Triumph Group, a Pennsylvania-based aerospace and defense supplier with operations in Wichita, said Tuesday it is restructuring its business, consolidating from six to four business units.
The four business units will be integrated systems, aerospace structures, precision components and product support. The consolidation also will mean new leaders for the units, all of whom will be promoted to the title of executive vice president. The move is leading to the departure of one executive, Norman Jordan, former president of Triumph Aerostructures-Vought Aircraft Division, who will leave the company April 30.
“We are operating with a sense of urgency and remain focused on improving the company’s performance and delivering predictable profitability,” said Triumph Group CEO Dan Crowley in a news release.
The restructuring comes about four months after Crowley was hired as Triumph’s new chief executive. He succeeded Richard C. Ill, Triumph’s founder and former CEO, who came out of retirement in April 2015 to briefly reprise his chief executive duties.
It’s not clear what Tuesday’s action will mean for Triumph’s operations, which comprise 47 facilities in the U.S., Mexico, Europe and Asia. Triumph entered Wichita in 2006 through the acquisition of Excel Manufacturing, which operates as Triumph Structures-Wichita at 3258 S. Hoover. A Triumph Group spokeswoman didn’t immediately know the company’s total employment in Wichita.
The company also has an accessory services facility in Wellington that employs 110 people.
The Triumph spokeswoman said in a voice mail that the restructuring is an “initial step in Triumph’s transformation” and the company will be “carefully evaluating each of our businesses and how they fit into the overall portfolio.”
Peter Arment, a financial analyst for Sterne Agee CRT, wrote in a note to investors Tuesday morning that Triumph’s shrinking core business and weak free cash flow has hurt the company’s outlook over the past two years. The consolidation, he wrote, presents “many challenges.”
“The goal of the new structure is to reduce the number of operating companies, locations and redundant costs,” Arment wrote. “It’s unclear how many of the company’s 47 highly specialized facilities can be consolidated, especially given how diverse the components are from a manufacturing standpoint.
“We continue to see the TGI transformation taking a long time, with FY17 set-up as another transition year.”
RBC Capital Markets analyst Robert Stallard sees the consolidation plan as a good first step.
“We view this as a positive move by the new CEO, as he gets his arms around the issues at Triumph, and appoints a team that should be better equipped to deal with and fix the problems,” Stallard wrote in a Tuesday morning investor note. “We imagine that these initial moves will be well received by investors, and we await further plans from Dan Crowley.”