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Navigating C VID-19
In-House Perspective Chris Fawzy Corporate Vice President, General Counsel, Corporate Secretary & Chief Compliance Officer of Woodward Inc. Woodward is an independent designer, manufacturer and service provider of control solutions for the aerospace and industrial markets. Chris joined Woodward as vice president, general counsel and corporate secretary in June 2007, and was appointed corporate vice president, general counsel, corporate secretary and chief compliance officer in October 2009. He directs Woodward’s global legal and compliance affairs, including commercial and strategic agreements, litigation, intellectual property, and corporate governance, and the company’s global compliance program.
environments. Our components and systems are sold to original equipment manufacturers, as well as to end users and service providers in the aftermarket for maintenance, repair and overhaul. With COVID-19, airlines were almost completely shut down as commercial air traffic demand dropped by about 80%. This impacted new builds of airplanes, as well as the aftermarket, as maintenance cycles slowed down with decreased aircraft utilization. The decrease in the aftermarket has put considerable pressure on our profitability. If you think about when you take your car in to replace a part, the price of replacing a part is much greater than when you bought the part as one of thousands of parts in your car. So, the aftermarket is more profitable for us as a company.
Two things have impacted us: COVID-19 and oil prices. COVID-19 has affected both supply and demand for our aerospace and industrial segments. And as oil prices have dropped, it’s also affected our industrial business.
Looking at all the impacts of the macroeconomic challenges, we took multiple measures to reduce costs and preserve cash as we navigate through this crisis, which unfortunately, involved layoffs, furloughs and some plant shutdowns. Our initiatives also included salary reductions for all company officers and directors, implementation of a company-wide wage freeze, elimination of annual bonuses for 2020, a decrease in our quarterly dividend, and an overall focus on reducing costs, working capital and capital expenditures.
We design and manufacture fuel systems and controls that must operate safely and consistently in harsh
Now the focus has become even greater on working capital utilization such as accounts receivable and inventory, and
How has COVID-19 impacted Woodward and its operations?
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