Our company, Rockwell Collins, Inc., is a leader in providing design, production
and support of communications and aviation electronics for commercial and military
customers worldwide. While our products and systems are primarily focused on aviation
applications, our Government Systems business also offers products and systems
for ground and shipboard applications. We also provide a wide range of services
and support to our customers through our network of over 60 service centers worldwide,
including equipment repair and overhaul, service parts, field service engineering,
training, technical information services and aftermarket used equipment sales.
We operate in multiple countries and are headquartered in Cedar Rapids, Iowa.
We serve a broad range of customers worldwide, including manufacturers of commercial
air transport, business and regional aircraft, commercial airlines, regional
airlines, fractional operators, business jet operators, the U.S. Department
of Defense, U.S. Coast Guard, civil agencies, defense contractors and foreign
ministries of defense. We market our products, systems and services directly
to Commercial Systems and Government Systems customers through an internal marketing
and sales force.
Our Commercial Systems business supplies flight deck and cabin systems and
products to customers in the air transport and business aviation market.
Our Government Systems business supplies defense electronics products and integrated
systems, including communications, navigation and displays, for airborne, ground
and shipboard applications to the U.S. Department of Defense, U.S. Coast Guard,
civil agencies, defense contractors and foreign ministries of defense.
Our largest customers have substantial bargaining power with respect to price
and other commercial terms. Although we believe that we generally enjoy good
relations with our customers, the loss of all or a substantial portion of our
sales to any of our large volume customers for any reason, including the loss
of contracts, bankruptcy, reduced or delayed customer requirements or strikes
or other work stoppages affecting production by these customers, could have
a material adverse effect on our business, financial condition, results of operations
and cash flows.
We believe we have adequate sources for the supply of raw materials and components
for our manufacturing and service needs with suppliers located around the world.
Electronic components and other raw materials used in the manufacture of our
products are generally available from several suppliers. We continue to work
with our supply base for raw materials and components to ensure an adequate
source of supply, including strategic alliances, dual sourcing, identification
of substitute or alternate parts that meet performance requirements and life-time
buys. These life-time buys involve purchases of multiple years of supply in
order to meet production and service requirements over the life span of a product.
Competition
We operate in a highly competitive environment. Principal competitive factors
include total cost of ownership, product and system performance, quality, service,
warranty terms, technology and design engineering capabilities, new product
innovation and timely delivery. We compete worldwide with a number of United
States and international companies, including approximately ten principal competitors
in each of our Commercial Systems and Government Systems businesses. Some of
our competitors include Honeywell International, Inc., Thales S.A., Matsushita,
Raytheon Co., Harris Corp., BAE Systems Aerospace, Inc., General Dynamics Corporation,
L3 Communications, Inc., and Northrop Grumman Corp. Several of our competitors
are significantly larger than us in terms of resources and market share, and
some of our competitors are also our customers.
Some of our competitors have more extensive or more specialized engineering,
manufacturing and marketing capabilities than we do in some areas. As a result,
these competitors may be able to adapt more quickly to new or emerging technologies
and changes in customer requirements or may be able to devote greater resources
to the development, promotion and sale of their products. Furthermore, competitors
who have greater financial resources may be better able to provide a broader
range of financing alternatives to their customers in connection with sales
of their products.
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