The CEO of Rockwell Collins’ new parent company is hoping to reassure investors about a wave of changes at the company. United Technologies announced Monday it had finalized the acquisition of the aerospace firm, and is in turn splitting into three separate companies.
What Iowans have known as Rockwell Collins is now Collins Aerospace Systems. That’s after Connecticut-based United Technologies Corporation bought the firm, which is Cedar Rapids’ largest employer.
Collins Aerospace is now comprised of what was Rockwell Collins, and the Charlotte, North Carolina-based UTC Aerospace Systems. Together, the merged organization will continue to produce commercial and military-grade aircraft components like navigational systems, landing gear and engine controls. The new firm employs 70,000 workers worldwide, and UTC executives estimate the business will generate $50 billion worth of sales annually by 2020.
In turn, parent company UTC is now spinning off its three independent businesses: an aerospace arm made up of Collins Aerospace and Pratt & Whitney; an HVAC, refrigeration and automation arm under the name Carrier; and an elevator, escalator and moving walkway manufacturing arm under the name Otis. UTC CEO Greg Hayes told investors Tuesday each of the new companies can be profitable.
“We’re always concerned about the aerospace business because of the very long cycle of the investments and the cash returns. And so again, I think we always thought we need commercial businesses to support the aero businesses. But with the aero scale the way it is today, that’s no longer the case,” Hayes said.
Executives argue the three companies will be better equiped to focus on their respective goals and respond to specific challenges. Chief Financial Officer Akhil Johri says the transition will mean looking for ways to streamline operations.
"In this process we will evaluate the existing organizational structure to ensure each standalone business has best in class [selling, general and administrative expenses] and organizational designs that will minimize beauracracy upon separation," Johri said.
But Hayes says customers and employees will largely be insulated from the changes.
“Obviously delivering upon our commitments remains the priority as we move forward during this transition period. We’re committed to pursuing the separation with minimal disruption to our customers and employees,” Hayes said.
Collins spokeswoman Pam Tvrdy-Cleary says the company is invested in its 9,000 Iowa employees, most of whom are based in Cedar Rapids. In a written statement, Cleary said Tuesday there are no immediate staffing changes planned for the state’s workers.
"Collins Aerospace remains committed to Iowa employees and helping the areas in which they live and work continue to thrive," she said.
