After the COVID-19 pandemic, the global geopolitical situation continues to be tense, posing serious challenges to the supply chain. Greg Hayes, CEO of U.S. defense giant Raytheon Technologies (RTX), stated that the company is assessing its Chinese suppliers and actively seeking alternative solutions to mitigate risks.
On Tuesday, September 10th, Hayes spoke at the Global Aerospace Summit hosted by the U.S. Chamber of Commerce, saying, “… RTX is evaluating the choices of Chinese suppliers to prevent a sudden deterioration in the current tense situation.”
“We are also working to minimize geopolitical risks … We currently have 2,000 suppliers in China. We don’t know ‘what if’, what will happen ‘if’, and how should we respond?”
Hayes emphasized, “So, we have been actively working not to withdraw suppliers, not to withdraw from China, but to ensure that if something bad happens, we have alternatives in place.”
The tension in the Taiwan Strait carries military risks. A Chinese invasion of Taiwan would prompt the U.S. government to impose sanctions, potentially having a significant impact on American companies. Following Russia’s invasion of Ukraine, RTX ceased procurement from Russian suppliers.
RTX has 14,000 suppliers globally. Hayes said, “We monitor these suppliers every day, not only their delivery performance and quality but also their financial condition and personnel deployment.”
“Currently, finding qualified personnel to produce some of these products remains a huge challenge, and this situation may not recover as quickly as demand.”
Industry leaders in the aerospace sector warned at one of the important annual events that caused chaos to continue due to conflicts between high demand and shortages of components and labor.
The head of the French Safran group stated that the aerospace industry is facing a series of impacts, from labor outflows during COVID-19, to supply issues of raw materials and rising energy prices after Russia’s invasion of Ukraine.
All this is happening as the aviation industry faces high demand for new aircraft and engines. At the same time, repair shops are also fighting for similar components to keep old aircraft flying, and airlines are mobilizing all possible resources to prepare for the aviation travel industry’s recovery.
Olivier Andries, CEO of Safran Group, said, “We are in an unprecedentedly tense period, demand is very strong, and the supply chain has been under pressure and facing many impacts.”
(Reference from Reuters)