Textron Cost-Cutting Runs Deep


Process Began Before 9/11…

September 11 and the poor economy can only take part of the blame for Textron’s problems, according the company chairman. A year before the terrorist attacks, Lewis Campbell embarked on a reorganization of the company, which owns Cessna, Lycoming and a variety of other manufacturing interests. Layoffs and plant closures were inevitable to trim a corporation that was bloated with duplication and startling inefficiencies. “Ashamed to say we had 87 data centers around the country,” Campbell told Reuters. There were also 156 employee medical plans. Within a few years, the data centers will be consolidated into a handful and there are now just two available medical plans. Campbell said Cessna is now the corporation’s example of the new way of doing things at the plant level. Cessna is going to redesign production methods to produce the Mustang, its $2.3 million entry-level jet. “They’re committed to re-engineering their systems and rethinking how they run their economy.” All the change comes at a cost and it’s something Campbell has drilled into staff and management since the outset of the program. He told Reuters that “no position, no relationship, no friendship” will stand in the way of squeezing more earnings out of the company. And he’s unlikely to be making many friends with the 1,200 people who will be laid off in May and the 6,000 who will be furloughed for seven weeks starting in June. Cancellation of a big order from NetJets helped provide stimulus for those actions.

…Sales Go On, New Planes Fly

Being a PR person for Cessna can’t be the easiest job in times like these but they have dug up some positive things in recent weeks. For instance, the Civil Air Patrol ordered 15 Skylanes last week to use in its increasing emphasis on homeland security missions. The high-winged 182s are pitched as good for that type of surveillance work. Universities are also modernizing their fleets and Cessna sold seven 172Rs to Southern Illinois University Carbondale last week. The university traded in seven, 18-year-old 152s on the new Skyhawks, which host some of the latest flight and navigation technology that students need to learn. As for the future, Textron is convinced Cessna is poised for recovery, particularly in the business jet market. The company’s next-generation light business jet, the CJ3, flew for the first time Thursday. It’s basically a CJ2 with a longer cabin and tail cone, but the real creature comforts are for the pilots. The CJ3 features dual-channel FADEC-controlled Williams FJ44-3A engines and a state-of-the-art Collins avionics suite. The first CJ3 flew from McConnell Air Force Base to Wichita and, over the course of the 1.7-hour flight, pilots Dan Morris and Russ Williams lowered and raised everything and evaluated stability and flight characteristics. “The airplane reacted exactly as we anticipated,” said Morris. The $5.895 million jet (2003 dollars) will cruise at 417 knots with two pilots and four passengers over an IFR range of 1664 nautical miles. First deliveries are expected in the third quarter of 2004.