The Big Picture From Farnborough

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As a top-tier supplier to Boeing, Airbus, defense contractors and business jet manufacturers, Rockwell Collins has a stake in many parts of the aerospace and defense industry. Kelly Ortberg, who became CEO of the Iowa-based company last July, sat down with Aviation Week at Farnborough for a wide-ranging discussion. Among the topics discussed:

Worries Of An Aircraft Order Bubble.  “That concern seems to be really prevalent in the investment community, but not in the supplier community,” says Ortberg. He notes that Airbus and Boeing made it through the worst economic downturn since the Great Depression largely unscathed, thanks to overbooking of orders that offset cancellations. “There’s a lot of buffer. They could reschedule 20% of these backlogs” and it still would not affect production rates.

The F-35’s No-Show At Farnborough.  Rockwell Collins manufactures the F-35 Lightning II's Helmet Mounted Display System, so Ortberg obviously was disappointed when an engine fire kept the Lockheed Martin fighter jet from coming to Farnborough for a flight demonstration. But he remains confident the program will get back on track. “This issue is just a bump in the road.”

The CSeries' No-Show At Farnborough. The new Bombardier passenger jet, which is equipped with Rockwell Collins’ Pro Line Fusion avionics, had its air show debut scuttled when a May 29 engine failure forced its grounding. But Ortberg thinks that is also a temporary problem. “New airplanes aren’t for the faint of heart. That’s why we do flight test programs.  I believe the airplane, when it meets its efficiency targets, will find its niche in the marketplace.”

Business Jet Market Outlook. “We have not called for a rapid recovery, particularly at the low end. We think it’s going to recover fairly slowly, and where it’s going to recover will be driven by new models, as opposed to a major lift in production rates of existing models.”

Prospects for a Supersonic Business Jet. “I think that would be a niche application.  I’m not sure I see that value.”

The Debate Over Whether To Kill the U.S. Ex-Im Bank.  “It would hurt the entire supply chain, because it would limit the number of aircraft that can be financed in certain regions.”

The Keys To a Happy Workforce. “Attrition was a concern about two years ago, but I’m not so worried right now. Retention of our workforce is really good. Keeping them engaged in that first five years it what it’s all about.”

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