Aerospace suppliers Woodward Inc. and Hexcel Corp. set plans for an all-stock merger in what executives said was a response to the rising tide of climate-change pressures facing the industry.

The U.S. companies make parts for Airbus SE AIR, -3.54% and Boeing Co. BA, -3.81% jets, including the grounded 737 MAX, which Boeing halted production of this month. Woodward WWD, -2.48% and Hexcel HXL, -4.99% said their merger would allow them to expand spending on research and development of more efficient engines and lightweight aircraft parts.