Those are the options for Tier 2 and Tier 3 suppliers in the aerospace industry today , according to noted aerospace analyst Richard Aboulafia .
“ Unless you are ‘ special and unique ,’ you won ’ t be able to go it alone in the current environment .
In one sense , nothing ’ s changed ,” said Aboulafia , Teal Group vice president . “ It ’ s just sped up because of what the OEMs are doing .”
Aboulafia , who annually gives the keynote address during the Pacific Northwest Aerospace Alliance ’ s annual conference , talked exclusively with Northwest Aerospace News before the event about the challenges facing the Northwest ’ s smaller aerospace companies .
What the OEMs are doing is demanding more and paying less than ever before . Boeing , above all , is demanding much better pricing , while also insisting that suppliers pick up the tab for more research and development .
Airbus is doing it too , but is “ not nearly as vicious ,” Aboulafia said . Smaller OEMs like Bombardier might like to emulate Boeing , but they don ’ t have the market share muscle to make the kinds of demands coming from Chicago .
In an effort to boost its profits , Boeing also is going after the lucrative aftermarket parts business that for decades has been a key profit center for smaller suppliers , who have been offsetting narrow margins on sales directly to Boeing with fatter profits on sales of replacement parts to Boeing customers .
“ A handful of suppliers are thriving in this new environment ,” Aboulafia said . “ There are some people that are very flexible and very agile .”
22 NORTHWEST AEROSPACE NEWS