News broke over the weekend about the planned merger of Fort Collins-based Woodward and Stamford, Connecticut-based Hexcel Corporation. The deal will close in the fall. Two companies serving the aerospace and defense industries will merge to create one company with a market capitalization of nearly $14 billion.
Woodward makes fluid-, motion-, and combustion-control systems for airplanes and heavy industrial and construction equipment. Hexcel makes composite materials and parts used by industry, aviation and space, such as materials used in airline engine blades.
Fort Collins has been named as the headquarters for the new company. Woodward CEO, president, and chairman of the board Tom Gendron will become chairman of the board. Hexcel CEO, president, and chairman of the board Nick Stanage will become the CEO of the newly merged company.
Woodward has announced that no changes in employee head count will occur until the merger closes later this year.
What does all of this mean to Fort Collins and the local economy?
Overall this is good news for Northern Colorado. First, Woodward remains as a company. As big as Woodward is to our area, there are some really, really big companies that could have acquired and absorbed them. Same with Hexcel. Together that’s less likely to happen.
Second, the corporate headquarters will be in Fort Collins. The significance of having the headquarters of a publicly traded company in the community cannot be understated. This is the home of the executive team. As a consequence, they and the company make significant investments in their community.
Third, the two companies have synergies that will allow them to be competitive in the aerospace market.
Fourth, this is a jolting but gentle reminder for the community. It’s easy to take companies like Woodward for granted. Since it has been here since 1955, people assume they will always be here. Hopefully that is the case. However, this merger demonstrates how dynamic business is and the need for the community to be a good partner and make the business case for companies like Woodward Hexcel.
As far as long-term regional economic impact, it will depend on the strategic direction of the new executive team. At this point that is unknown. In the meantime, this is good news for the area.
To learn more, here’s the announcement on Hexcel Corp’s website and an infographic on Woodward’s.