Suppliers urged into joint deals

Smaller aerospace suppliers were yesterday warned that they too will have to merge if they are to survive in the harsh climate of an integrated European industry. Dennis Mendoros, chairman of the Consortium of Lancashire Aerospace, said joint ventures and alliances will become essential if SMEs are to compete for orders once defence and aerospace […]

Smaller aerospace suppliers were yesterday warned that they too will have to merge if they are to survive in the harsh climate of an integrated European industry.

Dennis Mendoros, chairman of the Consortium of Lancashire Aerospace, said joint ventures and alliances will become essential if SMEs are to compete for orders once defence and aerospace integration takes place in Europe.

‘Smaller companies must adopt a new approach no single company will be big enough,’ he said, urging firms to group together to bid for orders.

‘There will have to be more joint ventures, with the creation of separate new companies to handle management, administration and marketing on behalf of manufacturing member firms,’ he said.

Mendoros said the uncertain shape of the European industry’s future was hampering development. It is clear that many companies need to form partnerships, with other suppliers and OEMs, but it is less clear with which companies they should be talking.

‘It is very confusing,’ he said, ‘purely because there is no indication of what the scenario will be in Europe in two years’ time.’

Speaking on Thursday at a CLA conference bringing together all the European regional aerospace organisations, Daimler-Benz executive vice president Dr Udo Pollvogt reiterated the need for firms to build alliances in Europe, and to raise investment in research and technology in partnership with major customers.

This week the Society of British Aerospace Companies launched a bid to support smaller suppliers with the creation of a UK Aerospace Marketing centre, available on the Internet (www.sbac.co.uk) for an annual subscription of £595. Services offered include a database of market information, news and research.

The CLA, formed five years ago, has a membership of more than 130 aerospace firms in Lancashire.

Opinion, page 10