RTX Faces Challenges with Supply Chains Amid Post-Pandemic Recovery

Greg Hayes, CEO of aerospace and defense giant RTX, revealed that global supply chains remain strained post-COVID-19, and finding skilled labor is still a significant hurdle. RTX is exploring alternatives to Chinese suppliers due to potential geopolitical tensions and ensuring dual sources for key components.

The head of aerospace and defense giant RTX said on Tuesday that global supply chains remain stretched in the wake of the COVID-19 pandemic, and finding qualified labor for aerospace factories remains a 'huge' challenge. 'The supply chain has not recovered,' Chief Executive Greg Hayes told the Global Aerospace Summit hosted by the U.S. Chamber of Commerce, adding that RTX is researching alternatives to its roughly 2,000 Chinese suppliers in case of a sudden worsening of geopolitical tensions and ensuring it has dual sources for all key components.

RTX is reviewing its options regarding its Chinese suppliers. 'We're also trying to minimize the geopolitical risk by saying - OK, we've got 2,000 suppliers in China today. What happens if, and we don't know what that if is - what happens if and how are we going to deal with that?' Hayes said. 'So we have been actively working again, not to pull suppliers or not to pull out of China, but to make sure that we have alternatives if we know something bad does happen.'

A Chinese invasion of Taiwan would prompt the U.S. government to impose sanctions on China which could significantly impact U.S. companies. RTX halted purchases from Russian suppliers after Russia's invasion of Ukraine. RTX has 14,000 suppliers worldwide.

'We monitor them every single day, not just for their delivery performance and quality, but also for their financial health and their staffing,' Hayes said. 'Today, it's still a huge challenge to find qualified folks to work on some of these products, and that has, I'm afraid, not gotten better nearly as quickly as demand has recovered.'

(With inputs from agencies.)