By Dave DeWitte
Rockwell Collins became part of United Technologies Corp.’s new Collins Aerospace Systems division on Nov. 26, with a message to the industry that “together, we are redefining aerospace.”
It’s a bold message that could easily be dismissed as exaggeration, except for the fact that Collins Aerospace will have more resources than the vast majority of its rivals, and has a clear vision for advancing the industry through more “intelligent” aircraft.
With 70,000 employees and $23 billion in pro forma sales, the company will be more global than Rockwell Collins, and more heavily focused on commercial markets. About 75 percent of its business will be commercial and 25 percent military, compared to a roughly even split between the markets at Rockwell Collins.
“Consider the future of intelligent aviation and the defense ecosystem,” Collins Aerospace Systems CEO Kelly Ortberg wrote in a web post introducing the new company. “Few companies touch more of the components of this ecosystem – or have more opportunities to architect intelligent, interconnected systems that design-in performance and design-out cost than Collins Aerospace.”
Mr. Ortberg pointed to a “new aviation data-driven business model” that will enable airlines to access their data via Collins Aerospace’s global networks. Generated from sensors built into components and connected to a network, that data promises to empower airlines to find savings through new insights, such as when a jetliner should slow its speed to conserve fuel or avoiding flight cancellations by receiving early indications that an aircraft component needs to be replaced.
In defense markets, Mr. Ortberg said Collins Aerospace will have broad capabilities spanning airborne intelligence, surveillance and reconnaissance, blended live and virtual training, and ground-air networks customized to mission needs.
Rockwell Collins brings to Collins Aerospace its widely recognized strengths in cockpit electronics, air-to-ground networks and flight training systems, while UTC brings an array of systems from its prior acquisitions of Goodrich Corp. and Hamilton Sundstrand.
“With the formation of Collins Aerospace, we would be better positioned to meet evolving customer requirements for aerospace systems that are more electric, more intelligent, more integrated and more connected,” UTC Chairman and CEO Gregory Hayes told stock analysts after the deal closed.
Mr. Ortberg last month rattled off a list of new commercial, business, military and rotary aircraft that are being supplied by Collins Aerospace in an interview with FlightGlobal magazine, covering most of the high-growth opportunities in the industry. Highlights include the Airbus A220 and A320neo, the Boeing 737 MAX and 777X, and the Embraer E-Jet E2 series.
“It’s really a broad portfolio offering for everything that flies,” he told the magazine on Nov. 27, “Day One” of the new Collins Aerospace division.
As Mr. Ortberg and Collins Aerospace President Dave Gitlin were sharing their vision with the trade press, a larger UTC story was grabbing headlines in the mainstream media. UTC simultaneously announced plans to split up into three companies over the next two years in a transaction that is expected to give shares of each new company to current shareholders without tax liability.
Collins Aerospace will be paired with Pratt & Whitney, UTC’s aircraft engine business, in a new United Technologies Corp. focused exclusively on aerospace. Going their own way under different names will be Otis, UTC’s elevator, escalator and moving walkway business, and Carrier, a global provider of HVAC, refrigeration, building automation, fire safety and security products.
The plan means Collins Aerospace will no longer be part of a widely diversified global conglomerate, although it will be part of the world’s largest aerospace-focused manufacturer, with the technical breadth, purchasing power and negotiating strength to withstand plans by aircraft manufacturers to insource more components of their aircraft.
A subsequent announcement by French aerospace and defense giant Safran provided a reminder of how consolidation is changing the world of aerospace components. Safran shareholders had just approved its acquisition of France’s Zodiac Aerospace, one of the largest and oldest aerospace component manufacturers in the world, with sales of more than $5.9 billion. Safran offered a French vision of the future, saying it plans to overtake UTC in the next 15 years to become the largest aerospace components supplier, fueled by the addition of Zodiac and accelerated R&D spending.
