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United Technologies Corporation Message Board

  • airbornetrppervet airbornetrppervet Jan 27, 2014 12:15 PM Flag

    Sikorsky Spinoff

    The following is a article from Seeking Alpha. My opinion- This makes allot of sense considering all the perceived turmoil that Sikorsky is going through - the Canadian fiasco, the coinual layoffs to try to make the plan and the (again my opinion) incompetent management team. UTC needs to unload Sikorsky and they need to sell it to a strong helicopter manufacturer to straighten out the mess that management has created.

    "A spinoff of the helicopter maker looks to be the most likely option, reports DefenseNews, but an outright sale or a strategic merger are also being looked at. Unclear is how long a spinoff might take or who a buyer might be in a sale.
    The company declined to comment, but former Pentagon manufacturing and industrial policy chief Brett Lambert says current market conditions make the timing ripe, and expects more M&A and spinoff activity in the next 12 months than has been seen in the last 36.
    UTX +2.4%"

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    • I'm confused, Airborne. Isn't SIK supposed to be one of the crown jewels in the UTC portfolio? Is this a short term (ok, maybe even five years or so) workout or do you see SIK as a permanent millstone around UTX's neck? Each major component of the portfolio has had a turn as the dog, it seems; while there is lots of movement around the fringes, buying and selling bits & pieces, the jewels remain firmly in place while they are improved. Tell me more.

      • 1 Reply to ctb11365
      • ctb - At one time, Sik was a moneymaker and added much prestige to UTC because it was the only helicopter, and still is, to fly the President of the US. But, even thought the Brits and Italians won it and then failed, keep it in mind that Sik failed. That was not good. Usually the incumbent has the advantage. For the past decade or so, it has come upon harder times. It is not adding to the bottom line as it did in the past. Look at the Canadian Program. Now, the defense budgets are getting pared back. They are attempting to make the plan by continuing to lay off the workers. The military spares business will be scaled back. It will be some tough times. There are allot of news sources coming out with articles about Sik being considered for spinoff. I think the only reason it may not be sold is if UTC does NOT get its price. I believe they are testing the waters. If you ever get a chance, read the book : "The Innovator's Dilemma, Why Great Companies Fail". It is an outstanding read. It should be mandatory for all management. I was there and was laid off. I spoke to a friend that just left there in the most recent layoff and according to him, people are in a survival mode and are pointing fingers at others to try to save their jobs. Chenervet is not, what I would consider a very tolerant person when it comes to underperformance by one of his divisions. I think he is looking hard to dump them.

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