With Pelton out, Textron boss running Cessna

 - June 1, 2011, 5:15 AM

Following what was described on May 2 as the retirement of 52-year-old Cessna chairman, president and CEO Jack Pelton, Textron chairman and CEO Scott Donnelly headed to Wichita to take charge of day-to-day operations at the 84-year-old aircraft manufacturer. At press time, Textron had not named a permanent replacement to take the helm at Cessna.

Pelton had spent 11 years at Cessna, eight of them in the left seat. A Textron spokesman told AIN shortly after the announcement that the decision for Pelton to retire was a mutual one between Pelton and Donnelly, but many observers were not easily convinced by the official line.

Cessna has suffered mightily from a recession that has been cruelest on the builders of aircraft that fall short of the large-cabin segment, which has stayed relatively healthy. The priciest examples of corporate and personal flying machinery have remained within the grasp of the wealthiest companies and individuals despite the carnage in lower economic strata. Cessna’s shot at that big league (the Citation Columbus, announced in 2008) became an early victim of the recession when it was shelved in 2009.

Couple those factors with what analysts have labeled as inadequate investment in fundamentally new aircraft to revitalize a product line that is based on two decades-old Citation fuselage cross-sections, the rise of Brazil’s Embraer and its clean-sheet series of well received business jets, and the recession has served to reveal the vulnerabilities of a company that tweaked and sold airplanes like hot cakes in more prosperous times.

 In a letter to employees, Pelton said: “We’ve been through the best and the worst times together, from unprecedented growth and record-breaking financial performance to one of the most difficult cycles our industry has seen.” He said he leaves confident that “Cessna will emerge in the coming cycle stronger than ever.”

A management shakeup on April 29 that saw the departures of v-p of marketing Tom Aniello and director of technical marketing Jeff Sites had sparked speculation about more change at the top, particularly in view of Cessna’s recently announced first-quarter financial performance.

 It was on April 20 at a first-quarter teleconference that Donnelly pronounced “our underlying performance at Cessna was disappointing.” Cessna’s first-quarter revenues of $556 million were up by $123 million from the same period a year ago, but the division still managed to sustain a larger operating loss–$38 million versus $24 million last year. From $16 billion in 2008, Cessna’s order backlog had shrunk to $2.6 billion and its $29 million loss in 2010 was the poorest performance by any Textron company.

Pelton joined Cessna (by way of McDonnell Douglas and Fairchild Dornier) in November 2000 as senior v-p of product engineering; he was named president and CEO in 2003 and chairman in 2005. “Under Jack’s leadership, Cessna achieved many significant program and product milestones,” said Donnelly. The Textron spokesman told AIN that “the conversation between Scott and Jack had been going on for some [unspecified] time, and the challenges Cessna has faced in recent years are not the cause of the retirement.” In response to speculation that Bell Helicopter president and CEO John Garrison will be named chairman of an aviation division containing both Bell and Cessna, the Textron spokesman replied, “A search for the new CEO of Cessna is under way, as announced on May 2, and it would be premature to speculate about any candidates who may be considered.”

Despite the controversial revelation early in his tenure at Cessna that his degrees in aeronautical engineering came from a “diploma mill” in Wyoming, Pelton established himself not only as an energetic and effective leader of the best-known name in GA airplane manufacturing but also as a strong batsman for general aviation as a whole. Under his watch, Cessna certified the Citation Mustang VLJ; introduced the SkyCatcher LSA (after Pelton chose to have it made in China); bought Columbia Aircraft; and launched the aforementioned Citation Columbus but was later tasked with implementing Textron’s directive to shelve the large-cabin business jet. Pelton was also the sole GA representative on Transportation Secretary Ray LaHood’s Future of Aviation advisory committee.