Textron, Inc Business Analysis

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NAICS Code: 336411 Aircraft Manufacturing[pic 2]

This U.S. industry comprises establishments primarily engaged in one or more of the following: (1) manufacturing or assembling complete aircraft; (2) developing and making aircraft prototypes; (3) aircraft conversion (i.e., major modifications to systems); and (4) complete aircraft overhaul and rebuilding (i.e., periodic restoration of aircraft to original design specifications).

Textron, Inc[pic 3][pic 4]

Employees        34,000

Annual Payroll        1,335,800,000 Countries Operating In                 25

NYSE        TXT

Founder        Royal Little

Founded        1923

Fortune 500 Listing        228

Revenue        13.8 Billion

"INTEGRITY, TRUST, RESPECT, and PURSUIT OF

EXCELLENCE – these corporate values are the

enduring principles that have guided our actions.” - Scott Donnelley, CEO

How might the upcoming general election affect Textron, Inc.? During this election period, it is important for Textron to organize a task force to be its Public Policy group. Ideally housed in Washington D.C., this team should be dedicated to researching the United States’ and global economy’s current political, economic, legal and regulatory landscape, as well as any potential changes that could be implemented with a new president. This group should be used to understand the environment and its potential impact on Textron’s operations.  Business units should be well-educated on any potential changes that could be enacted and have plans in place to make any operational or financial adjustments as they see fit. Below, some considerations on how the upcoming election might impact the company are outlined.

Tax Plans (with focus on corporate taxation and charitable giving)

Each candidate has a comprehensive tax plan that may change the current corporate tax structure, including closing of any “loopholes.”  This could have an impact on the amount of charitable giving by Textron, taxation of employees, taxation of property, etc. Tax proposals from the current candidates vary, where the Republican side offers more concrete proposals. Donald Trump proposes lowering the top corporate tax rate to 15% while Cruz suggests eliminating

this tax and replacing it with a 16% business transfer tax.  The Democratic candidates are more vocal in the area of International Taxable income. Both Clinton and Sanders seek to discourage corporate inversions and to end deferral of tax on foreign income.  All candidates support taxation of foreign income at various levels. Depending on the level of increased (or decreased) taxation, this would certainly have an effect on Textron’s profits.

Foreign relations (with focus on relations with countries that Textron has a global presence in) Foreign relations have become increasingly important with the increase of terrorism. Textron must ensure that countries in which they operate are safe for their employees, and are compliant with any regional/ global agreements that they may be participating in (i.e.: NAFTA, EU, UN, World Bank, International Monetary Fund, International Labor Organization, etc.) The US economy is affected by international trade. Clinton and Trump both advocate for enforcing trade agreements. They both site that China has benefited from inclusion in the WTO, but does not play by the

rules.  Trump explains how he will declare them a currency manipulator.  This will lead to levying measures against

China’s artificially low priced products. Clinton is in favor of a trade agreement prosecutor (Legitimating tactics.)  This position would help enforce current agreements.  She also would freeze the signing of new agreements until the current ones are enforced.  The candidates both agree on this point of China’s “fair play” in international trade. The country's stance on China’s economy and trade relations will come into play where Textron’s Aviation wing is concerned.  The company has an expanding market in China for business travel by small planes, including the Cessna line.  An area where some candidates differ is the Trans Pacific Partnership (TPP.) Clinton recently stated that she thinks the TPP will do more harm than good. Opponents think she is posturing to win votes, a form of Other-focused impression management, and she will switch positions if she is president (integrity/instrumental values-honesty.)   Trump is opposed to the TPP, as well as Bernie Sanders who uses Clinton’s changing position against her. Textron should set up plans to challenge the regulatory laws in another country in trade tribunals should the TPP take full effect.

Regulatory environment (health and safety regs, banking regs, anti-trust, etc.)

The regulatory environment can have a huge financial and operational impact on Textron. With a new president, the environment could change, especially if the majority political party changes control in Washington. Textron will need to be especially vigilant for any regulations that may change, because violation could mean that large fines are incurred. When considering environmental and business regulations, the Republican Party has traditionally embraced removing regulation which, in theory, would free up opportunities for businesses that would otherwise be closed off. The Democratic Party has a more pragmatic approach that attempts to balance opportunity while still protecting the environment or the public from agencies who may be interested in profits alone. As one of Textron’s focuses is corporate responsibility, they will also have to look at specific proposals to see not only how it will affect their bottom line, but also the environment where this is one of their terminal values.

People/Rights

Some of the candidates have publicly expressed their thoughts on many controversial topics, including gender, race, sexuality, abortion, gun rights, religion and many others.  As one of Textron’s core commitments is to people, it should advocate for a candidate that has a fair approach to these topics, and will create an environment in which businesses can operate in ways that protect the rights of their people. The Republican front-runner, Trump, has had a controversial political campaign so far because some groups have felt marginalized by his comments, in particular women, Hispanics, some people of color and some disabled people. Additionally, Clinton had received some negative reception from different groups of people, as well. If either were to win the presidency, they may have tarnished relationships with these groups.  Textron will have to monitor the political/legal environment to ensure that changes are constitutional and not based upon the opinions of the President.  They will need to monitor sentiment of their employees to ensure that all groups feel they have a voice in the company, even if political figures have made comments against them.