Cessna's Russ Meyer's at the Controls As Textron Streamlines Av Businesses

There's no Cessna tiltrotor in the cards as yet, but Textron Corp has put longtime Cessna Aircraft chief Russ Meyer in charge of the parent's new aircraft sector, which besides Cessna includes Bell Helicopter, Cessna and the Lycoming engine business.

Bell and Cessna account for about a third of Textron revenues, which totaled $12.3 billion in 2001.

Terry Stinson was replaced as Bell CEO by chairman John Murphey (who now holds both Bell titles) as part of a post-September 11 initiative.
Not publicized is a Textron drive to pull its aviation activities closer together as it generally streamlines. The corporation has spun off operations including a performance materials unit in Massachusetts, the David Brown gear tools business in Britain, and its majority stake in a Michigan automotive wire processing venture called Grand Blanc.

The company wants to put executives with operations experience closer to Textron CEO Lewis Campbell, especially after COO John Janitz left the company in September. Campbell has also assumed the title of Textron president.

"The idea was to give our CEO a better line of sight into the businesses from an operational standpoint," a spokeswoman explains. In addition to Meyer's appointment as aircraft sector president, the Textron industrial sector got a new operations czar in the person of Sam Licavoli. Textron's three new sectors (the third is finance) replace four old segments (aircraft, automotive, fasteners and industrial products, with industrial products having included Lycoming).

"We are confident that we are creating a more resilient business model with a significantly improved cost structure that will provide accelerated earnings growth," CEO Campbell said.

Meyer formally relinquished the Cessna chairmanship he held since 1975 to take the Textron aircraft sector presidency last month. He'd given up the Cessna CEO job two years ago; Meyer's successor there, Gary Hay, is now chairman and CEO of the profitable fixed-wing aircraft unit.

As part of what parent Textron calls its "enterprise excellence" corporate efficiency drive, the 51,000-employee company has established an across-the-corporation team to improve purchasing and reduce duplication of effort. "We had 300 different steel suppliers," a spokeswoman says by way of example. Another example is tires, which Textron buys for products ranging from Cessna business jets to E-Z-Go golf cars.

There is no plan to merge the Bell and Cessna units, the spokeswoman insists, terming the sector-for-segment change "an internal organization move." But part of Meyer's mission is to identify and take advantage of synergies between the two aircraft manufacturers. Cessna has been far more of a moneymaker for the parent, cashing in on the business jet boom while Bell has been buffeted by competitors and unanticipated engineering and even political challenges related to the V-22 Osprey military tiltrotor.

Meyer retains his offices in Wichita, although he's now dividing his time between Cessna in Kansas, Bell in Fort Worth, and Textron's Providence, Rhode Island headquarters.

Bell Helicopter's revenues rose by $5 million in 2001, primarily due to increased business from UH-1 upgrade contracts and other U.S. government sales. But the trouble-plagued V-22 program hurt the Bell bottom line, and while commercial parts sales were strong, new helicopter sales were down. The net result? "Bell's profit decreased significantly," Textron says.

Cessna's 2001 revenues increased $135 million behind strong sales of Citation business jets and increased spare parts and service sales, "partially offset by lower sales of single-engine piston aircraft." Net? "Profit increased significantly."

By Rich Piellisch