UTC’s split-up marks a drastic turnabout for the industrial conglomerate, and was portrayed by Mr. Hayes as a way to maximize value by enabling each of the three businesses to make independent decisions about how best to allocate capital and serve their markets. It was also a powerful response to activist shareholders like billionaire Daniel Loeb of the hedge fund Third Point, who said in a letter to clients in May that breaking up the company could unlock $20 billion in shareholder value, excluding breakup costs.
Wall Street was unimpressed by the split-up plan, however, with UTC’s share price tumbling 6.5 percent on Nov. 27 – an otherwise strong market day – after the split was announced. The company subsequently underwent a debt downgrade by Standard & Poor’s. Most investment houses have held their ratings steady on UTC’s stock, which hasn’t risen significantly since the acquisition was announced 14 months ago.
The issue appeared to be one of near-term concerns about UTC’s prospects rather than long-term doubts. Among them: plans to hold off on significant stock repurchases to conserve cash during the organizational split, uncertainty over how long the split will take and UTC’s lowering of near-term cash flow projections for the former Rockwell Collins business.
A bigger risk that was widely discussed going into the $30 billion Rockwell Collins deal was whether UTC can deliver on its claim that the acquisition will yield $500 million in annual cost savings in the fifth year after the deal. Cost saving projections were a big part of the financial justification for the merger, and yet are one of the biggest areas where acquisitions often fail to live up to their promise. They are also an area of concern for the communities in which Collins Aerospace operates, posing uncertainty over how many job reductions it will take to meet that target.
Before the Nov. 26 closing, UTC and Rockwell Collins were already hashing over where the savings would come from, primarily in reducing supplier costs through joint volume purchasing, and through reduced sales, general and administrative (SG&A) expenses.
In a Nov. 27 conference call, UTC CFO Akhil Johri told stock analysts that UTC and Rockwell Collins each fielded “clean teams” that were meeting before the acquisition closed to identify promising areas for cost synergies, in particular looking at how much each pays its suppliers for certain commodities. The exercise has enabled UTC to see how much could be saved by moving purchases to the lower-cost supplier and negotiating better prices for increased volumes, Mr. Johri said.
“We feel very good about the total $500 million synergies number that we have talked about,” Mr. Johri said. “If anything, we feel better about the revenue synergies, which we have not factored into our business case. So I think, all in all, it feels really good.”
Mr. Johri also expressed confidence that SG&A can be lowered, saying the total number of divisions in the two companies will be declining from 10 to six.
“That means you free up some G&A,” he said. “You don’t have as many general managers. You don’t have as many finance managers. All that generates savings that are part of the synergy goal we have.”
After the closing, Mr. Hayes told analysts the company is expecting the Rockwell Collins acquisition to add 15-20 cents per share to earnings in fiscal 2019.
The local outlook
Collins Aerospace spokeswoman Pam Tvrdy-Cleary said the company is “still very committed to Iowa, with two [of six] business units being in Iowa.” The company has no current plans for workforce reductions, she said, and the divisions based here gained some product lines that were not part of Rockwell Collins. Those include sensors, ejection seats and space suits.
In the local business community, “people are just relieved that the job count and employee base is still here,” said Doug Neumann, executive director of the Cedar Rapids Metro Economic Alliance.
While the Economic Alliance likes to promote the corporate headquarters located here, Mr. Neumann said he doesn’t expect the loss of Rockwell Collins as the only local Fortune 500 headquarters to be a great blow. He said there hasn’t been any word of negative impacts on local suppliers from the ownership change.
“There’s plenty of evidence the influence, leadership and community impact of Collins Aerospace is not going to diminish,” Mr. Neumann said.
Collins Aerospace’s avionics unit, led by Kent Statler, provides commercial and defense avionics, cabin management and content systems, information management systems and services, aircraft sensors and fire protection and safety systems.
Mission Systems, led by Phil Jasper, serves defense markets. Its products include systems for communication, navigation, electronic warfare, nuclear command and control, simulation and training, space, intelligence and surveillance, as well as ejection seats and optical products.
