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Collins Aerospace parent company Raytheon Technologies plans to cut more than 15,000 jobs
With the coronavirus pandemic deeply cutting into commercial aerospace business for the past six months, Raytheon Technologies, parent company of Collins Aerospace, intends to cut more than 15,000 jobs, including 12 percent of Collins Aerospace's costs.
Chief Executive Officer Greg Hayes, who made the announcement during a Morgan Stanley investor analysts' call Wednesday, specifically mentioned cuts occurring at Collins Aerospace, Cedar Rapids' largest employer.
Collins Aerospace spokeswoman Pam Tvrdy-Cleary told The Gazette Thursday many of the cuts 'have already been implemented or are underway.”
Collins Aerospace laid off 72 employees on Sept. 4, according to a WARN notice filed with Iowa Workforce Development.
Tverdy-Cleary said Collins Aerospace is not providing 'site-by-site details” of how many jobs would be affected. Collins Aerospace has about 10,000 employees in Iowa, based in Cedar Rapids, Coralville, Decorah, Bellevue and Manchester.
Manufacturer Pratt and Whitney, based in East Hartford, Conn., and Raytheon's corporate offices also will see layoffs, Hayes said. Pratt and Whitney will experience a 20 percent reduction in staff.
COVID-19 has hit the air travel industry especially hard as people have put long-distance travel on hold.
In the second quarter of 2020, Collins Aerospace's operating profit was down 125 percent compared to the second quarter of 2019.
Raytheon corporate Vice President Neil Mitchell said in the most recent earnings call that drop was 'driven primarily by the adverse impacts of COVID-19 on the aerospace industry.”
Hayes does not anticipate commercial air traffic returning to pre-pandemic levels until 2023.
The 12 percent cost reductions will be in made in Raytheon's selling, general and administrative divisions, Hayes said.
Raytheon Technologies's defense business 'remains resilient and strong,” though, Hayes said Wednesday. The company will 'probably hire” 8,200 people on the defense side of the business.
'It's a big reduction on the commercial side,” Hayes said. 'Strong growth on the defense side.
'Those head count reductions are nearly double the previous estimate of about 8,500 that we gave you back in July.”
It's part of $2 billion in overall cost reductions and $4 billion in cash conservation for the company in 2020.
'And we're not done yet looking for further ways to reduce structural costs in all of our businesses,” Hayes told the analysts on Wednesday's conference call. 'Not just on the commercial side but on the defense side as well.”
Hayes said the company remains 'committed” to returning $18 billion to $20 billion to shareholders over the next four years, though.
Collins Aerospace officially has been part of Raytheon Technologies since April, when the $135 billion merger between United Technologies Corp. and Raytheon Co. was finalized. United Technologies Corp. bought Collins Aerospace for $30 billion in 2018.
Reporters were not allowed to ask questions in Wednesday's analysts' call.
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