Raytheon Aircraft Handles Summer's Heat
Company Ponders Selling Beech, Hawker...
The rumors about Beechcraft and Hawker being up for sale just might be true. Raytheon's new CEO William Swanson recently told Bloomberg News he'd consider selling the aircraft division after fixing what ails it. "As soon as the market wakes up and people realize there is a rationalization that needs to take place, we'll be in the right position to be able to do that," Swanson said. The aircraft division is being extensively revamped, much to the disappointment of some workers who are seeing in-house jobs being sent to contractors. Raytheon has said that it wants to do only final assembly at its factories, mostly in Wichita. Swanson's comments might indicate the company is paring operations to make the aircraft division more attractive to potential buyers. It lost $4 million last year compared to $760 million in 2001. "You don't want to make a decision like that when you have to put your business in the right shape," he said. One thing is certain: The new CEO doesn't appear to have much attachment to the airplane business. He told Bloomberg it's not one of Raytheon's "core" businesses. Raytheon makes most of its money in electronics, particularly air traffic control and military equipment. Cessna has been rumored to be among the potential buyers and even Mooney Aerospace Group has expressed an interest.
... And Deals With SEC Probe ...
Raytheon has also come under the Security and Exchange Commission's microscope lately, compounding the headaches it's already enduring in the soft post-9/11 economy. In January, the SEC began to look into how Raytheon Aircraft recognized revenues from 1997 to 2001. The investigation specifically focused on the manufacturer's regional aircraft business. The SEC's investigations -- the third federal inquiry for Raytheon Co. since 2001-- focuses on a transaction in October 2001 in which Raytheon took a $693 million charge on its 19-seat commuter aircraft business. In one of its filings, the SEC wrote, "This matter involves violations of Regulation FD by Raytheon through its Chief Financial Officer, (Frank) Caine. Caine selectively disclosed quarterly and semi-annual earnings guidance -- the prototypical disclosures Regulation FD aimed to prohibit -- to sell-side equity analysts (collectively, the 'Street'). Caine's disclosures concerned Raytheon's estimate of its expected quarterly distribution of earnings per share ('EPS') for 2001 overall, and for the first quarter in particular. Specifically, Caine communicated to the analysts that their first quarter EPS estimates were too high." Caine resigned from Raytheon in April 2000.
... As New Key Personnel Are Named
Raytheon Aircraft Services has named two executives to its leadership team. Harold (Skip) Madsen is Vice President/General Manager of Raytheon Aircraft Services, and Chuck Curry is the General Manager-RAS San Antonio. Madsen -- a former president and chief operating officer of Executive Aircraft Corp. of Wichita -- assumes all responsibility for the company's 12 fixed-base operations. Curry -- former co-owner of McKinney, Texas-based Curry & Curry Consulting, Inc.-- will be responsible for overall management and growing San Antonio's service and modification business.