After all that Beechcraft has been through, and Wichita along with it, Textron’s purchase of the general aviation employer is outstanding news.
The $1.4 billion deal gives Beechcraft some welcome stability. And Rhode Island-based Textron is a known quantity for Wichita and aviation manufacturing – a considerable relief after all the uncertainties surrounding Beechcraft’s debt and bankruptcy, an unsettling attempted purchase by a Chinese company, and the rumored interest of Brazil’s Embraer and India’s Mahindra and Mahindra.
The acquisition is expected to close in the first half of 2014, pending regulatory approval. Many questions remain, including whether Beechcraft and Textron-owned Cessna Aircraft will operate separately, where Textron might seek cost savings, and how local employment levels, production sites and products might be affected. Beechcraft has 3,500 employees in Wichita.
But the purchase will make history by putting the proud companies that Clyde Cessna and Walter Beech founded under the same corporate roof at Textron. That will reunite the famous aviation names for the first time since the pioneering planebuilders and Lloyd Stearman formed Travel Air in the mid-1920s.
It may take both the aviation world and the Air Capital of the World some time to start thinking of Cessna and Beech in tandem rather than as distinct players, and to get used to seeing the Textron name tied to Beechcraft’s King Air, Baron and Bonanza lines as well as to Cessna’s Citation business jets and Caravan turboprops and to Bell helicopters.
The talk so far raises hopes that Textron will value and maintain the Beech name and Beechcraft brand, and that the partnership will strengthen both Cessna and Beechcraft in the midst of the slow-motion rebound for aviation manufacturing and sales. Early returns from Wall Street were encouraging last week.
It’s easy to see what Textron and its capital can do for Beechcraft. But the conglomerate stands to benefit as well.
“The transaction will open many opportunities for Textron, particularly from the 35,000 customer relationships it will gain with the acquisition,” analyst Stephen Levenson told BloombergBusinessweek. “King Air and service are the real jewels.”
And Beechcraft’s military work, which is focused on the AT-6 trainer, “appears to fit with Textron’s effort to provide more affordable defense products,” as the Wall Street Journal put it.
That includes the Scorpion, the multi-mission tactical military jet that was secretly developed and built in a Cessna facility in Wichita in a Textron partnership with AirLand Enterprises – and that Wichita would very much like to produce when the time comes.
The Textron purchase further extends the period of major transition for aviation in Wichita, including the 2002 arrival of the Airbus engineering facility, the 2005 creation of Spirit AeroSystems and the 2014 scheduled departure of Boeing. But for Beechcraft, Cessna and Wichita, this big change promises to lead to big opportunities as well.
For the editorial board, Rhonda Holman