Business

Rockwell Collins cutting workforce by 2 to 3 percent

Business jet market down, airlines servicing equipment

Rockwell Collins in an aerial photograph in Cedar Rapids on Saturday, July 9, 2016. (Stephen Mally/The Gazette)
Rockwell Collins in an aerial photograph in Cedar Rapids on Saturday, July 9, 2016. (Stephen Mally/The Gazette)

CEDAR RAPIDS — Rockwell Collins, reacting to a continued slowdown in the business jet market and cost-saving measures by airlines, has begun reducing its global workforce.

Its aim is to cut jobs by up to two to three percent over the current fiscal year that ends on Sept. 30, 2017.

The Cedar Rapids-based avionics, communications and information-management provider employs roughly 20,000 people worldwide, which could mean the elimination of as many as 400 to 600 jobs across all sectors of the business.

Spokesman Josh Baynes said the workforce reduction, which was announced to employees this week, will be accomplished through a combination of layoffs, retirements and attrition, and not filling open positions.

“It’s hard to say the exact effect on Cedar Rapids or Iowa employees, especially if you think about attrition throughout the fiscal year, but some will be affected,” Baynes said Friday.

Baynes said another factor prompting the latest workforce reductions is a decision by some airlines to service more of their own equipment. That has reduced revenue for the company’s air transport aftermarket.

Rockwell Collins also has changed its vacation policy to restricting employees to rolling over up to one week a year instead of two weeks. Baynes said the company also has suspended new enrollments for its tuition-reimbursement program until the end of the current fiscal year.

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“We also are delaying merit increases until August,” Baynes said. “Normally they would come out in January.”

Baynes said bargaining unit employees will not be affected by the delayed merit increases.

Rockwell Collins in September 2015 announced plans for a similar workforce reduction due to the sharp decline in the business aviation market, which accounts for 20 percent of the company’s overall revenues.

The company offered incentives that year to non-bargaining unit employees — those not represented by unions — who would take early retirement. Almost 500 accepted the offer.

Rockwell Collins President and CEO Kelly Ortberg told shareholders at the company’s annual meeting in February that the business jet market was not expected to improve significantly this year.

“It has been down for the last seven years, so I think we are in a ‘new normal’ of pretty low growth,” Ortberg said.

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