A third Collins Aerospace business unit will also be run by a former Rockwell Collins executive. Dave Nieuwsma, who led Information Management Services, is now in charge of the company’s Interior Systems business, based in Winston-Salem, North Carolina.
Collins Aerospace has established an executive office in West Palm Beach, Florida – not officially called the headquarters – with a staff of about 30 under Mr. Ortberg and Mr. Gitlin, Ms. Tvrdy-Cleary said. Few of the Rockwell Collins leaders from Cedar Rapids have relocated, and Collins Aerospace is striving to minimize relocations as it integrates Rockwell Collins.
UTC’s corporate headquarters is in Farmington, Connecticut.
In total, Collins Aerospace employs about 9,000 in Iowa, most of them in Cedar Rapids. Iowa locations outside Cedar Rapids include Bellevue, Coralville, Decorah and Manchester.
The sale of Rockwell Collins marks its second buyout by a large industrial conglomerate. Founded in 1933 by inventor, entrepreneur and radio engineer Arthur Collins, the company was sold in 1973 to Milwaukee-based Rockwell International. It was spun off as an independent company in 2001, ending Rockwell International’s era of industrial diversification.
We protect nations and save lives. And we explore the unknown. We believe in the power of intelligence and partnership to guide our customers into the future. The paths we pave together lead to limitless possibility.What does Collins Aerospace do in Cedar Rapids Iowa? ›
Collins Aerospace is a pioneer in the development and deployment of innovative communication and aviation electronic solutions for both commercial and government applications.Does Collins Aerospace own Hamilton Sundstrand? ›
UTC Aerospace Systems.
On 26 November 2018, United Technologies announced the completion of its Rockwell Collins acquisition, after which it merged its newly acquired business with UTC Aerospace Systems to form Collins Aerospace.Does Collins Aerospace pay well? ›
Collins Aerospace pays its employees an average of $91,296 a year. Salaries at Collins Aerospace range from an average of $63,689 to $132,002 a year.Is Collins Aerospace a good place to work? ›
Decent place to work
Benefits are pretty good! Little to no room for advancement - growth not encouraged. Better than others in the aerospace industry. Overall it is a good company to work for if you are in the right department.
Raytheon Technologies' Collins Aerospace has quietly created a new business unit that executives say will allow the company to build critical parts for next-generation military aircraft and hypersonic weapons.Does Collins Aerospace pay weekly? ›
No, you are paid bi-weekly.Who are the competitors of Collins Aerospace? ›
Collins Aerospace competitors include Safran USA, Thales, Rockwell Collins, Honeywell and GKN. Collins Aerospace ranks 1st in Overall Culture Score on Comparably vs its competitors.Does Hamilton Sundstrand still exist? ›
WINDSOR LOCKS — A storied name in the aerospace industry and in Connecticut's industrial past disappeared Friday when Hamilton Sundstrand officially was absorbed into the new UTC Aerospace Systems division of United Technologies Corp.
Urine test at the local Lab Corp. Does Collins Aerospace have a drug test policy? Yes, you will be required to pass a pre-hire drug screening.Did UTC buy Raytheon? ›
Gregory Hayes will remain at the helm
Gregory Hayes, chief executive officer of UTC, will hold the top job at Raytheon Technologies Corp., or RTC. UTC shareholders will own 57 percent of Raytheon Technologies and UTC will control eight of the 15 board seats.
