PROSPER MAGAZINE: DIGITAL EDITION
RESCUING AND RECOVERING MIDLANDS AEROSPACE
The Midlands, including the Black Country region, is home to one of the few aerospace superclusters, with over 300 companies forming one of the largest regional networks internationally.
The cluster grew rapidly in the last 15 years, with output doubling and employment increased by more than half. The region is a leader in advanced aerospace manufacturing and its growth was fuelled by demand for high-technology aero engines, complex aircraft systems and precision-engineered components from global giants such as Airbus and Boeing.
Recently, the cluster has been hit by a triple threat, first from Brexit, then the suspension of the Boeing 737 MAX aircraft programme and, most devastatingly, COVID-19.
With over 90% of aircraft grounded, the impact on demand has sent shockwaves through the aerospace industry with programmes suspended, build rates reduced and redundancies announced.
Prosper spoke to The Midlands Aerospace Alliance, which represents aerospace companies across the region, and who are working at pace on a five-point rescue and recovery plan.
The MAA wants to ensure the supercluster, which could be one of the worst-hit by the market meltdown, not only survives the current crisis but comes out of it with the capabilities, capacity, technology and talent required to remain competitive and bounce back.
Recently, the organisation carried out an independent survey with a representative sample of 20% of the aerospace companies across the Midlands (56 in total).
Five key priorities emerged...
Safe and productive workplaces
The key priority for aerospace supply chain companies is undoubtedly creating safe and productive workplaces for employees. Many companies have already adapted as they had to continue operations during the lockdown, ensuring the welfare of people while delivering for aerospace customers as well as producing hundreds of thousands of parts for medical ventilators.
Securing new business
Creating new opportunities is a high priority for 40% of aerospace supply chain companies. Many invested heavily, in recent years, in response to strong market forecasts. New factories were built, new equipment installed, and talented people received extensive training. Suddenly, there is significant idle capacity and companies need to bolster their order books in order to survive the market meltdown.
Maintaining cash flow
Finance is, unsurprisingly, another key priority for the aerospace supply chain right now, with companies needing to take decisive steps to maintain cashflow when demand for many parts has slowed significantly or stopped. The top issue is ensuring customers pay on time for products and services agreed.
Resilient supply chains
Aerospace suppliers want much better visibility of future requirements from customers to aid their own planning. The supply chain wants to work in partnership with customers to plan the careful scaling down of operations to help them be more prepared to ramp back up when the time comes, although this could take three to five years.
Innovation for productivity and diversification
Innovation was seen as less critical with just 20% of respondents saying it was a top priority. Many consider innovation to be about preparing for future opportunities, for example through R&D. With such a strong focus on ensuring cash flow for survival, it’s understandable why anything deemed ‘unnecessary right now’ would-be put-on hold.
However, in the MAA’s view, all kinds of innovation are required to enable slimmed-down workforces to be more productive, increase business resilience and enter new markets at a time when diversification could be critical to survival.
Insight into the key aerospace business priorities is helping to shape the MAA’s five-point plan for rescuing and recovering aerospace which will be published at the end of June.
These are tough, unprecedented times but the MAA is determined to ensure that the Midlands aerospace supercluster remains a global powerhouse.