Airbus and Boeing voice concerns over UTC-Rockwell Deal

- Finance - Sep 06, 2017

Aerospace manufacturing giants Airbus SE and Boeing Co. have simultaneously voiced concerns about $30bn merger of United Technologies Corp. (UTC) and Rockwell Collins, fearing that the deal could have a harmful effect on their own businesses.

Both Airbus and Boeing are sceptical that the multibillion dollar deal will cause distractions for two of their key suppliers, as it comes at the same time that both plane manufacturers have launched initiatives to ramp up the production of their single aisle jets.

“We hope that this M&A would not distract UTC from their top operational priority. Our total focus is on delivering planes,” an Airbus spokesman said.

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Boeing also threatened that it would be prepared to take action against the UTC-Rockwell collaboration, should the merger interfere with business operations, in order to protect its own interests:

“Until we receive more details, we are sceptical that it would be in the best interest of, or add value to, our customers and industry.”

“Should we determine that this deal is inconsistent with those interests, we would intend to exercise our contractual rights and pursue the appropriate regulatory options to protect our interests.”

Chicago-based Boeing have not been afraid to exercise its strength in the past, having shifted to a working with a Canadian company in the manufacture of the landing gear for its 777X jetliner after disagreements with UTC.

However, despite short term scepticisms, industry experts such as Brazilian plane maker Embraer SA are predicting that the merger will benefit the plane manufacturers in the long run, bringing greater efficiencies and economies of scale to the table.

With UTC shares having dropped as much as 5.7% in the wake of uncertainty in the merger with Rockwell Collins, the company plans to discuss the merits of the deal with customers including Airbus and Boeing next week.

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