Beechcraft and Cessna will be combined into a single division led by Scott Ernest after Textron has completed the $1.4 billion acquisition of the company founded by Walter and Olive Ann Beech in 1929.
The newly-created Textron Aviation segment will exclude Bell Helicopter, but bring together Cessna and Beechcraft with combined revenues of $4.6 billion in 2013, according to Textron.
Beech 2000A Starship 1
“Uniting these brands creates a robust industry competitor, operating as one team with a common goal to serve customers everywhere our aircraft.” The acquisition combines two of the founding companies of the Wichita, Kansas, aviation manufacturing cluster, as well as the heritage of the formerly British Hawker brand.
But it comes only after years of financial and organizational turmoil at Beechcraft, which has had four owners within the last eight years. In 2006, a Goldman Sachs and Onex investment group acquired then-named Raytheon Aircraft, which was rebranded as Hawker Beechcraft. The company filed for bankruptcy in 2012, flirted with a Chinese take-over, then finally re-emerged as Beechcraft in February 2013 owned by a group of private investors.
Beechcraft used the period of the bankruptcy to dramatically restructure the business, shedding the Hawker business jet production lines and refocusing on Beech turboprops and piston-driven aircraft and modification and upgrade work.
The strategic change also coincided with an internal modernisation of supply chain, inventory control and assembly processes and technology. Last October, Beechcraft released new metrics showing that production of King Air turboprops had become more efficient, with dramatically fewer quality issues travelling to the completions team.
This smaller and more focused unit will now be combined with Cessna’s light and medium-sized line of Citation-branded business jets, ranging from the Mustang to the CJ4 to the new Latitude and improved X.
“We expect the integration of Beechcraft and Cessna to be a seamless process that continues putting our customers first,” Ernest says. But the newly-combined company faces continued uncertainty about market demand at the lower end of the private jet market.
Cessna’s business jet sales have declined for five straight years, although there is hope that the recent certification of the M2 and the New Sovereign could spur more demand this year. Textron described the new segment’s combined portfolio as “complimentary” and so far has not suggested there will be any further programme cancellations. via fglobal