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MTU Adjusts Supply Chain to Counter US Aircraft Part Tariffs

The German engine manufacturer anticipates significant costs but remains optimistic about profit growth after a strong Q1 performance.

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Overview

  • MTU Aero Engines expects mid-to-high double-digit million euro costs from newly imposed 10% US tariffs on aircraft parts.
  • To minimize tariff-related expenses, MTU is rerouting supply chains to move components directly between European facilities, bypassing the US.
  • The company reported a 25% revenue increase to €2.1 billion and a 77% rise in net profit to €224 million in Q1 2025.
  • Despite the tariff challenges, MTU maintains its forecast of 15% profit growth for 2025, though this excludes potential tariff impacts.
  • Long-term measures like establishing alternative production sites are deemed impractical due to high costs and lengthy timelines.