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30 percent of German aeronautical suppliers will have disappeared from the market by 2020

January 31, 2013 | News Germany

Boeing’s “Dreamliner debacle” also affects German suppliers
Germany’s aeronautical supply industry faces a further wave of consolidations: a 30% fall in the number of companies is expected by 2020. The most important reason: increasing numbers of suppliers find themselves unable to cope with the increasing speed and complexity of tasks. The Boeing “Dreamliner debacle” furthers hastens this process of concentration, as market analyses by Staufen AG show.

“The series of problems with smouldering batteries in the Dreamliner clearly high-lights the weaknesses in the aviation industry”, states Dr Jens Zimmerman, Senior Executive at Staufen AG. “In addition to the technical challenges associated with the construction of new resource-efficient planes, it is the collaboration between manu-facturers and suppliers which is the Achilles’ heel in the construction of new planes. As in case of the Dreamliner, suppliers increasingly take on development tasks that are beyond their cope.”

This has consequences. Manufacturers put their suppliers more closely to the test. In addition to technical expertise and strength of financial sources required for prod-uct development, they demand of their suppliers complete professionalism across the entire value creation chain. Market analyses by Staufen AG show that individual companies are already excellently positioned, occupying leading positions in the global market. However, the majority of the 150 German suppliers (with an annual turnover of approx. 26 billion Euro and almost 100,000 employees) only partially meet the new requirement profile as yet and are thus under threat of being included in the manufacturers’ watch list. 

“Outside of Germany, this consolidation process has already progressed much further, but not within Germany”, observes Zimmermann. Staufen AG expects therefore that three in ten German suppliers will lose their independence over the next few years. “Smaller companies in particular operate with their backs to the wall. They do not manage to keep up with market growth and supply the required quantities.” 

Air lines are under increasing cost pressure and increasingly pass this on to the original equipment manufacturers (OEM). The resulting intensification in collabora-tion can be used as a basis for economic as well as technological success. “We see a development similar to that in the car industry. However, the processes of that industry cannot simply be transposed unchanged to the aviation industry – the dif-ference in batch sizes alone prohibits such approach. The aviation industry has to find its own way forward. Lessons learned from the Dreamliner debacle will help in this process”, the Staufen Senior Executive concludes. 

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