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2014 Annual Report

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Company History

Founding as a Textile Company

Textron started as a small textile company in 1923, when 27-year-old Royal Little founded the Special Yarns Corporation in Boston, Massachusetts. Revenues that first year were just $75,000. Today that company has grown into a highly successful multi-industry enterprise recognized for our network of powerful brands, world-class processes and talented people.

Vertical Integration

Early Textron Brochure

Textiles boomed during World War II, ushering in a period of growth and activity for the company, which was now doing business as Atlantic Rayon Corporation. A major line of business during the war was parachutes. In 1943, with World War II government contracts dwindling, Little faced the challenge of declining revenue and underutilized production capacity. He developed a vertically integrated company that controlled every operational aspect from raw goods processing to distribution. He moved quickly from producing parachutes to making lingerie, blouses, bed linens and other consumer goods.

This new operation needed a brand name. Atlantic Rayon's advertising agency suggested "Señorita Creations," but it was rejected in favor of Textron. The "Tex" was derived from textiles and the "tron" came from synthetics such as "Lustron. " The theme of the advertising reflected Little's vision: "From yarn to you, it's Textron all the way."

Marking a major milestone for the company, Textron was listed on the New York Stock Exchange on December 22, 1947. By 1949, Textron's sales had reached $67.8 million.

Birth of a Conglomerate

Men sawing wood

In 1952, facing yet another decline in the demand for textiles, Little approached the Textron Board of Directors for approval to diversify by acquiring businesses in unrelated industries. He planned to maintain textile operations as an earnings base while acquiring non-textile businesses.

In 1953, Textron purchased its first non-textile business, Burkart Manufacturing Co. of St. Louis, Missouri. This company supplied cushioning materials to the automotive market.

Little's success building a diversified company prompted other businesses to follow his model. Textron avoided many of the costly mistakes of other conglomerates by entering new lines of business with small, incremental investments, where other conglomerates tended to make massive, headline-grabbing acquisitions when they moved into new industries.

The pace of acquisitions was great and among the more important businesses added in the early 1950's were Homelite, which was retained until 1994; Camcar, which was retained until 2006; and CWC, which remains part of Textron today.

Closing the Fifties on a Strong Footing


1958 was a milestone for Textron. It was the first time diversification was tested in a recession. While sales declined four percent, earnings rose 24 percent.

In 1960, Textron purchased Bell Aerospace - which included Bell Helicopter - to balance Textron's earnings base by increasing its government business. At the same time, Little added another company, which, like Bell, remains a part of Textron: golf car manufacturer E-Z-GO.

Royal Little Retires

Textron's founder, Royal Little, retired as chairman at the end of 1960. Sales had grown to $383 million. Little's successor, banker Rupert Thompson, led Textron into the new decade alongside company President G. William Miller. In 1963, Textron sold its last textile operation.

Royal Little

Consumer product businesses defined Textron in the sixties and seventies. Notable acquisitions during this period included Speidel, maker of watchbands; Sheaffer Pen; staple and nail gun maker Bostich; and Rhode Island silver company Gorham. Throughout this period, Textron was recognized as the pioneer of the conglomerate and one of the most highly diversified corporations in the U.S. In 1967, the Wall Street Journal called Textron "the conglomerate king." During this time, Textron common stock also split twice: once in January of 1966 and again in September of 1967.

William Miller succeeded Thompson as chief executive officer at the end of 1968. Acquisitions under Miller included snowmobile maker Polaris, Australian card maker Valentine Holdings, and the venture capital firm American Research & Development.

Miller's tenure at Textron ended in 1977, when President Jimmy Carter nominated him to be chairman of the Federal Reserve. He later served as Secretary of the Treasury for President Carter. Joseph Collinson succeeded Miller as Textron's chairman and CEO.

From the 1960s through the 1980s, Textron's management philosophy remained relatively constant. The corporate office, for the most part, maintained oversight of operational issues. During this time business units operated autonomously and corporate staff was small. Oversight by the corporate center was handled by a rotating group of corporate officers called group vice presidents.

In 1979, Collinson retired, and he was succeeded by Robert P. Straetz as chairman and CEO. Beverly F. Dolan, founder and former president of E-Z-GO, was president. By the end of 1979, revenues had risen to $3.3 billion.

Staying Independent through Growth

Later brochure

In October 1984, Textron emerged newly strengthened for growth in a reviving economy. Straetz and Dolan realized that the company could grow most effectively through strategic acquisitions.

