UTC Cuts 11,600 Jobs Worldwide

By Graham Warwick

United Technologies (UTC) will cut 11,600 jobs worldwide, and incur an additional $600 million in restructuring costs, but the impact on its aerospace businesses Pratt & Whitney, Hamilton Sundstrand and Sikorsky has yet to be announced.

“This is a global action affecting all business units worldwide to some extent, but to varying degrees depending on market conditions. The exact number of jobs affected at individual business units has not yet been determined,” says a UTC spokesman.

The job cuts will result primarily from overhead and non-production reductions throughout UTC. But the company warns “additional hourly work force reductions may occur during 2009 based on market-driven production volume changes.”

UTC has reduced its revenue guidance for 2009 to $55 billion from the $57 billion forecast as recently as December. This is down from $58.7 billion in 2008, when Pratt & Whitney accounted for 22% of revenues, Hamilton Sundstrand 11% and Sikorsky 9%.

Addressing the JPMorgan Aviation & Transportation Conference yesterday in New York, UTC President and CEO Louis Chenevert said the continued deterioration of the commercial aerospace market has changed several key assumptions.

Enginemaker Pratt & Whitney’s commercial spares revenues, which were forecast in December to be down slightly, are now expected to experience a double-digit decline in 2009. Similarly, Hamilton Sundstrand’s commercial aftermarket revenues, previously expected to show low single-digit growth, are now forecast to be flat.

Engine shipments at Pratt & Whitney Canada, which were forecast to increase by 20% this year, are now expected to be flat.

Photo: Pratt & Whitney