Global Fastener News

Textron Considering Selling Textron Fastening Due to Lackluster Profits

Jason Sandefur

Textron Inc. announced it may sell all or portions of Textron Fastening Systems, citing lackluster returns on its investment. CEO Lewis Campbell said company-wide efforts in recent years to strengthen operations, streamline processes and enhance profits have not produced sufficient results at TFS.
“The additional capital and other resources required to meet our profitability and return goals for fastening systems have led our management team and board of directors to conclude that we should evaluate a range of strategic alternatives that may include a sale of all or a significant portion of the [TFS],” Campbell explained in a brief press release. As a result, Textron will record a pre-tax charge of $300 million to $500 million during the third quarter of 2005.
TFS employs 10,000 people at 40 plants in 17 countries. Fasteners contributed 19% of Textron’s overall revenue of $10.2 billion in 2004. However, while overall Textron profit soared 40% to $365 million in 2004, TFS earnings dipped 20% to $53 million during the year. Results for the first half of 2005 were no better for TFS, with earnings dipping to $5 million compared with a $44 million profit during the first six months of 2004.
TFS has had to lay off about 200 employees at its new 308,000 sq ft fastener facility in Greenville, MS, during 2005. Originally projected to employ as many as 500 people, the Greenville plant currently has about 130 workers manufacturing specialty threaded fasteners and engineered assemblies for the auto industry. The $35 million Greenville factory was built to consolidate much of the company’s fastener production from other U.S. locations, including plants in Rockford, IL. In early 2005 TFS doubled its China production facility to a 115,00 sq ft plant that will employ 226 workers.
Not all of the news has been tough for TFS in 2005. In April the company unveiled its Intevia intelligent fastening system at the Aircraft Interiors Expo 2005 in Hamburg, Germany. Developed through a partnership with Chicago-based TZ Ltd., Intevia fasteners feature embedded microchips controlled by radio frequency signals.
With sales of $1.9 billion, TFS calls itself the company that holds the world together, boasting of supplying fasteners for the Eiffel Tower and the International Space Station. Web: Textron.com �2005 FastenerNews.com