For Sale: Raytheon Aircraft? | Aero-News Network
Aero-News Network
RSS icon RSS feed
podcast icon MP3 podcast
Subscribe Aero-News e-mail Newsletter Subscribe

Airborne Unlimited -- Recent Daily Episodes

Episode Date

Monday

Tuesday

Wednesday

Thursday

Friday

Airborne On ANN

Airborne 09.26.16

Airborne 09.27.16

Airborne 09.28.16

Airborne 09.29.16

Airborne 09.30.16

Airborne Hi-Def On YouTube

Airborne 09.26.16

Airborne 09.27.16

Airborne 09.28.16

Airborne 09.29.16

Airborne 09.30.16

Mon, Sep 22, 2003

For Sale: Raytheon Aircraft?

Pssst, Buddy... Wanna Buy An Airplane Manufacturer?

Could Raytheon be looking to sell its aviation assets? The Wichita Eagle quotes Wall Street  aviation analysts who say it's just a matter of time before Raytheon puts its Wichita aircraft division on the market once again.

"I think it's a matter of time and price and having it into shape," said SG Cowen aerospace analyst Cai von Rumohr.

The issue came up recently when Raytheon CEO William Swanson was asked whether divestiture of Raytheon Aircraft made sense.

"The one thing I know is that you don't make decisions like that when you have to put your business in the right shape," Swanson said. Cryptic, yes, but is that a message to the industry?

It's "no secret" that the aircraft business is "not core," Swanson said during Morgan Stanley's "CEOs Unplugged Industrials Conference" earlier this month.

The aircraft division's classification "as a non-core business is a pretty clear way of saying when the opportunity is there and when the conditions are right, we'll sell it," said JSA Research aerospace analyst Paul Nisbet.

Raytheon is "fully committed to the aircraft business," said Jackie Berger, Raytheon Aircraft spokeswoman. "Our stated commitment is to return it to pre-eminence in the industry."

After losing $1 billion over the past three years and eating up almost $1.5 billion in cash, Raytheon Aircraft executives want to return the company to profitability.

Swanson said there must be consolidation -- a "rationalization" in his words -- in the general aviation industry.

But before that can happen, the "right structure" must be in place within the companies -- they must have the right production rates, cost structure and supply chain strategy, he said. In other words, GA manufacturing industry-wide is broken and it's going to take some major changes to fix it. Now, Swanson says, the issue becomes one of timing.

"You don't want to do that while something's swimming funny," he said. "I always say the sharks come out at that point. So you get the business right.... It's no secret that RAC (Raytheon Aircraft Co.) is not core."

Raytheon is committed to "getting it right and supporting (Raytheon Aircraft CEO) Jim (Schuster) and his team as they do what they say they're going to do, and I'm pleased that we've got that team doing it," Swanson told investors.

Schuster has been working to fix the bottom line. He announced earlier this year that Raytheon Aircraft is cutting back on what it manufactures within the plant. By 2006, he told employees, the plant will be doing final assembly, but will not handle small parts and assemblies in Wichita.

One major project on Raytheon Aircraft's list of things to do -- perhaps the top priority -- is getting the Hawker Horizon business jet certified and ready for delivery.

Swanson was asked at the analyst meeting whether it would be easier to sell the aircraft company after the Hawker Horizon is certified.

"Yeah," he said. "Exactly." Hmmm. That throws a bit more fuel on the divestiture fire.

Three years ago, Raytheon was on the hunt for a buyer for Raytheon Aircraft. But Raytheon  took its aircraft business off the market when it couldn't find a taker, according to analysts. Some of them said that the $4 billion asking price was simply too high.

If the company put Raytheon Aircraft up for sale now, it wouldn't get its asking price said von Rumohr, the SG Cowen analyst.

It must get costs down and "get into the black so you can command the price you'd like to get," he said. "That's kind of where I think they are."

FMI: www.raytheonaircraft.com

Advertisement

More News

Airborne 09.28.16: NEW DJI Mavic!, EAA's Next STC, Sean Tucker Honored

Also: LA Times v SMO, APS UAT Program, Gordon Bennett 2016, Tucson Control Tower, Hubble Find, Southwest Airlines, Iowa State Another new small unmanned aerial system is now on the>[...]

AeroSports Update: Sean Tucker Is Honored By The CAF

Aerobatic Pilot Sean Tucker Receives The 2016 Lloyd P. Nolen Lifetime Achievement In Aviation Award Aerobatic pilot Sean D. Tucker has been named the recipient of the Lloyd P. Nole>[...]

Elon Musk Outlines Vision For Martian City

Rockets Carrying As Many As 200 People Could Leave For The Neighboring Planet In 'Decades' No one can deny that Elon Musk thinks big, and in a speech at the International Astronaut>[...]

Dutch Investigators Release Findings In MH17 Shootdown

Determines That The Missile 'Came From Russia' The Buk missile that destroyed Malaysia Airlines Flight MH17 over eastern Ukraine in 2014 came from Russia, according to a Dutch-led >[...]

ForeFlight, SiriusXM Introduce Satellite Aviation Weather Service

Weather And Other Key Information Available Using The SXAR1 Portable Receiver Today ForeFlight and SiriusXM introduced SiriusXM Aviation weather service on the newest version of Fo>[...]

blog comments powered by Disqus



Advertisement

Advertisement

Podcasts

Advertisement

© 2007 - 2016 Web Development & Design by Pauli Systems, LC