Oct. 27—Collins Aerospace, Cedar Rapids's largest employer, saw a 94 percent drop in adjusted operating profit in the third quarter this year compared to the same time period in 2019.
That decline comes as parent aerospace and defense company Raytheon Technologies continues to seek to "significantly reduce structural costs" during the coronavirus pandemic.
Collins Aerospace's adjusted sales were down 34 percent in the quarter that ended Sept. 30. Adjusted defense-industry sales were up 4 percent, but that was not enough to negate the lack of commercial sales, Raytheon Technologies officials said Tuesday morning in its quarterly earnings call with investors.
For the full first nine months of 2020, Collins Aerospace's adjusted operating profit was down 64 percent.
There was some potential good news, however, for the Corridor.
Some circuit card production will move from Massachusetts to Coralville as part of Boston-area-based Raytheon Technologies's pivot from high-cost to low-cost manufacturing sites, Raytheon Technologies CEO Greg Hayes said.
"This allows us to better meet our customer commitments at a lower cost and balances demand between our facilities," Hayes said.
A Collins Aerospace spokeswoman did not immediately comment on whether that would mean new Collins Aerospace jobs in Coralville or more work for the existing workforce there.
Neil Mitchell, Raytheon Technologies corporate vice president, said Collins Aerospace's sales decreases are "driven primarily by the adverse impact of COVID-19 on the industry."
The pandemic has especially dampened commercial aftermarket sales, which were down 52 percent, as airlines do "everything they can from a cash-conservation standpoint," Hayes said.
"That means even cannibalizing aircraft to keep other aircraft flying," Hayes said.
The drop in commercial aerospace business has led to a reduction of about 15,000 Raytheon Technologies positions and 4,000 contractors, along with temporary furloughs, a hiring freeze and merit deferrals.
Raytheon Technologies has almost 200,000 employees, according to its website.
Those job cuts include about 20 percent of Collins Aerospace and Pratt and Whitney's commercial aerospace head count, Hayes said.
Those job eliminations were "tough but necessary cost reductions," Hayes said during the call.
Hayes said about half the commercial aerospace jobs that were eliminated "will eventually come back as (passenger) volume comes back."
Looking forward, Hayes envisions a gradual return to air travel and consequently a gradual climb in sales.
But even after air travel returns to pre-pandemic levels, he anticipates it taking another six to nine months for aftermarket sales — the "bellwether" of a full recovery — to catch up.
"This is not a one-quarter, two-quarter problem," Hayes said. "It's going to be here for a while."
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