UTC ranked No. 51 in the 2018 Fortune 500 list of the largest United States corporations by total revenue.Why did UTC merge with Raytheon? ›
United Technologies and Raytheon have agreed to merge, the companies said Sunday afternoon, crafting an all-stock deal that would create a giant evenly balanced between civil aerospace and defense that may be better positioned to handle cost pressures and uncertain prospects in both sectors.What is the lowest salary for an aerospace engineer? ›
The median annual wage for aerospace engineers was $122,270 in May 2021. The median wage is the wage at which half the workers in an occupation earned more than that amount and half earned less. The lowest 10 percent earned less than $77,440, and the highest 10 percent earned more than $168,370.Do aerospace engineers make 6 figures? ›
The United States Bureau of Labor Statistics (BLS) reports that the national median salary for aerospace engineers is $122,270 per year . The range of salaries can vary significantly, with the lowest 10% of earners making less than $77,440 per year and the highest 10% making above $168,370 per year.What is the best aerospace company to work for? ›
Top Aerospace & Defense employers hiring near you include Boeing with an employee rating of 3.8 out of 5, Lockheed Martin rated 4.1 out of 5, Northrop Grumman with a rating of 4.0 out of 5, Raytheon Technologies with a 3.8 out of 5, and Leidos rated 3.9 out of 5 by employees.Do aerospace companies pay well? ›
Average Aerospace hourly pay ranges from approximately $11.71 per hour for Manufacturing Specialist to $89.50 per hour for Data Engineer. The average Aerospace salary ranges from approximately $38,642 per year for Clerical Assistant to $163,138 per year for Director of Finance.Where is the highest demand for aerospace engineers? ›
Aerospace engineers are in high demand in cities like Hartford, Connecticut; Philadelphia, Pennsylvania; Boston and Cambridge, Massachusetts; and Washington, D.C.
~1,000. Interns and co-ops join the Collins Aerospace team every year across the U.S.
But good survival stories are hard to resist. Guns were never carried aboard U.S. spacecraft. Instead, a sharp machete served as the most serious armament for a jungle landing.How many rounds of interview are in Collins Aerospace? ›
The majority of employees think that Collins Aerospace interview questions are average and rate their experience a B+ or 76/100. The average employee completed 1 rounds of the interview process and received a response within within a week.Do you need a degree to work at Collins Aerospace? ›
Bachelor's degree and 8 years of prior relevant experience OR. Advanced Degree in a related field and minimum 5 years of experience OR. In absence of a degree, 12 years of relevant experience is required.
Proactive work teams helping you at every level of your career and every level at the company. Management is good at their job and they do know the product. The company as a whole is full of people that know what they are doing and are very professional. The work place is fun and the people to respect each other.Is Collins Aerospace a Fortune 500 company? ›
Our annual ranking of America's largest corporations.
|Fortune 500 rank||462|
|% change from 2008||-6.3|
- Boeing (BA) Boeing is one of America's biggest multinational corporations involved in the manufacturing of aerospace products. ...
- Lockheed Martin (LMT) ...
- General Dynamics (GD) ...
- Northrop Grumman (NOC) ...
- Raytheon Technologies (RTN)
Rockwell Collins - One of the best product based company in Avionics.Who bought Hamilton Sundstrand? ›
New Jersey real estate developer buys former Hamilton Sundstrand property outside Bradley Airport for $1.9M. The Silverman Group bought a 199,000-square-foot industrial building and 40 acres just outside Bradley International Airport for $1.9 million in December.What does Hamilton Sundstrand make? ›
Hamilton Sundstrand designs and manufactures aerospace systems for commercial, regional, corporate, and military aircrafts. It is based in Windsor Locks, Connecticut.Is Raytheon bigger than Boeing? ›
Boeing's brand is ranked #132 in the list of Global Top 1000 Brands, as rated by customers of Boeing. Their current market cap is $147.47B. Raytheon Technologies's brand is ranked #635 in the list of Global Top 1000 Brands, as rated by customers of Raytheon Technologies.Who is Raytheon's biggest customer? ›
- #1 Customer: The U.S. Government. Raytheon's total sales to the U.S. Government, excluding foreign military sales, were: ...
- International Sales and Foreign Military Sales (FMS) ...
- Raytheon's Markets.
Raytheon Technologies serves commercial, military, and government customers around the world. Perhaps best known for its commercial airplanes, Boeing is the world's largest aerospace company and also designs and manufactures rockets, satellites, missiles, telecommunications equipment, helicopters, and military planes.What is a 7 tier drug test? ›
Standard 7-panel test: typically looks for marijuana, cocaine, opiates, PCP, amphetamines, benzodiazepines, & barbiturates.What drugs will make you fail a DOT drug test? ›
- Opiates – opium and codeine derivatives.
