "There is a growing view that the whole supply chain is becoming more specialised. In the defence arena, for example, a business which wants to be a world class systems integrator will concentrate on that competency.
"Equally, it will be able to draw on world class expertise from different parts of the supply chain. That model will become more established as the industry evolves."
Source: Flight Daily News
