Does anyone think the whole idea of getting the backlog down is for the new buyer of Aero?
6 replies (most recent on top)
No, they need to get parts out the door so they can get revenue and cash (screw the margin). Orders out means less backlog. MM's getting the sh– kicked out of him for revenue and cash. Ah the good ole days, when we had $100 million in backlog...
Plunge is a matter of when, not if.
Now is actually the best time to sell stocks when it is high... before the plunge
Basic business. No chance they find a buyer with stock price in the stratosphere. Maybe next year when the disaster that is commercial aero suddenly appears in Minneapolis as the new government gets around to shutting down the rush of big defense purchases the last administration just made. Demand drops off a cliff next year and layoffs will resume by q3. That is when sales look more attractive.
Aero slaves can only hope it will be sold... Maybe Walmart is interested in diversification?
More likely working capital.
Honeywell, doesn't make enough engines to get preference with suppliers. If they can get a supplier to even sell to them, Honeywell needs to buy in bulk 1-3 years worth of materials or parts. This means the cash (working capital) is stuck in limbo.
The related metric is days of supply. Or how long does a product sit on a shelf. Honeywell has laid off thousands because of this metric while never addressing the real issue. To fix this either Honeywell has to buy back all the suppliers it shed off in previous sales (aka vertically integrate), or sell aero to a big manufacturing company that has a good supply network.