COVID floors aero suppliers after years of planemaker blows

If the Teledyne Technologies unit also wanted to be a top-tier supplier on the blockbuster 737 MAX program and a future jet codenamed NMA, it had to slash prices for its data systems, according to a person familiar with the situation.It also needed to give Boeing a share of the higher-margin work for repairs.

Already weakened by a decade of pressure from Boeing and Airbus to cut prices and invest in new technology, U.S. aerospace firms now face a wave of bankruptcies, restructurings, takeovers and mergers, industry sources and bankers say.Teledyne Controls has laid off more than half of the 600 or so workers at its El Segundo, California factory, and closed its Seattle-area office, with more cuts expected, the person familiar with the situation said.

Now, Boeing and Airbus face a dilemma between letting industrial juggernauts like Raytheon Technologies , with a US$95 billion market value, absorb smaller companies and boost their pricing power, or shelling out precious cash to bring technology in-house.Teledyne joins Kansas-based Spirit AeroSystems , Britain's GKN , Montreal-based Heroux-Devtek , and many others in shedding jobs.

Now, industry sources say Boeing is putting pressure on its largest"tier 1" suppliers to flow money down to smaller"tier 3" and"tier 4" parts manufacturers, some of which have also applied for the COVID-related U.S. payroll protection program. Boeing sees 14 per month as low enough to begin to clear an inventory of 450 new 737 MAX jets once U.S. regulators clear it for service, but high enough to keep suppliers on life support.

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