Financial Shakeup Comes As Company Must Raise $1 Billion
Faced with a global economic crisis that shows no signs of
ebbing, this week Textron released two executives formerly
responsible for the company's finances... and its CEO hinted at the
possible sale of one of Textron's aerospace subsidiaries.
Textron announced Monday that Chief Financial Officer Ted French
and Buell Jay Carter, Chief Operating Officer of Textron Financial,
were shown the door. Forbes reports Textron SVP Richard Yates will
serve as acting CFO in French's place, while Textron Financial --
which has seen massive losses tied to the current recession -- will
report directly to Textron President Scott C. Donnelly.
"Under Scott's and Warren's leadership, I am confident we will
successfully execute the strategy we've put in place for Textron
Financial at a more rapid pace," Chairman Lewis B. Campbell
said.
It's not difficult to see why
Textron Financial is ailing. In addition to providing loans on such
high-dollar items as Cessna business jets, the financial department
also has funds tied up in golf courses and vacation resorts. Those
aren't the kinds of assets to have in today's economy... and
Textron Financial is offloading those properties as fast as it
can.
Textron previously announced in December it would focus on its
manufacturing operations -- in addition to Cessna, Textron also
owns Bell Helicopter, and entities such as E-Z-GO golf carts --
leaving the financial aspects to other entities. While that may be
a sound plan in the long run, in the short term investors are
reportedly frustrated by plummeting sales, due to the lack of
available credit for potential buyers.
The Fort Worth Star-Telegram reports that uneasiness may lead
Textron to attempt to sell off one of its two aerospace companies.
Speaking at a Barclays Capital conference with investors Tuesday,
Textron CEO Lewis Campbell said the company must increase liquidity
by at least $1 billion in the first half of 2009.
Selling off Bell or Cessna would be one way towards attaining
that goal... and while it's hard to say for certain which company
might be put on the sale block, it appears Bell would be the more
enticing entity for potential buyers.
While both companies have seen commercial sales plunge over the
past several months, and have laid off workers, Bell still has a
number of military orders to fulfill, that are less susceptible to
economic trends.