What's your prediction as it relates to the possiblity of Esterline Technologies Layoffs 2020? Any news or rumors?
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Well, they just let go another 20 people yesterday 2-13-20 at Korry Electronics. Per the numbers so far, they're on track towards that 15% headcount reduction plan involving 5% reductions to keep things under 50 at a time. I had written 8 months ago in fact, that there would be a possibility that this was going to occur - not in one big block involving 100 people but rather, incrementally, in small blocks of 20-30 people at a time until they've achieved the headcount reduction set forth by Transdigm Management.
This is not a good sign for Korry Electronics but, could also easily be misread. Per the quarterly earnings reports and disclosure notices of divestitures - Transdigm has already begun the sell off of certain divisions associated with Esterline Technologies.
TDG netted 1.1 billion dollars in return off the 4B spent on purchasing ESL as planned before inking the deal. They had the sale of EIT and Souria and Sunbank all planned as a means to immediately recover 1B dollars per loan agreement and business plan presented to lenders who lent TDG money to acquire Esterline.
What we don't know (only because TDG failed to disclose it as planned) is the future going forward. What they announced they were going to disclose was allocation of capital and to where they planned on putting forth investment and to where cuts and divestiture was to be had.
Since TDG started the evaluation of ESL product lines and business units in September, we won't know how those valuations will look like until the end of the assessment and measurement period which lasts an entire year. TDG won't know either how that will end up but, it will have an impact on what they will do going forward.
They announced on their Q4 report and annual report that they've taken on substantial risk with the purchase of ESL. They also stated it's more complex to integrate ESL into their existing portfolio than other companies it has acquired in the past.
The amount of debt incurred as skyrocketed and, that indebtedness is at risk for, if it exceeds a certain threshold, TDG will be forced to sell assets and hold off and delay capital expenses due to high risk associated with this particular purchase.
As a backup plan, TDG had initiated and kicked-off a five-year-plan to which, if ESL turns out to be an under-performer, they'll flip the entire thing, Lock-Stock & Barrel and still make profit thus, it's a Win-Win situation for TDG no matter what. They'll simply flip the whole entire hot mess 100% and walk away with a good return on investment per their initial report out from last year on this venture.