Bombardier’s Supply Chain Struggles
Bombardier, the Canada-based aircraft manufacturer, is contemplating M&A as a possible solution to persistent supply chain issues, as revealed by President and CEO Éric Martel during a recent earnings call. The aviation industry has been grappling with numerous supply chain disruptions, with production halts across various supply chains due to quality issues at Boeing and sourcing challenges at other manufacturers. Bombardier, like its peers, has been implementing strategic plans to mitigate these headwinds and meet delivery objectives.
M&A as a Potential Solution
Martel reminded analysts of Bombardier’s acquisition of Latécoère’s Electrical Wiring Interconnection System Business in July 2023, a move aimed at optimizing and strengthening its supply chain. This business produces electrical harnesses used in aircraft. Martel suggested that Bombardier might consider similar acquisitions if supply chain pressures persist.
Engine availability remains a significant issue for Bombardier’s supply chain. Martel assured investors that the company is working closely with engine suppliers, a strategy it has been employing since the onset of the pandemic. In March, Chief Procurement Officer Shauna Gamble revealed that Bombardier had increased the number of employees liaising with its suppliers, with over 50 teams working in the field.
Other Mitigation Strategies
Bombardier has also implemented other strategies to prevent production issues. Last year, the company deployed a team of specialists to address key supplier and commodity challenges and moved some production in-house. Bombardier is also managing production shifts resulting from Airbus’ and Boeing’s acquisitions of Spirit AeroSystems’ facilities and assembly lines. Martel emphasized that Bombardier’s priority is to ensure the existing contract with Spirit is upheld to the highest standard for quality and delivery.
In conclusion, Bombardier’s proactive approach to handling supply chain challenges through potential M&A activity reflects the company’s commitment to overcoming obstacles and meeting delivery targets in a challenging industry environment.
