Textron Inc. is trying to reduce its emphasis on the automotive sector, but the company is not ready to say how it will accomplish that goal.
The Providence, R.I.-based company has hired investment bankers to look into the potential of selling all or part of Textron Automotive Co. Inc. — a nearly $3 billion operation. But it also is looking at building up other business units instead, Chief Executive Officer Lewis Campbell said in an April 19 conference call.
"Our strategic intent is as clear as ever," he said. "We intend to lighten up on automotive. Period."
Campbell refused to provide further information on plans to sell all or part of the division.
"I can't comment on whether we've had any discussions, whether we are having any discussions or whether we will have any discussions," he said. "Every option is still open to us as we speak."
The auto unit has extensive holdings in plastics. Plastics News lists the company as North America's largest injection molder, with more than $1.5 billion in sales, mostly through Textron Automotive's trim division.
Textron Kautex is a leading supplier of blow molded fuel tanks, producing more than 20 percent of the plastic tanks sold worldwide each year. But the unit does not have as great a return on investment as Textron's other holdings, such as Cessna Aircraft and Bell Helicopter.
Textron's aircraft division posted $986 million in sales for the first quarter of 2001, a 3 percent climb from the same period a year earlier, while profit increased 26 percent. Automotive sales, meanwhile, dropped 19 percent to $677 million and profit fell 25 percent.
Other manufacturing units also saw sales drops — 14 percent at Textron Fastening Systems and 7 percent at Industrial Products — but the auto division suffered the biggest fall.
Campbell first raised the specter of selling off parts of Textron Automotive in January, as part of an overall plan to improve shareholder value. During the April 19 conference call, he continued to stress the need to simplify Textron's portfolio of businesses, noting it must "concentrate on businesses in attractive industries in the long term."