Industry Week in Review – January 10, 2014
Boeing started the year on a high note as the Company announced it set a new record of deliveries in 2013 in addition to coming to an agreement with machinist union members surrounding assembly work for the new 777X. Driven by high production rates on the 737, 777, and 787 lines of aircraft, which the OEM has been steadily ramping up over the past few years, Boeing delivered 648 commercial aircraft in 2013. This is the second time Boeing has exceeded 600 deliveries, with the first time just last year in 2012 when the Company delivered 601 aircraft. Deliveries of the 737 made up the majority with 440 units while the 777 contributed 98 deliveries. As orders continue, specifically for the newest 777X, Boeing was able to come to an agreement with union members to keep assembly work in the state of Washington, following two months of speculation. The agreement, which passed in the slimmest of margins, extends current contracts by eight years through 2024. Among the agreements in the contract, workers will receive a 4% general wage increase as well as replacing pension-plan accruals in 2016 with defined-contribution savings retirement plans. Boeing is now expected to start construction in November of the new 1.1 million square foot wing manufacturing site in the Puget Sound area. The site requires $4 billion in new investment and will employ up to 3,000 workers while the current Everett site will house the 777X final assembly line.
In his new memoir scheduled to be published next week, former Secretary of Defense Robert Gates makes interesting comments on the Obama administration, specifically on defense-related issues including policy toward the war in Afghanistan. Gates, who served as defense secretary from 2006 to 2011 under both George W. Bush and Barack Obama, is critical of Obama’s own skepticism but still considers him “a man of personal integrity”. In a statement issued by a National Security Council spokeswoman, Obama stated he deeply appreciates Gates’ service and welcomes differences of view, which serve to broaden his options and enhance policies.
TASER International, Inc. (Up 19.2%) – Shares were up this week after the Company announced strong fourth quarter results with large orders from 13 customers for its conducted electrical weapons and 29 agencies deploying its next generation smart weapons.
FLIR Systems, Inc. (Up 11.3%) – Shares were up this week after the Company introduced its Lepton thermal-imaging camera core, one of the world’s smallest microbolometer-based thermal-imaging camera cores, which will be used in the new FLIR One, a smartphone case that turns phones into fully functional night vision cameras.
Vance Street Capital LLC’s Secure Communication Systems, Inc. acquired Relativity Capital LLC’s Tactical Micro, Inc.(1), a provider of ruggedized electronics for military, homeland security, and transportation markets. Terms of the deal were not disclosed.
(1) KippsDeSanto & Co. acted as financial advisor to Tactical Micro, Inc.