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00:00:01
>> It's the biggest deal ever in the aviation industry. United Technologies announcing Tuesday that it is buying Rockwell Collins for a total of $30 billion. The combined companies will control just about everything on and in an airplane besides the plane itself, as Reuters Aviation Correspondent, Al Scott details.
00:00:24
>> They make seats. They make engines. They make WiFi, they make landing gear, they make cabin interiors, they make lavatories, they make galleys, they make air conditioning. You name it, they make it. It's a pretty big combination of these companies and it is the largest aerospace deal in aerospace history.
00:00:43
>> And with that kind of strength, a combined United Tech and Rockwell Collins could turn the tables and put the squeeze on their biggest customers, the companies that build the planes.>> In recent years, Airbus and Boeing in particular, have been trying to get more of the profit margin into their business and out of the supply chain.
00:01:05
And Boeing and Airbus have been going after what's known as the aftermarket for parts and service after the plane is sold. That's the bread-and-butter of businesses like United Technologies and, to some extent Rockwell Collins. So there's a tug of war going on about the who's gonna really profit from these components and becoming bigger.
00:01:25
United Technologies owns more of the content on those planes and therefore has more barging power at the negotiating table.>> Boeing clearly irked by the deal, warning both companies that their number one priority should be delivering products at cost, on time and with the highest quality, issues plane makers point to for causing delays in meeting their plane deliveries.
00:01:47
Boeing, not the only skeptic out there. Investors unloading shares of United Technologies. One reason, doubts the merger will achieve revenue targets given as rationale for the combination.
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