- Amphetamines and methamphetamines.
- Phencyclidine – PCP.
5 Panel Drug Tests
A standard 5 panel drug urine test is the drug test most frequently used by government agencies and private employers. A 5 panel drug test typically tests for commonly abused substances, including THC, Opiates, PCP, Cocaine, and Amphetamines.
As a result of a subsidiary of United Technologies Corporation (“UTC”) merging with and into Raytheon Company (“Raytheon” and, such transaction, the “Merger”), all shares of Raytheon common stock have been canceled and converted into the right to receive 2.3348 shares of UTC common stock, plus cash in lieu of ...Does BlackRock own Raytheon? ›
Top 10 Owners of Raytheon Technologies Corp.
|Stockholder||BlackRock Fund Advisors|
|Total value ($)||6,006,824,586|
Raytheon, Coca-Cola join halt to Russia operations.Which is Fortune 1 company in world? ›
Apple is the most profitable Fortune 500 company with profits of $59 billion.What is the RANK 1 Fortune 500 company? ›
WASHINGTON — Honeywell has abandoned its efforts to acquire United Technology Corp., the company announced Tuesday. The announcement came days after Honeywell publicly released details of its $90.7 billion offer, which UTC turned down.What does Raytheon merger mean for stockholders? ›
Raytheon shareholders will receive 2.3348 shares in the new company for each share of Raytheon that they own. The UTX Chairman and CEO will become the Executive Chairman for two years after the merger.Is Raytheon Technologies laying off? ›
114 Army analysts face layoffs as Raytheon blurs future of $173M contract at Ft. Irwin. A Northern Virginia-based firm says it's shuttering an intelligence unit at the U.S. Army National Training Center with layoffs and a permanent facility closure in two months, as recent moves by Raytheon Technologies Corp.Why did UTC buy Rockwell Collins? ›
“This acquisition adds tremendous capabilities to our aerospace businesses and strengthens our complementary offerings of technologically advanced aerospace systems,” said UTC Chairman and Chief Executive Officer Greg Hayes.What is Raytheon mission statement? ›
Raytheon Technologies Mission Statement
Raytheon aspires to be the most admired defense and aerospace systems company through our world-class people, innovation and technology.
Urine test at the local Lab Corp.What is Collins Aerospace 401k match? ›
Receive 100% employer match up to 6%
Collins Aerospace: Overview. Collins Aerospace is a unit of Raytheon Technologies Corp, technology in global aerospace and defense industry. The company provides electronics products, displays, flight control, interior products, and information management systems and among others.What are the 3 key points of the mission statement? ›
The three components of a mission statement include the purpose, values, and goals of the company.What are the 3 key things a mission statement should have? ›
Typically, a mission statement includes a basic description of the company, its purpose, and its goals.Can a job still hire you if you fail a drug test? ›
Can You Still Get Hired If You Fail a Drug Test? For the most part, no. If the test result is proven to be legitimate (especially after multiple retests), you will most likely lose your job. If drug testing was part of a screening application, the company will probably revoke your job offer.Is 7% a good 401k match? ›
The Bottom Line
Many employers match as much as 50 cents on the dollar, on up to 6% of your salary. Most advisors recommend contributing enough to get the maximum match. Turning down free money doesn't make sense unless the fund is so bad that you're losing most of it to fees and substandard returns.
Q: What does 6% 401k match means? A: This means that the employer is matching up to a total of 6% of an employee's overall compensation to his or her 401k account on top of what the employee is contributing. So if an employee is earning $50,000 per year, the employer's match would not exceed $3,000.Is 401k 6% match good? ›
The Bottom Line. The most common employer match is dollar for dollar of up to 6% of your salary³. Most financial advisors recommend contributing at least enough to get the maximum employer 401K match. But more is always better to help save the most for retirement.