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Rockwell Collins Vies for 777X Work to Trump Honeywell

Rockwell Collins Inc., successful in wresting work from Honeywell International Inc. (HON) on one Boeing Co. jet, seeks to repeat that victory as the planemaker upgrades its biggest twin-engine model.

The new contest is shaping up over cockpit avionics as Boeing starts developing the 777X, the next variant of its popular 777, said Rockwell Collins President Kelly Ortberg, 53, who will become chief executive officer at the end of next month. Honeywell is the incumbent on the existing jet.

“On the current 777, we don’t have a lot of standard equipment,” Ortberg said yesterday in an interview at the Paris Air Show. “It’s surely a market-share-gain opportunity.”

Winning contracts for cockpit avionics would be a prize because the 777 is Boeing’s best-selling twin-engine wide-body model. Boeing chose Cedar Rapids, Iowa-based Rockwell Collins in November to provide cockpit displays for the 737 Max, an update of the world’s best-selling airliner, displacing Honeywell.

“We have a long-standing and successful partnership with Boeing, delivering a portfolio of technologies to its aircraft that extends well beyond avionics,” Bill Kircos, a Honeywell spokesman, said in an e-mail. “We will aggressively compete in any future opportunities.”

He declined to comment specifically on the 777X work.

Marc Birtel, a Boeing spokesman, said it’s too early in the 777X’s development to comment on the avionics contract.

Last Chance

The 777 program may be the last chance for years for either Rockwell Collins or Honeywell to win such a contract. After adding wide-body planes and refreshing their single-aisle models, neither Boeing nor Airbus SAS is likely to start work soon on another commercial plane, Ortberg said.

He didn’t give a value on the work for the new 777. Cockpit avionics, which include display screens and flight management systems, are part of Rockwell Collins’s commercial business, which accounted for 45 percent of the company’s $4.73 billion in fiscal 2012 sales, according to data compiled by Bloomberg.

Rockwell Collins has the avionics on Airbus’s A350, which had its first flight last week, and on Boeing’s 787 Dreamliner. The cockpit displays offered by Rockwell Collins on the 737 Max were similar to those it provides for the 787.

Rockwell Collins may have a leg up on competitors for the 777X work if Boeing wants displays similar to those on the Dreamliners and the 737 Max, said Ortberg, whose company only has the autopilot system on the current 777.

Business Jets

Even as contract opportunities for new commercial planes slow, work is under way on new business jets, especially the largest models, said Ortberg, who will succeed retiring CEO Clay Jones, 64.

“There’s still quite a few biz jets that are unannounced that are in the development phase, and we’re working on several development programs now,” Ortberg said. “Across the marketplace, everybody continued to invest through the cycle with new products.”

Ortberg said he will focus on increasing international military sales when he takes over, with a goal of boosting those to 35 percent of the defense unit’s revenue in five years from 28 percent now. Brazil, India and Middle East nations provide the most opportunity, he said.

The defense business, which makes up about half Rockwell Collins’s sales, produces surveillance systems, precision-guided munitions and other military equipment.

International sales will help offset weakness in the U.S. defense business, which will decline in 2014 and be unchanged in 2015. By 2017, that business will track the inflation rate with growth of 1 percent to 2 percent a year, Ortberg said.

To contact the reporter on this story: Thomas Black in Paris at tblack@bloomberg.net

To contact the editors responsible for this story: Ed Dufner at edufner@bloomberg.net; Benedikt Kammel at bkammel@bloomberg.net

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