Page 18 - AAA SEPTEMBER - OCTOBER 2018 Online Magazine

BATTLE JOINED Major suppliers have begun to fight back
against the increasing cost pressure that
plane makers are exerting on them
Arun Sivasankaran

nited Technologies Corp.’s acqui- UTC officials say the company is on track with other regulatory
sition of Rockwell Collins to create approvals – the deal, which has to be passed by as many as 17
Collins Aerospace Systems, a agencies around the world, is still awaiting clearance from China
Uleading Tier 1 supplier in the aero- – and that it is only a matter of weeks before the deal closes.
space and defence industry that will have Some experts have contended that the deal is too expensive,
considerable bargaining power, will not only but UTC officials are confident that it is a wise investment.
intensify the simmering tensions between
plane makers and suppliers but also trigger “With regard to the closing of the transaction, let me just say
further industry consolidation. The US$30 that we’re on track with the regulatory approvals. We believe
billion acquisition, one of the biggest deals we’re down to the final stages of the process. We expect the
in the history of the industry, was announced transaction to close here still in the third quarter,” UTC CEO
in September last year and was initially Greg Hayes said recently on an earnings call. “This acquisition
expected to close in July. On Oct. 1, the U.S. adds tremendous capabilities to our aerospace businesses and
Department of Justice gave its nod to the strengthens our complementary offerings of technologically
acquisition on the condition that UTC will advanced aerospace systems,” adds Hayes.
sell two Rockwell Collins’ businesses – its
pneumatic ice protection systems business “Together, Rockwell Collins and UTC Aerospace
that removes ice from aircraft wings and one Systems will enhance customer value in a rapidly
that deals with trimmable horizontal stabilizer evolving aerospace industry by making aircraft more
actuators that help aircraft maintain altitude. intelligent and more connected.” Greg Hayes

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