Textron to Sell Fastening Systems Unit

Jason Sandefur

Textron Inc. has put Textron Fastening Systems up for sale, CEO Lewis Campbell announced.
“After examining a range of strategic options for our Fastening Systems business and based on initial interest from a number of potential buyers, we’re confident that our plan to sell the entire unit in one transaction will realize maximum value, and that we will be able to execute the plan in a timely fashion,” Campbell stated. “This represents another major step in executing our portfolio strategy and will significantly improve our return on invested capital while positioning Textron for more profitable growth in the future.”
Campbell said Textron has begun an “active marketing process” for its fastener operations. TFS will be treated as a discontinued operation beginning in the fourth quarter. Textron will take after-tax charges of about $55 million related to the move.
The news follows a September announcement that Textron was pursuing a “range of strategic alternatives” for TFS, which accounted for 19% of Textron revenue in 2004. A declining U.S. automotive sector has cut deeply into TFS’ profitability, forcing the closure of its new $35 million fastener plant in Greenville, MS, just two years after the site opened with high hopes. The 308,000 sq ft facility, which manufactured specialty threaded fasteners and engineered assemblies for the auto industry, was built to consolidate much of the company’s fastener production from other U.S. locations, including plants in Rockford, IL. TFS tried unsuccessfully to sell the plant before announcing the closure.
Since September, TFS has sold two facilities to Tinnerman Palnut Engineered Products Inc. TFS is also negotiating with India-based Sundram Fasteners to sell its subsidiary viz. Peiner Umformtechnik GmbH, Peine, Germany (Peiner). Peiner employs 300 workers and manufactures fasteners for the automobile, industrial and construction industries.
Plans to sell TFS will not affect those transactions.
“Our Greenville facility closure and possible sale of Peiner go forward, since they are on separate paths from today’s development,” TFS communications director Tim Weir told FastenerNews.com.
TFS revenue during the first nine months of 2005 grew 3.7% to $1.5 billion, but the unit recorded a $6 million loss, excluding other charges, compared with a $45 million profit during the first nine months of 2004.
In early 2005 TFS doubled its China production facility to a 115,00 sq ft plant that will employ 226 workers. Web: textronfasteningsystems.com �2005 FastenerNews.com