JUSTIN WASTNAGE / LONDON
Government urges mergers and joint bidding for contracts to slash the number of companies in aerospace chain
The UK government has launched a drive to speed up consolidation in the country's fragmented aerospace manufacturing sector with the aim of reducing the number of lower-tier suppliers by up to 80% within five years and boosting the industry's competitiveness.
The UK trade ministry has begun a series of briefings for all companies in the aerospace supply chain detailing the need for more mergers and joint bidding for contracts.
Andy Start, programme director for the aerospace innovation and growth team (AeIGT) at the Department of Trade and Industry, says: "Rolls-Royce wants to reduce its number of suppliers from 1,000 to 200, for example. We can expect these figures to flow down the supply chain across the industry."
There are around 3,500 companies in the UK "with significant interests in aerospace", he says, a number that needs to be reduced by about 80% by 2008.
The AeIGT is promoting the use of "virtual companies", with small suppliers uniting to bid for subcontracts. The team is working with 14 regional industry associations to "map out capabilities" in design, tooling and manufacturing to bring about collective bids or mergers. Suppliers working together need commonality in software and cost-control systems, Start adds.
The AeIGT says that as risk is being passed down the supply chain, vendors are providing full designs of components, rather than pre-specified parts, which requires larger companies. "We don't have enough critical mass to work with the primes," says Start. "If we don't help companies work together, the work will move offshore."
Source: Flight International
