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Collins Aerospace, Cedar Rapids’ largest employer, had $40 million in cost reductions in the first quarter of 2021, and with more cuts likely still to come, according to parent company Raytheon Technologies’ earnings call Tuesday morning.
It’s part of Raytheon Technologies’ companywide cost-cutting effort following the 2020 merger between United Technologies Corp. and Raytheon Co.
Raytheon upped its target for post-merger cost reductions Tuesday from $1 billion to $1.3 billion over a four-year span. So far, the company has made about $400 million in cuts.
“There is a lot of work yet to do,” said Greg Hayes, Raytheon’s CEO. “We’ve done many of the hard things in terms of reducing staff, making sure the policies are consistent, but again, not done with that.”
Hayes said the biggest opportunity for future cost "synergies“ come with reducing data centers and connecting digital systems.
Collins Aerospace laid off 72 Cedar Rapids employees last September and 65 employees in January from its Decorah and Bellevue facilities.
The cuts have occurred as Hayes received $18.6 million and Stephen Timm, president of Collins Aerospace, received $4.8 million in total compensation in 2020, according to a March filing with the U.S. Securities and Exchange Commission.
Collins Aerospace’s adjusted operating profit in the first quarter was down 74 percent compared to the first quarter of 2020, and adjusted sales were down 32 percent.
Raytheon leaders attributed the numbers to the continued impact of coronavirus pandemic on commercial air travel.
“The shape of the commercial aero(space) recovery remains critical to our outlook,” said Neil Mitchill, the company’s chief financial officer. “We’re encouraged by the pace of the vaccine distribution, and we’re seeing signs of increasing travel demand, particularly on many domestic routes.”
Defense sales were down 3 percent in the quarter, but it was up 4 percent when excluding the military GPS unit it sold to BAE Systems and another unit it divested.
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