A four-week machinists’ strike and resulting slowdown in aircraft-deliveries cost Textron Aviation about $30 million in the third-quarter and prompted parent Textron to trim 2024 financial estimates.
The Wichita-based aircraft manufacturer turned a $128 million profit in the period, down 20% from $160 million in the same period last year, Textron reported on 24 October.
Despite the strike, Textron Aviation’s revenue remained nearly flat year on year at $1.3 billion, thanks partly to higher pricing, the company says.
Workers represented by the International Association of Machinists (IAM) walked off the job on 23 September, starting a strike that would last 28 days. On 20 October, union members ratified a new contract that provides 31% wage increases over the deal’s five-year term.
“In the third quarter of 2024, delayed aircraft deliveries along with unfavourable performance resulting from the IAM strike lowered Textron Aviation’s revenues by about $50 million and segment profit by around $30 million,” Textron chief financial officer Frank Connor says during the company’s third-quarter earnings call.
Textron Aviation delivered 41 Cessna jets in the third quarter – two more than it delivered in the third quarter of 2023. But it handed over only 25 commercial turboprops last quarter, down from 38 in the prior-year period.
“We are starting to ramp and get things back in place… We probably had about 60% of the workforce… back in yesterday,” with the entire workforce expected to be back on the job on Monday, chief executive Scott Donnelly tells investors.
Donnelly says the effects of the strike will linger, negatively affecting the company’s fourth-quarter financial results as it works to ramp production.
The company now expects its aviation business will generate about $5.5 billion in 2024, down from a previous estimate of $6 billion.
In a 25 October report, JP Morgan estimates Textron Aviation will deliver 161 Cessna jets this year, seven fewer than it delivered in 2023.
Donnelly says that by the start of 2025 Textron Aviation’s operation will be “stable” and “running at normal productivity and a smooth rate”.
But Textron Aviation must still overcome supply chain troubles. Donnelly says part shortages have improved but remain “problematic”, resulted in “a lot of out-of-station work and just significant inefficiencies in the factory”.
