Textron Aviation’s ‘Fast and Furious’ Year

Textron Aviation recently celebrated its one-year anniversary, following a busy 12 months in which the company integrated teams; facilities; labor agreements; support; and the iconic brands of Cessna, Beechcraft and Hawker.

Textron Aviation was born out of Textron’s $1.4 billion acquisition of Beechcraft on March 14 last year. The merger gave Textron an installed base of 250,000 aircraft, an employee base of approximately 10,800 workers worldwide, support network of 21 company-owned facilities and the promise of $65 million in “synergies” in 2014 and $85 million over two to three years.

“We quickly aligned our businesses and became one company,” said David Rosenberg, vice president of integration and strategy.

The results were almost immediate. The combined operation has been profitable since the merger, and the synergies have been on schedule, if not ahead of schedule. “We brought $4.56 billion worth of [annual] revenue and have operating profits of $234 million, which is substantial,” said Kriya Shortt, senior vice president of sales and marketing for Textron Aviation. “It’s been an incredibly exciting year for us, and we feel very proud of the accomplishments of the combined team.”

When scuttlebutt first surfaced of a potential Textron acquisition of Beechcraft, observers wondered whether Beechcraft would be absorbed into Cessna and disappear. But Textron put those questions to rest immediately after its acquisition plans were revealed. The company would maintain the brands but operate them as a combined entity. “We made it clear from day one,” Rosenberg said.

The decision was key to establishing ties with a new Beechcraft and Hawker customer base that Textron recognized as “fiercely loyal,” while strengthening relationships with the existing and also loyal Cessna customer base. It also helped bring on board an embattled Beechcraft workforce that had persevered through a potential sale that collapsed (to Chinese firm Superior Aviation), a Chapter 11 bankruptcy proceeding and a significant restructuring that included the shuttering of all the Hawker jet lines.

Integration Efforts

After Textron announced its intention to purchase Beechcraft, the companies established an organizing committee that paved the way for the integration and the roll-out of the newly formed Textron Aviation as soon as the acquisition was completed.

The company immediately stood up operating units that integrated business lines. Rosenberg said the first order of business was to incorporate best practices of both companies. The company also immediately created a leadership team comprising executives from both Cessna and Beechcraft. Rosenberg himself came from Beechcraft and his job was to lead integration.

The merger was not without loss. More than half a dozen senior executives, from both Beechcraft and Cessna, left the new company or lost their positions. The merger also resulted in approximately 750 layoffs. Rosenberg noted that was one of the early and most difficult tasks.

At the same time, though, labor leaders were brought on board through the transition, and as a result the International Association of Machinists and Aerospace Workers agreed to unify the contracts of Cessna and Beechcraft covering 4,100 workers. This agreement came even though the Cessna contract was not up until 2017. Rosenberg listed the labor agreement as among the most important achievements last year.

The company reached out to customers to ensure the continued support not only of the Cessna and Beechcraft product lines, but also the Hawker jets that are now out of production. Beechcraft had previously considered discontinuing certain support efforts for a few of the Hawker models. 

Not only did it promise to honor warranties and support aircraft, but it had since rolled out a series of new programs to expand those efforts. The most recent is an expansion of the ProAdvantage fixed-price maintenance program to Hawkers. That program was originally developed for Cessna Citations and extended to Beechcraft King Airs last year. The Hawkers were added in March.

Beyond warranty and other support programs, Textron Aviation began adding capabilities to its service center network to ensure each one could support all three brands. That support is in place through mobile support teams now, and the company is adding in-house capabilities at the centers, said Rosenberg. This effort will continue throughout this year. Parts distribution was a key focus of the support effort, he said. Beechcraft had used third-party support. Textron Aviation is bringing more of that in-house building up its inventories.

The integration is continuing with the facilities. Two companies across town now were operating as one. Executives were relocated. East (former Beechcraft) and West (former Cessna) campuses were established. Some work shifted, such as component work, and some facilities consolidated. Business and administration functions, including marketing, sales and the headquarters, moved to the West campus. That is also where the Cessna jets are produced. The East campus continues to make the turboprops and pistons. It also houses defense activity.

The company vacated some of its leased facilities and is in the process of consolidating some of its work into new “centers of excellence” (COE). It is turning the former Beechcraft composites facility, known as Plant III, into a COE. Rosenberg emphasized that the company has no plans to make composite aircraft but will use the technology for composite parts.

It is also establishing a fabrication COE, a move that capitalizes on Textron Aviation’s purchase of the Wichita-based aviation interiors manufacturing facility from UTC Aerospace Systems in January. The Wichita company had specialized in Citation and King Air furnishings, and the acquisition enabled Textron Aviation to bring that work in-house. The fabrication COE is slated for completion next year.

In Wichita, facilities and work have shifted, but Rosenberg said the overall footprint is about the same. Textron Aviation is downsizing in Chihuahua, Mexico, with plans to consolidate the Cessna and Beech facilities there. This may involve vacating at least one of the plants and possibly two in the region.

In addition to completing its support expansion and shifting of facilities, Textron Aviation is looking at leveraging technologies. Rosenberg noted that Cessna has been a “product development machine,” something that will benefit the Beechcraft product line. Beechcraft brings substantial expertise in special missions, an area where Cessna can grow.

Textron Aviation also has been looking across the product lines to see what might be incorporated in new products or retrofit programs. The company was recently spotted testing a Hawker 4000 with winglets. While that project will not result in the return of the Hawker 4000 to production, the technology could end up on a new aircraft.

One executive likened the process to rummaging through the attic to see what will be of use. But one thing is clear: Textron Aviation has no plans to return any of the Hawkers to production. President and CEO Scott Ernest made that statement shortly after the merger and Rosenberg more recently reinforced it.

The company emphasized that product development is moving forward at full speed, an effort that has strong backing by parent company Textron. As Textron was finalizing its purchase of Beechcraft, Cessna announced plans to bring the Citation CJ3+ to market and accomplished that in September last year. This was in addition to certifying the Citation X+, spooling up on Sovereign+ and M2 deliveries and launching the flight-test program of the Latitude.

“It’s exciting. It has been a fast and furious year,” Shortt said.