CEDAR RAPIDS — The deal was more than a year in the making. But when the sale of Rockwell Collins, Cedar Rapids’ largest employer, to multinational United Technologies Inc. finally came to pass, it still offered a few surprises.
The $23 billion acquisition, with $7 billion assumption in debt — the biggest such deal in the aerospace industry — was announced late Nov. 26, clinching the agreement that joined avionics giant Rockwell with Charlotte, N.C.-based UTC Aerospace Systems to form Collins Aerospace Systems.
With some 70,000 employees worldwide, Rockwell counted about 8,000 workers in Cedar Rapids and about 1,350 in Coralville, Decorah, Bellevue and Manchester.
Kelly Ortberg, Rockwell’s chief executive officer and president, became chief executive of the new company. Dave Gitlin, UTC Aerospace’s president, was named its president.
While Collins Aerospace executive leadership will be based in Palm Beach County in Florida, avionics and missions systems work remain headquartered in Cedar Rapids. Its two units now are headed by Iowa executives — Kent Statler for avionics and Phil Jasper for mission systems.
As far back as December 2016, Rockwell was being pressured by a New York investment fund to consider selling itself, among other options, Bloomberg News reported at the time.
But actual talks between Rockwell and UTC began in earnest the following May, according to UTC Chief Executive Officer and Chairman Greg Hayes, and the acquisition initially was expected to close in the third quarter of 2018.
ARTICLE CONTINUES BELOW ADVERTISEMENT
But various hurdles came first, including obtaining approval from the U.S. Department of Justice, the European Union, airplane maker Boeing and the Chinese government — the final OK coming Nov. 23, three days before the deal officially was announced.
Somewhat of a surprise came with that Nov. 26 announcement when UTC also said it planned to break itself into three companies, spinning off Otis Elevator and refrigeration provider Carrier. Collins Aerospace and aircraft engine manufacturer Pratt and Whitney would stay with UTC.
The move follows a current trend among major industrial companies — DowDuPont, General Electric, Honeywell International — to split off units and create additional value by focusing on core functions.
From the start, officials had stated the merging of Rockwell and UTC Aerospace Systems shouldn’t bring about large employee layoffs, but some executive-level staff could be affected. Two weeks after the deal was announced, voluntary severance packages were offered to some Collins Aerospace employees, effective until Feb. 1.
“Collins Aerospace remains committed to Iowa employees and helping the areas in which they live and work continue to thrive,” Collins Aerospace spokeswoman Pam Tvrdy-Cleary wrote in an email to The Gazette.
A specific number of employees the company hoped would accept buyouts wasn’t set, Tvrdy-Cleary said.
l Comments: (319) 398-5873; email@example.com