Astronics Cutting Workforce, Tapping Financing In Wake Of COVID-19
Astronics, the already embattled provider of aircraft seat technology and other interior products, is “adjusting its workforce” to align with a dropoff in demand due to the novel coronavirus and sudden economic slowdown.
The company said March 31 the personnel changes and other moves should help it save $55-60 million in the second quarter. “These actions will be difficult for our company and our employees, but they are necessary in the face of the COVID-19 threat,” Astronics chairman and CEO Peter Gundermann said.
Gundermann did not detail the workforce reductions, which are the latest steps the upstate New York company is taking as it wrestles with Boeing 737 MAX-related slowdowns and other issues in addition to the coronavirus crisis.
Earlier actions included restructuring the company’s systems certification and antenna businesses, launching Avenir for the “very, very important person” inflight entertainment/connectivity market, and suspending the company’s share buyback program and acquisition activity.
Despite shutdowns around the world designed to stem the COVID-19 pandemic, Astronics said the majority of its operations remain functional. The exception is its Test Systems engineering center in India, which is closed by government mandate. Four other centers closed for deep cleaning but have reopened.
Meanwhile, Astronics said it is renegotiating a loan agreement with its agent bank because of COVID-19’s effect on the aerospace industry. The company drew down $150 million from its existing credit line to boost cash on hand, which was almost $32 million at the end of 2019. On the spending side, capital expenditure has been cut to $10 million this year from at least $22 million eyed before, while hiring has been frozen.
“Collectively, these are significant steps that position the company as well as possible for the immediate future, realizing that the future is not clear,” Gundermann said in an announcement. “We will continue to monitor the situation closely and make necessary course corrections as appropriate.”