Aerostructures and aircraft systems specialist Triumph Group is now several months into a restructuring process. It has seen the U.S. company’s management team realign no fewer than 47 separate subsidiaries into 22 firms organized around four divisions: aerospace structures, precision components, integrated systems and product support. In late December 2015, former Raytheon and Lockheed Martin executive Dan Crowley was appointed president and CEO with a mandate to turn around a company that has been struggling, largely due to problems associated with its contracts for Boeing’s 747-8 widebody airliner and Bombardier’s delayed Global 7000 and 8000 business jet programs.
Over the next 18 months, Triumph is looking to sell several subsidiaries that no longer fit its business model, freeing up cash for growth and to pay down debt. The Pennsylvania-based group was founded in 1993, and after acquiring numerous smaller companies, it took a big leap into the Tier Two category of suppliers when it bought aerostructures group Vought in 2010. In an interview with AIN last month, Crowley said he intends to rationalize Triumph around a larger, stronger portfolio of capabilities.
For now, Boeing remains Triumph’s biggest customer, even though the monthly production rate for 747-8 components has dropped from seven to 0.5 shipsets. With 35 more shipsets to complete at an uneconomical rate under the current contract, Triumph was forced to take a charge of $161 million against fourth quarter results announced on May 4 as part of an overall $1.3 billion pre-tax charge that also took account of $399.8 million in development costs for the Global 7000/8000 and an estimated $645.1 million in goodwill impairment. Crowley explained that Triumph’s role on the Global 7000/8000 had been bid back in 2010 and that it had since spent more than anticipated, dealing with problems in reaching the required weight target for the new wing.
The company also contributes to the Boeing 787 and 737, as well as to the new KC-46 military transport, the V-22 tiltrotor and the C-17. It also makes components for the Airbus A320 and A330, and recently won a contract to make parts for the landing gear of the new Neo (new engine option) version of the European narrowbody. Crowley said that Triumph hopes to expand its capability in specialist products such as large aluminum stringers.
The Triumph facilities in Oklahoma and Texas make wing structures for Gulfstream’s G450 and G650 business jets. In January 2015, Spirit AeroSystems paid Triumph $160 million to take over the contract for wing assemblies on the G650 and G280. The company also is making some composite components for the new G500 and G600 models. It is a supplier to both Bell Helicopter and Sikorsky, and also builds fuselage sections for Embraer’s new E190 E2 airliner.
According to Crowley, the main focus of research and development work is on developing new manufacturing processes such as additive manufacturing and new designs for fuel controllers and Fadecs, as well as electrically-controlled alternatives to mechanical actuators. “We want to free up money to do more of this,” he told AIN. “We’re doing some additive manufacturing, we’re building up expertise in titanium, and we’re bringing in expertise to do things like laser centering and we’re doing a lot of tooling build-up.”
Crowley’s first order of business is to work with existing customers looking for improved pricing and performance for current work. “Restarting business development is the next priority and then organic growth, plus we need to be predictably profitable,” he said. “At Farnborough we’ll be emphasizing partnerships with Tier One OEMs and talking about new opportunities in integrated systems.”
After full-year fiscal 2016 results were buffetted by the high exceptional charges incurred in the fourth quarter, Triumph (Hall 4 Stand A88) restructured its existing $1 billion revolving credit facility and extended a $337.5 million loan to April 2021.