Growth Opportunity.jpg Boeing

Growth Opportunity?

OEMs pulling work in doesn’t mean suppliers are completely shut out.

Boeing’s recent revelation that it wants to develop more avionics in-house is getting significant attention for the challenges it could present for existing suppliers. But where many see encroachment, some see opportunity. 

Rockwell Collins CEO Kelly Ortberg used a recent analyst conference to underscore that Boeing’s planned avionics-manufacturing expansion could open doors for collaboration. Recent comments from Esterline’s top executive suggests that there is similar optimism farther down the supply chain.

“This might actually, long term, be an opportunity for us,” says Curtis Reusser, Esterline’s president and CEO. The reason? Boeing would presumably seek at least some help when developing new products—the kind of assistance that a larger supplier to Boeing may not need.

"When someone controls the entire avionics suite, it’s difficult for us to participate sometimes,” Reusser says.

Esterline generates about half of its $2 billion in annual sales from commercial aviation, supplying avionics, sensors, and control system components to multiple manufacturers, including Airbus, Boeing, Bombardier, and Embraer. Its $500,000 in ship-set value on every 787 includes flight deck panels, which it will also supply on the 777X. The work on Boeing’s newest widebodies has led to further engagement with Boeing on “studies and new opportunities,” says Reusser. 

"So I'm going to say that there's some potential” as Boeing looks at developing more avionics in-house, he adds. “For us, in the near term, not an impact, even in the medium term, not an impact, and I would say, long term, maybe even an upside for us.”

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