China-owned Austrian airplane parts maker FACC ramps up production ahead of Brexit

Given the intertwined nature of the airplane industry, FACC sees no danger to its business due to the U.S.-China trade war. Brexit though is another story, since it could rip apart existing supply chains.

China-owned Austrian aeroplane parts maker FACC stated, it is ready to sink in $572 million (500 million euros) on acquisitions in order to streamline its supply chain and make it less dependent on suppliers while adding more technologies and strength to its core business, said its CEO.

FACC makes airplane components such as tail assemblies, wings, fuselages, cabin interiors and engines for planemakers including Airbus, Bombardier and Boeing.

It expects revenue of 760-770 million euros ($881 million) for its 2018/19 business year that ends in February.

“Half a billion (euros), that is the amount of money we could use to make acquisitions in the next five years,” said Robert Machtlinger.

He went on to add, FACC is looking for suitable takeover targets.

In recent months, the firm has been increasing production of parts it makes for Airbus and Rolls Royce, for assembly in Great Britain, as it prepares for a cliffhanger Brexit.

Components for about four weeks of production are being sent to Britain, said Machtlinger. This is quite a stretch for a company whose normal buffer would be two to four days.

“The majority of the (extra) costs are borne by the customer,” said Machtlinger.

Significantly, Airbus, which accounts for 50% of FACC’s revenue, has threatened to shift future wing-building out of Britain. This however can be mitigated, said Machtlinger, since FACC, can easily adapt delivery routes.

Incidentally, FACC’s also equips China’s planemaker Commercial Aircraft Corp of China (COMAC); it does not expect the industry to be hampered by current U.S.-Chinese trade friction.

“Aviation is an export business for the U.S.,” said Machtlinger who added, its unlikely that anybody will want to change that.

There is no such thing as a pure American plane.

“This is a completely intertwined industry,” said Machtlinger.

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