Collins Aerospace, Cedar Rapids’ largest employer, will seek $85 million in cost reductions in 2021, according to its parent company Raytheon Technologies’ earnings call Tuesday morning.
It comes as Collins Aerospace faced a 70 percent drop in adjusted operating revenue and 25 percent drop in adjusted sales in 2020.
Leaders from Raytheon Technologies directly attributed the depressed numbers to the impact of the coronavirus pandemic on the commercial aerospace industry.
“It was obviously one of the most challenging years for our company, the commercial aerospace industry at large and for everyone around the globe,” said Greg Hayes, Raytheon’s CEO.
In 2020’s fourth quarter alone, Collins Aerospace reported a 92 percent loss in adjusted operating revenue and 32 percent loss in adjusted sales compared to the fourth quarter of 2019.
Adjusted military sales was up 1 percent, though, in the fourth quarter.
The “incremental synergies” discussed Tuesday are in addition to $170 million in cost reductions at Collins Aerospace in 2020, which included 72 layoffs in Cedar Rapids, 36 layoffs in Bellevue and 29 layoffs in Decorah.
Toby O’Brien, Raytheon’s chief financial officer, said the company will reinstate merit-based pay increases and reduce furloughs, though.
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Raytheon leaders project Collins Aerospace’s adjusted sales in 2021 will be down from 2020 by a single-digit percentage. The company anticipates a challenging first quarter and then growth for the rest of the year.
Hayes sees “brighter days ahead” for the commercial aerospace industry, though, as distribution of the coronavirus vaccine continues.
“I’m extremely confident that commercial aerospace will recover,” Hayes said.
“It’s not a question of if. It’s simply a question of when.”
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