
Rockwell Collinsโ current headquarters in Cedar Rapids. PHOTO ROCKWELL
By Dave DeWitte
dave@corridorbusiness.com
The first organizational outline for the new Collins Aerospace Systems business to be formed through the acquisition of Rockwell Collins by United Technologies Corp. (UTC) emerged Feb. 22, although it may not be the last.
For the Corridor, the news was mixed. UTC and Rockwell Collins anยญnounced Collins Aerospace Systems will be headquartered 1,200 miles away in Palm Beach County, Florida. Some had hoped that Cedar Rapids, where Rockยญwell is headquartered, would have a shot at becoming the home for the new busiยญness unit.
Instead, the city was designated as the lead site for two of the six strategic business units that will make up the new organizaยญtion: Avionics and Mission Systems.
Local economic development leaders remained calm.
Cedar Rapids Metro Economic Alliance Executive Director Doug Neumann said the announcement was in line with his expectations from discussions held with Rockwell Collins leaders in the preceding weeks. Although some senior leadership will be moving to Florida, he said it will be โa small numberโ based on those conยญversations.
Communications with Rockwell Colยญlins on the effects of the acquisition have been good, according to Mr. Neumann.
โWe continue to hear signals about room and opportunity to grow,โ he said.
Employees were told that the headยญcount at the senior leadership office in Florida will be only 20 to 40, and that it will be the location for five of nine senior leadership functions, including human resources and communications, finance, legal, customer and account management, and strategy and development.
Three of the leadership functions โ afยญtermarket services, information technolยญogy and operations, supply chain and quality โ will be based in Charlotte, North Carolina. Engineering will be based in Windsor Locks, Connecticut.
Collins Aerospace will be about triple the current size of Rockwell Collins. The strategic business unit locations and relatยญed decisions were intended to minimize disruption, UTC said in a statement.
The plan will continue to evolve, leadยญers said, as integration planning continยญues. One reason the new organizational structure could prove temporary is beยญcause of ongoing discussions within UTC about breaking up the company after the Rockwell acquisition is completed. The status of those discussions was shared with Wall Street analysts at a recent Barยญclays investor conference.
โWeโre not going to do anything with the portfolio until we get done with [Rockwell] Collins,โ UTC Chairman, Presยญident and CEO Gregory Hayes said at the conference. โWe canโt, because weโre exยญchanging UTX stock for a piece of Collins โฆ but we continue to look.โ
Mr. Hayes said the question being asked is, โIs UTC a more valuable properยญty together? Or is UTC better off in three separate businesses?โ
He said one business would be the aerospace business, with about $45-50 billion in revenues, while another would be UTCโs $12 billion Otis elevator busiยญness. A third would be UTCโs climate control business, with revenues of $17- $18 billion.
Mr. Hayes called them โtough, tough questions.โ
โItโs clear that thereโs no easy answer,โ he added, citing listing some of the cost advantages of having the companies unยญder one corporate umbrella, such as the ability to share services on a larger scale and cost โdis-synergiesโ to splitting up the company.
โI would say by the end of the year, weโll come back and have some answers in terms of what we really think we should do with the portfolio long-term, and then we can have this discussion again,โ he said.