RTX Raises Alarm Over Post-COVID Supply Chain Issues: Report

RTX Corporation RTX shares are trading lower on Wednesday. The company reportedly raised concerns about global supply chains post-COVID-19 at a key aerospace event.

The company highlighted the significant challenge of finding qualified labor for high-demand jet industry production lines, reported Reuters.

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The report quoted Executive Chairman Greg Hayes as saying, “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?”

“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.”

“Today, it’s still a huge challenge to find qualified folks to work on some of these products and that is I’m afraid not gotten better nearly as quickly as demand has recovered.”

Other aerospace executives also warned of persistent disruptions due to high demand and shortages in parts and labor at the event.

The head of France’s aerospace company, Safran, noted that the sector faces challenges from labor loss during the pandemic, raw material supply issues, and rising energy prices.

The report cited Safran CEO Olivier Andries, who said, “We are in a period where there has never been such a tension between very strong demand and a supply chain that has been under pressure and suffered many shocks,” and further added that he expected more of this in 2025.

As per the report, a Chinese invasion of Taiwan would likely lead to U.S. sanctions on China, significantly affecting U.S. companies. RTX, which has 14,000 suppliers globally, halted purchases from Russian suppliers following Russia’s invasion of Ukraine.

In August, RTX disclosed that it had developed an air-to-air missile that could give the U.S. an upper hand against China.

Investors can gain exposure to the stock via iShares U.S. Aerospace & Defense ETF ITA and First Trust Exchange-Traded Fund First Trust Indxx Aerospace & Defense ETF MISL.

Price Action: RTX shares are down 1.82% at $118.11 at the last check Wednesday.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.