In February 1985, Textron acquired Avco Corporation of Connecticut, a conglomerate of almost equal size with pre-acquisition revenue of $2.9 billion. Overnight, with the addition of its Avco subsidiary, Textron nearly doubled in size.


Dolan, who had become chairman in 1986 upon the retirement of Straetz, initiated the second major acquisition of the decade that same year. Ex-Cell-O brought another $1.1 billion in annual sales from the aerospace, defense, automotive and industrial markets. This acquisition made Textron a major player in the automotive industry. Shortly thereafter, Textron common stock split for the third time in its history in June of 1987.

Building a Focused Operating Company

In 1989, Dolan recruited James F. Hardymon as Textron's new president after a 28-year career at Emerson Electric, where he had most recently served as president and COO. Hardymon quickly distinguished himself by his determination to design a more focused operating company that would produce consistent quarter-over-quarter earnings growth. He was named chairman and CEO in 1992.

Cessna Logo

One of Hardymon's first actions as CEO was to acquire Cessna Aircraft Company, which became a subsidiary of Textron. A leader in light and medium-sized commercial business jets, Cessna balanced Bell's significant defense-related business activity.

In order to increase corporate oversight of operations, Hardymon brought in a top executive from General Motors - Lewis B. Campbell - as executive vice president and COO in 1992. In 1994, Campbell was elected president and COO.

With a dual-focus on operational improvement and portfolio management, Hardymon set out to maintain the record of consistent growth the company had begun to build during his tenure as president. From 1989 to the end of 1997, Textron decreased its holdings in military contracting, insurance and consumer products, divesting "non-core" businesses with $2.8 billion in revenue while bolstering its "core" by acquiring businesses totaling $3.9 billion in revenue. Over this time, the company migrated from deriving 56 percent of revenue from core businesses to obtaining 100 percent from the then-core of aircraft, automotive, industrial and finance. Meanwhile, Textron focused on increasing international revenue as a source of growth. In 1989, approximately 20 percent of Textron's revenue came from non-U.S. operations. By the end of 1997, this figure had almost doubled.

Building and Growing

Hardymon simultaneously focused on evolving Textron from a classic holding company to an operating company, distinguished as much for building and growing businesses as for buying and selling them.

A first-ever operations management process was developed to coordinate strategic, financial, and human resource planning across Textron. Hardymon and Campbell also introduced the notion of leveraging the collective strengths and synergies of Textron's businesses. This was perhaps most evident in their acquisition strategy, which focused on acquiring companies that offered complementary products, markets or manufacturing processes and capabilities.

Car interior

In 1994, following the acquisition of the plastics operations of Chrysler's Acustar Division, Textron's six automotive businesses were combined into one company, Textron Automotive Company. Similarly, in 1995, Textron Fastening Systems Inc. (TFS) was formed by merging five Textron fastening companies to form a global fastener group, making TFS the largest producer of engineered fastening products and solutions in the world.

Increasing teamwork among Textron's employees also became a priority. Cooperation among engineering, sales, marketing, product development, operations and other functions was fostered through councils, forums and meetings that brought together different businesses and segments. In May of 1997, Textron common stock split for the fourth time in its history. In addition, Hardymon's laser focus on achieving a consistent and strong financial performance resulted in 45 quarters of continuous year-over-year quarterly earnings growth. During Hardymon's tenure as CEO, the stock price increased from $19.81 per share on January 1, 1992 to $71.69 per share on June 3, 1998, reflecting the market's strong correlation between earnings growth and stock price appreciation.

A Framework for Transformation

In a well-defined succession planning process, Lewis B. Campbell was appointed CEO on July 1, 1998. In his first month as CEO, Campbell demonstrated his sharp focus on Textron's core operations and his decisive and disciplined management style by announcing the divestiture of Avco Financial Services. The most significant strategic event of the decade for Textron, the sale was completed in January 1999 for $3.9 billion to Associates First Capital Corporation.

Campbell assumed the additional responsibility of chairman on February 1, 1999, shortly after Hardymon's retirement. Soon after his appointment, Campbell began engineering a new strategic framework for Textron aimed at strengthening financial performance during the good times and improving the company's ability to weather unforeseen economic headwinds and market downturns. This was a fortuitous move, as earnings growth decoupled from stock price appreciation, signaling a major shift in how companies would create value. Campbell knew that radical change was needed in order to continue to successfully compete – and continue to build shareholder value – in the evolving multi-industry marketplace. He also knew that this would mean fundamentally changing the very DNA of the company from its 80-year history as a conglomerate to a truly integrated enterprise, making the whole of Textron greater than the sum of its parts.

