May 17, 2020

Northrop Grumman signs supply chain deal with Australia

Supply Chain
global supply chain
Northrop Grumman
Austral
Freddie Pierce
2 min
Aerospace and defense leader Northrop Grumman signed a deal with Australia to compete within the company’s global supply chain
Australias emergence as a major player in the global market doesnt look like it will be going away anytime soon. Fortune 500 company Northrop Grumman...

Australia’s emergence as a major player in the global market doesn’t look like it will be going away anytime soon.

Fortune 500 company Northrop Grumman, a worldwide leader in aerospace and defense technology, has signed a deal with Australia to identify opportunities for Australian business to compete within the company’s global supply chain, according to a report on UPI.com.

 As part of the GSC program to help Australian defense companies reach global supply chains, the signing adds prestige and capability for Australia’s smaller companies.

"Northrop Grumman recognizes that small and medium enterprises, or SMEs, face challenges in gaining access to the global supply chains of multinational corporations," Wes Bush, president and CEO of Northrop Grumman, said. "The Australian government's innovative approach ensures opportunities for SMEs to compete globally while giving prime manufacturers greater visibility into the talents and capabilities of innovative Australian companies."

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Australia as a whole is trying to add visibility and capability to its growing defense sector. The signing of a supply chain deal with Northrop Grumman is very much in line with that initiative.

"International collaboration is very important and we are looking forward to assisting with this important initiative," Bush said. "We plan to work closely with the Australian Department of Defense to identify opportunities for Australian companies."

Northrop Grumman employs more than 75,000 people worldwide, and reported revenue of close to $35 billion in 2010.

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Jun 16, 2021

EU and US agree end to Airbus-Boeing supply chain tariffs

supplychain
Boeing
Airbus
tariffs
3 min
Supply chains embroiled in Airbus-Boeing dispute will no longer be impacted by $11.5bn tariffs imposed on food and beverage, aircraft and tobacco

The EU and US have agreed to resolve a 17-year dispute over aircraft subsidies, suspending tariffs on billions of dollars' worth of goods that have plagued procurement leaders on both sides of the Atlantic. 

Under an agreement reached by European Commission Executive Vice-President Valdis Dombrovskis and US Trade Representative Katherine Tai on Tuesday, the tariffs will be halted for a period of at least five years. 

It will bring an end to punitive and disruptive levies on supply chains that have little to do with the argument, which became embroiled in the trade battle. Businesses on both sides of the dispute have been hit with more than $3.3bn in duties since they were first imposed by the US in October 2019, according the EC. 

The US imposed charges on goods upto $7.5bn in response to a World Trade Organisation ruling that judged the EU’s support of Airbus, its biggest aircraft manufacturer, unlawful. A year later in November 2020, the EU hit back. The WTO found the US had violated trade rules in its favourable treatment of Boeing, and was hit with EU duties worth $4bn. 

In all the tariffs affected $11.5bn worth of goods, including French cheese, Scotch whisky, aircraft and machinery in Europe, and sugarcane products, handbags and tobacco in America. Procurement leaders on both sides of the fence were forced to wrestle with tariffs of 15% on aircraft and components, and 25% on non-aircraft related products. 

Boeing-Airbus dispute by the numbers  

  • The dispute began in 2004
  • Tariffs suspended for 5 years 
  • $11.5bn worth of goods affected by tariffs
  • $3.3bn in duties paid by businesses to date 
  • 15% levy on aircraft and 25% on non-aircraft goods suspended

Both sides welcome end to tariffs 

European Commission President Ursula von der Leyen branded the truce a “major step” in ending what is the longest running dispute in WTO history. It began in 2004.

“I am happy to see that after intensive work between the European Commission and the US administration, our transatlantic partnership is on its way to reaching cruising speed. This shows the new spirit of cooperation between the EU and the US and that we can solve the other issues to our mutual benefit,” she added.

Both aircraft manufacturers have welcomed the news. Airbus said in a statement that it will hopefully bring to an end the “lose-lose tariffs” that are affecting industries already facing “many challenges”. Boeing added that it will “fully support the U.S. Government’s efforts to ensure that the principles in this understanding are respected”. 

The US aerospace firm added: "The understanding reached today commits the EU to addressing launch aid, and leaves in place the necessary rules to ensure that the EU and United States live up to that commitment, without requiring further WTO action."

This week’s decision expands upon a short-term tariff truce announced in March this year. The EC says it will work closely with the US to try and further resolve the dispute, establishing a Working Group on Large Civil Aircraft led by each side’s trade minister.

Airbus last month signalled to suppliers that post-pandemic recovery was on the horizon, telling them to scale up to meet a return to pre-COVID manufacturing levels. “The aviation sector is beginning to recover from the COVID-19 crisis,” said Airbus chief executive Guillaume Faury, adding that suppliers should prepare for a period of intensive production “when market conditions call for it.”

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