Textron Aviation Plant Comeback After Strike and Strong Growth at Textron Systems

Textron Aviation faces the challenge of restarting after a production halt due to a strike, according to Scott Donnelly, the company's Chairman and CEO. Approximately 60% of the workforce has already returned, impacting a revenue drop of $0.5 billion. The main task is to accelerate production and improve efficiency as the workforce gradually returns. CFO Frank Connor also pointed to an additional setback of $200 million in free cash flow, which goes beyond the loss-induced revenue shortfalls. The slow ramp-up and production impacts lead to inventory that is planned for sale in 2025. Maintaining a healthy supply chain is a key focus. The demand situation at Textron Aviation remains positive, with over $1 billion in orders in the third quarter alone, as Donnelly emphasizes. The demand is driven by new models and innovations like Autoland, while the market environment remains favorable. Textron Systems is on the verge of a strong growth phase, particularly through the FTUAS and the Robotic Combat Vehicle programs. Despite challenges, like the Machado issue, the division is meeting the original revenue and margin targets. The aftermath of the pandemic continues to pose challenges for productivity, especially due to supplier part shortages and workforce turnover. A new collective bargaining agreement is expected to provide stability and make Textron a more attractive employer, ultimately enhancing productivity.