Rockwell Collins names Collins Aerospace executive office, division locations

CEDAR RAPIDS - The current home of Rockwell Collins would hang on to two sections of the company's business after it is acquired by United Technologies Corp., even as executives move to Florida.

Rockwell Collins announced Thursday a proposed organizational structure for Collins Aerospace Systems, the business it would form by combining with UTC Aerospace Systems.

While Collins Aerospace executives and leadership would move to Palm Beach County, Fla., six segments of the future business would be based out of five cities where Rockwell and UTC have existing operations. Avionics and mission systems work will be based in Cedar Rapids; aerostructures in Chula Vista, Calif.; interiors in Winston-Salem, N.C.; mechanical systems in Charlotte, N.C.; and power and controls in Windsor Locks, Conn.

It was not clear Thursday how the structure would affect employee counts in Cedar Rapids and other cities, or how many leadership members would work out of Florida.

The six-division structure is designed to 'limit disruption, and employee relocations are expected to be minimal,” Rockwell said in a statement. The company said it 'will maintain significant footprints” in Cedar Rapids and Charlotte, but did not provide numbers.

After the acquisition closes, 'a small executive leadership office” will work out of an existing UTC site in Palm Beach County.

Rockwell said it would not take further questions beyond Thursday's statement. The organizational structure 'will continue to evolve,” it said.

The announcement comes as a part of UTC's planned acquisition of Rockwell, valued at $30 billion, including debt. Current Rockwell Chairman, Chief Executive Officer and President Kelly Ortberg will serve as chief executive officer of Collins Aerospace, with UTC Aerospace President Dave Gitlin serving as president.

Rockwell held town hall meetings with employees Thursday to explain the proposed structure.

Ortberg previously had told The Gazette the placement of the Collins Aerospace headquarters would affect only a small number of employees.

'I think it's going to be a small group, and wherever that is, it's not going to have a significant impact on employment levels,” Ortberg said in a Feb. 1 interview.

Rockwell is the largest employer in Cedar Rapids, where it has about 8,000 employees. The company employs approximately 30,000 people around the world.

UTC Aerospace Systems is based in Charlotte, N.C., and has about 40,000 employees globally.

‘POSITIVE OUTCOME'

Cedar Rapids City Manager Jeff Pomeranz said the city 'fared well” in Thursday's announcement, as two of the six segments will be based here.

'We believe that this is a very positive outcome for Cedar Rapids and for the state,” Pomeranz told The Gazette. 'While we know that decisions are not final, we're very optimistic about the potential for growth that this alignment holds for both Cedar Rapids and the state.

'We'll continue to stay in close contact with Rockwell leadership.”

Pomeranz said there was not a competition for the executive office location and neither Rockwell or UTC asked for incentives for the office.

Brenna Smith, a spokeswoman for Iowa Gov. Kim Reynolds, said the governor's office is pleased the proposed structure will have two units in Cedar Rapids. Even so, she expressed disappointment executives would move to Florida.

'We are disappointed to learn the new executive offices of Collins Aerospace will be in Florida, as we have valued Rockwell Collins CEO Kelly Ortberg's leadership, vision and presence in Iowa and are sad to learn of his departure,” Smith said in an email.

'We look forward to the company's continued investments in our state and stand ready to support United Technologies Corp. as it moves through this transition.”

Palm Beach County is familiar territory for UTC and Rockwell as both already have operations in the county or in nearby cities.

For example, UTC subsidiary Pratt & Whitney has employees in West Palm Beach and Rockwell has employees in Melbourne, Fla. Palm Beach County was also the headquarters for B/E Aerospace, the airplane interior maker, before Rockwell acquired it last year.

Sikorsky, a helicopter manufacturer with operations in West Palm Beach, previously was owned by UTC, but is now a subsidiary of Lockheed Martin.

A site selector The Gazette interviewed in January said Palm Beach County and Florida would be a good fit for the Collins Aerospace home base. The area, he said at the time, has a concentration of aerospace companies, access to major airports and a favorable business climate.

UTC expects its acquisition of Rockwell to be complete later this year, possibly as early as mid-2018.

WHAT ABOUT AFTER THE ACQUISITION?

The close of the Rockwell acquisition may not be the end of changes for what will become Collins Aerospace.

UTC is a conglomerate of companies based in Farmington, Conn. In addition to UTC Aerospace Systems, its business divisions include jet engine maker Pratt & Whitney, elevator maker Otis and air-conditioner manufacturer Carrier.

On Wednesday, UTC CEO Greg Hayes acknowledged his company has considered a three-way breakup once it finishes acquiring Rockwell.

Such a breakup, if pursued, likely would see UTC split into an aerospace company, an elevator company and an air-conditioner company, Hayes said at a conference in Miami, according to Bloomberg News.

'The question we all have to ask is, is UTC a more valuable property together or is UTC better off in three separate businesses ...

,” Hayes said. 'That's a question for the board. That's a question we continue to study.”

A decision on the split would occur by the end of the year, Hayes said.

Rockwell Collins and UTC Aerospace Systems announced the locations of six divisions, pending the avionics company acquisition by United Technologies Corp. Two of them would be in Cedar Rapids.

Here is the complete list:

' Aerostructures - Chula Vista, Calif.

' Avionics - Cedar Rapids

' Interiors - Winston-Salem, N.C.

' Mechanical Systems - Charlotte, N.C.

' Mission Systems - Cedar Rapids

' Power and Controls - Windsor Locks, Conn.

Source: Rockwell Collins

l Comments: (319) 398-8366; matthew.patane@thegazette.com