By Ted Mann
United Technologies Corp. will bring back a former longtime
executive to help oversee the company's aviation strategy, as Chief
Executive Greg Hayes reshuffles his top aerospace executives ahead
of a major production ramp up of its new jet engine.
The company said David Hess, former president of its Pratt &
Whitney jet engine business, will take on a new role as senior vice
president for aerospace business development and will report to Mr.
Hayes. Mr. Hayes has warned that it will be a difficult year for
Pratt's earnings as the company ramps up production of its geared
turbofan jet engine.
The move comes as the company is still digesting the abrupt
retirement of former CEO Louis Chenevert late last year, amid board
concerns over his handle on the company's operations. It is the
second major management change this month in the aerospace
division, which has spent billions of dollars building a new jet
engine that is slated to enter into service later this year on
Airbus Group NV's new Airbus 320neo and Bombardier Inc.'s
CSeries.
Last week, United Technologies said Alain Bellemare, who had
overseen both the Pratt and UTC Aerospace Systems businesses, would
leave the company and that his position would be eliminated in
favor of more direct lines of oversight between Mr. Hayes and the
individual business units.
The upheaval under Mr. Hayes comes at a sensitive time for
United Technologies' aviation businesses, which together generated
roughly 44% of the company's $63 billion in sales in 2013. Pratt
says it must double production of the new engine over the next five
years to meet the demand for an order backlog of 6,000 ordered or
optioned engines.
Company executives say that effort will be a drag on earnings
for the next few years, until the bulk of the engines are in
service and beginning to reap profits from service and replacement
parts. The company has forecast Pratt earnings to fall between $25
million to $100 million this year to roughly $2 billion on sales of
$15 billion.
The shake-up also increases the number of executives reporting
directly to the CEO, in keeping with Mr. Hayes' promise to
investors that he would take a hands-on approach as chief executive
much in the same way he did as chief financial officer. After these
management changes, Mr. Hayes has gone from one direct in the
aerospace business report to three.
Mr. Hess, 59, retired early last year as president of its Pratt
jet engine business after 34 years with the company. In his new
role, he will work with Paul Adams, who succeeded him as president
of Pratt, and Dave Gitlin, the new president of the aerospace
business, to strengthen the company's relationships with customers,
the company said in a news release.
After his retirement in 2014, Mr. Hess served on the board of
RTI International Metals, Inc., a supplier of titanium and other
specialty products to the aerospace industry.
Write to Ted Mann at ted.mann@wsj.com
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