Recognizing that an unprecedented transformation was essential to achieve this ambition, Campbell established Textron’s Transformation Leadership Team (TLT) in 2000, composed of the top leaders from Textron and its business units. The charter for this team: to advance Textron's new strategic framework to generate sustainable and compelling growth well into the future. This also spawned a comprehensive operational and cultural "reinvention" of Textron to deliver strong shareholder value and create a solid foundation for long-term growth and profitability. It was at this time that Textron also deemed "Return on Invested Capital" (ROIC) its primary financial compass, in addition to maintaining a continued focus on cash generation and a strong balance sheet.

The TLT determined that to truly transform and prime the company for future success, Textron needed to take difficult - yet critical - steps toward restructuring and reconfiguring the company. These strategic steps led to initial restructuring savings of approximately $154 million in 2001 and the divestiture of several businesses, which contributed $1.6 billion in revenues. Most significantly divested was the Textron Automotive Trim business. By the end of 2005, Textron had achieved significant shareholder returns and, for the first time since undertaking the company's transformation, exceeded the targeted rate of return on invested capital.

The Networked Enterprise

Under Campbell's stewardship, what initially began as a new strategic framework evolved into a new vision for the corporation: to become the premier multi-industry company, recognized for its network of powerful brands, world-class enterprise processes and talented people. This shared vision, established in 2002, became both a mantra and a driving force for Textron employees worldwide.

This vision would not have been possible without elevating the concept of synergy - leveraging and combining where it makes strategic sense, while enabling our businesses and brands to do what they do best as they serve their unique customers and markets. This approach established the "networked enterprise" and led to the implementation of common processes and powerful tools, while allowing our businesses the freedom to manage their business on a day-to-day basis, develop talent, encourage innovation and better address customer needs.

These same processes and tools also enabled us to drive operating performance and efficiencies as well as boost productivity and cost savings. Officially launched in 2002, Textron Six Sigma is perhaps the most compelling process improvement initiative across the enterprise. This critical discipline, designed to drive growth while eliminating waste, has become part of the very fabric of our company.  Today, over 95 percent of our 180+ Global Leadership Team has attained Green Belt certification.

Textron continued to make strategic divestitures and complementary acquisitions to strengthen its strategic portfolio, including the divestitures of its Fastening Systems business in August 2006, the sale of its Fluid & Power business in November 2008 and the sale of HR Textron in 2009. Meanwhile, Textron has continued to make acquisitions to complement its core businesses, including Overwatch Systems in 2006 and United Industrial Corporation (which owns AAI Corporation) in 2007. Also in 2007, Textron common stock split for the fifth time.

Powerful Global Brands

Textron’s global brands – Bell, Cessna Aircraft, E-Z-GO, AAI Corporation, Lycoming Engines and Greenlee, among others – are recognized for their innovative products that perform each and every day for customers. The innovations that we’ve brought to our markets have produced aircraft like the Bell-Boeing V-22 Osprey tiltorotor – a revolutionary advancement in aviation history – that made its first deployment in Iraq in 2007 and is used today in Afghanistan.

Such innovation has also led to recent product launches, including Cessna’s 162 SkyCatcher, which marked Cessna’s entry into the light sport aircraft market, and Bell’s Model 429, a light, twin-engine aircraft that is the world’s newest certified helicopter. The E-Z-GO RXV has been a “game-changer” with a golf car that delivers greater comfort and energy efficiency for customers. Jacobsen’s Eclipse 322 hybrid riding greens is the first of its kind – free of hydraulics, easy to maintain and customized to meet the specific requirements of any golf course.

Textron Leadership Today

Bell Helicopter, A Textron Company Campbell led a multi-year succession planning process that culminated in his retirement as CEO on December 1, 2009. He was succeeded by Scott C. Donnelly, who joined Textron in July 2008 as executive vice president and chief operating officer and was promoted to president and chief operating officer six months later. He became chairman of the board on September 1, 2010.

Donnelly joined Textron after a 19-year career at General Electric, most recently as president and CEO of its aviation unit. He was widely praised as a decisive leader with tremendous strategic vision and operating acuity. During the global economic crisis of late 2008 and 2009, Donnelly led the effort to put Textron’s liquidity strategy on a strong path and spearheaded the restructuring initiatives and operating improvements across Textron.

Under Donnelly's leadership, Textron’s steadfast execution of its financial and operational strategies continues to build value for all of its stakeholders. Combined with its portfolio of renowned brands and some of the most sophisticated and leading technology products in the world, there are tremendous opportunities ahead for Textron to deliver for its customers.