Rohr Conference Expected to Draw Many Shareholders
A record number of shareholders are expected for Rohr Inc.’s annual meeting this morning, and it is a good bet that investors aren’t showing up to throw rose petals in the path of Rohr Chairman Robert Goldsmith.
The Chula Vista-based aerospace manufacturer of jet engine components has suffered through a horrendous year. Rohr’s image took a battering last month when it lost a highly publicized wrongful-termination lawsuit brought by two former executives. Then, Rohr showed up on a list of major employers whose pension plans are underfunded.
All this happened against a background of shrinking orders from Rohr’s commercial jetliner manufacturer customers. The highly cyclical aerospace industry has begun a descent into one of its periodic downturns, and the competition for the remaining business is intensifying.
The slide in Rohr’s backlog illustrates how tough times in the aerospace industry have become. As of now, Rohr’s combined firm- and anticipated-backlog stands at $3.9 billion, down from $5.1 billion in 1990. To adjust to the slowdown, Rohr has cut its corporate payroll to about 9,000--about half of whom work in the Chula Vista facility--from the 12,100 payroll peak in July, 1989.
The news has gotten worse in recent weeks. Big customer Boeing announced last month that it was slowing down deliveries of several models of its commercial jets to airlines because passenger traffic is down. Boeing suppliers such as Rohr, which makes parts for the 757 and 767, will feel the pain.
Last month, Rohr disclosed that it will lose a contract to provide jet engine nacelles, or housings, to manufacturer Pratt & Whitney, a contract that now amounts to 15% of Rohr’s total business. Martin Marietta, a relative newcomer in this segment of engine components, took the business away from Rohr.
The company also announced that it had to delay deliveries of components for a new Airbus Industrie commercial jet engine because one of Rohr’s suppliers couldn’t deliver.
John Simon, senior vice president at Seidler Amdec Securities in Los Angeles, said that 1992 is “the last good year for Rohr for some time.”
“All jet manufacturers are going to cut back orders. It is the end of the cycle for them this time around. There are down-cycles in aerospace and this cycle is going to last into the mid- to late-1990s. (Rohr executives) predicted this themselves,” Simon said.
A Rohr spokesman said one reason for the expected high turnout at the annual meeting is that it will be the first opportunity for the public to see Rohr’s new $40-million, 250,000-square-foot research facility. Tours of the structure will be offered after the shareholders meeting.
