ABOUT THIS COMPANY:The right stuff
Rockwell Collins keeps the world in flight -- almost all airlines have at least one plane with some of the firms electronics in it. In addition to a whole catalog of avionics, like cockpit displays and systems for flight control, collision avoidance, navigation and global positioning (aka GPS), RC's products include radios and voice and satellite data systems for use by everyone from soldiers on the ground to executives in the air. Customers include the U.S. Army, Navy and Air Force, the armed forces of counties allied with the U.S. and commercial plane manufacturers such as Boeing, Cessna and Bombardier. Just under 40 percent of the company's revenue in 2006 came from government contracts.
Rockwell Collins was founded as the Collins Radio Company in Iowa in 1933 -- the same year that its radios earned the distinction of providing a communications link between the outside world and Richard Byrd's expedition to the South Pole. The company's products were employed in even more inhospitable domains when the company provided space-to-ground communications for NASA, beginning in 1959 for the Mercury, Gemini, Apollo and Skylab missions. In 1973 (the same year as Skylab), Collins was acquired by Rockwell International, a company with interests in modems, printing presses and military aircraft. The subsidiary benefited from its parent's military and aviation expertise and changed its name to Rockwell Collins, before being spun off in 2001.
Talk to the rock
In 2006, Rockwell Collins took in $3.86 billion, an increase of 12 percent over the year before. Profits increased notably as well, bumping up 20 percent over the year previous to $477 million. During the year, RC made two acquisitions that strengthened its position in the military communications sector. In September, the company bought IP Unwired, a manufacturer of high-speed wireless modems for military applications. A few days later, RC bought Anzus, a company specializing in software for the aforementioned modems.
In 2007, Boeing tapped Rockwell Collins to provide a full suite of electronics for its 747-8 plane, including all the safety, autopilot, maintenance navigation and weather hazard avoidance gizmos. The 747-8 is designed to be quieter and emit fewer greenhouse gasses than its predecessor plane; delivery is expected in 2009. Gulfstream also purchased heads-up displays from RC in 2007, which will appear on its planes beginning in 2009.
Supply and demand
As the economy in China continues to grow, it's no surprise that Rockwell Collins is making moves to expand into that massively populous nations airline market. Boeing analysts estimate that the country will buy about 2,900 planes by 2025. In a good sign of things to come in China for RC, in 2007 it inked a deal with Air China to provide hazard-detection systems for 49 of its planes. These systems provide advance information for pilots who have turbulence, storms and other weather hazards in their flight path.
The rapid increase in demand for planes in Asia is encouraging new entrants in the field. While airplane manufacture is the archetypal example of an industry with high costs of entry, two Chinese companies are making a go of manufacturing their own planes. Both companies (AVIC I Commercial Aircraft and Xian Aircraft) have elected to use Rockwell Collins' Pro Line 21 avionics. The Pro Line 21 system is fully digitized and incorporates GPS, collision avoidance and a heads-up display for takeoff and landing.
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