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By Scott Hamilton

Feb. 20, 2025, © Leeham News: The Tier 1 supply chain is all but dead.

Kevin Michaels.

This rather startling conclusion belongs to Kevin Michaels, the managing director of the consulting firm Aerodynamic Advisory. When he explains his thinking, it supports a major shift in the aerospace industry.

He made his remarks at the Pacific Northwest Aerospace Alliance conference this month in the Seattle area.

Tier 1 supplies are the last step in the supply chain, delivering products directly to the Original Equipment Manufacturers (OEMs), such as Airbus, Boeing, Embraer, and the engine makers.

Michaels said the supply chain is “fragile” and “red hot.” “Overall, the supply chain is in better shape than it was last year at this time. It's in better shape now than it was two years ago. But it's still incredibly fragile.” OEMs purchase about 75% of the value of the aircraft from the supply chain. Aerostructures are the first tier. And this is where Michaels’ rubber hits the road.