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    Aerospace

    Emerging from a crisis

    • By Editor
    • July 17, 2020
    • 2 minute read

    In our May issue comment, ‘unprecedented’ was the word of the month – perfectly describing the impact of the Coronavirus on our personal lives, our jobs and businesses. Now, unlike any financial crisis that has gone before, we can only hope that the ‘bounce-back’ will also be ‘unprecedented’.

    During a recession, companies may see a 20, 30 or even 50% decline in business over a prolonged period; however, the pandemic lockdown turned the taps off with immediate effect. As OEMs closed the doors, the subcontract supply chain scrambled like a bag of feral cats to get involved in the Ventilator Challenge and PPE production. Subcontractors and their supply chain of machine tool, cutting tool, coolant, workholding and other consumables were hit by a 70, 80 and even 90% drop in business. Anybody that did better than this, was either lucky or they are suppliers/manufacturers of PPE.

    As the factory doors open and we wake from a furlough slumber, companies are seeing business return to some semblance of normality; just by being 10 to 20% below normal capacity feels like a blessing from where we were in March, April and May – but what about retrieving that remaining loss? Firstly, with industry devastated for three months, we have to accept that when the financial year ends in January or April – 2020 can be considered a financial ‘right-off’.

    With 8.9m workers on furlough, an estimated financial bill of £123bn for the government, aerospace OEMs announcing production cuts of 35% and considerable job losses throughout the industry; there is a question hanging over business regarding how many will actually return to work from furlough?  But where there is devastation, there must always be optimism…

    There will always be cynics that expect OEMs to use the pandemic as an excuse to ‘trim the fat’, but that will eventually create stronger, more efficient, resilient and profitable businesses. In the longer term, this will instigate greater investment in technology, automation and just like the typical recession, it will make the survivors even stronger (see page 20). We preach the benefits of investing, and if you’ve been paying attention – you can see Will Stirling’s article on page 18, ‘identify the opportunities’ and make your future brighter.

    https://cdn.mtdcnc.global/cnc/wp-content/uploads/2020/07/17202942/negative-space-red-stock-graph-chart-960x500.jpg

    Emerging from a crisis

    In our May issue comment, ‘unprecedented’ was the word of the month – perfectly describing the impact of the Coronavirus on our personal lives, our jobs and businesses. Now, unlike any financial crisis that has gone before, we can only hope that the ‘bounce-back’ will also be ‘unprecedented’.

    During a recession, companies may see a 20, 30 or even 50% decline in business over a prolonged period; however, the pandemic lockdown turned the taps off with immediate effect. As OEMs closed the doors, the subcontract supply chain scrambled like a bag of feral cats to get involved in the Ventilator Challenge and PPE production. Subcontractors and their supply chain of machine tool, cutting tool, coolant, workholding and other consumables were hit by a 70, 80 and even 90% drop in business. Anybody that did better than this, was either lucky or they are suppliers/manufacturers of PPE.

    As the factory doors open and we wake from a furlough slumber, companies are seeing business return to some semblance of normality; just by being 10 to 20% below normal capacity feels like a blessing from where we were in March, April and May – but what about retrieving that remaining loss? Firstly, with industry devastated for three months, we have to accept that when the financial year ends in January or April – 2020 can be considered a financial ‘right-off’.

    With 8.9m workers on furlough, an estimated financial bill of £123bn for the government, aerospace OEMs announcing production cuts of 35% and considerable job losses throughout the industry; there is a question hanging over business regarding how many will actually return to work from furlough?  But where there is devastation, there must always be optimism…

    There will always be cynics that expect OEMs to use the pandemic as an excuse to ‘trim the fat’, but that will eventually create stronger, more efficient, resilient and profitable businesses. In the longer term, this will instigate greater investment in technology, automation and just like the typical recession, it will make the survivors even stronger (see page 20). We preach the benefits of investing, and if you’ve been paying attention – you can see Will Stirling’s article on page 18, ‘identify the opportunities’ and make your future brighter.