Textron

Last edited by crocodyl on April 22, 2008 - 3:13pm

War & Disaster Profiteering

Company Snapshot:

Textron is a multi-industry company that operates in 33 countries, and is headquartered in Providence, RI, USA. The company manufactures a variety of weapons, and is infamous for making land mines and cluster bombs which remain un-detonated for years, routinely killing civilians. Countries such as Denmark, France, Germany, Japan, and the United Kingdom are seeking to ban these munitions, but the company continues to manufacture them. The company's subsidiary, Bell Helicopter is a well-known Fort Worth Texas based manufacturer of military and commercial motor aircraft. Textron also owns Cessna Aircraft and the E-Z-GO Car Corporation, which makes golf-carts.

Ownership status:

Publicly traded

Number of employees worldwide:

40,000

Chief executive officer:

Lewis Campbell

Website:

http://www.textron.com/

Corporate accountability

Accountability overview:

Cluster Bombs

Textron produces the CBU-105 Sensor Fused Weapon, an air-to-surface cluster bomb. (Cluster bombs are designed to explode above the ground, releasing thousands of bomblets that are supposed to detonate on impact. These modern cluster bombs are devastating weapons.) Textron's CBU-105 cluster bombs have been used by the US Army during the current war in Iraq. They were primarily designed as an anti-armor/anti-tank weapon. (To learn more about how they work, watch this YouTube demo video.)

According to disarmament groups working to ban cluster bombs, combat results show between 10 percent and 40 percent fail to go off and lie primed in the target area to kill and injure civilians.

"Cluster munitions are the most dangerous weapons out there today, now [that] we have the land mine crisis under control," says Steve Goose, director of the weapons division of New York-based Human Rights Watch. "Getting a grip on this weapon is the most important thing we can do to protect civilians ... during and after combat."

40 percent of the victims of cluster bombs are children, according to Hilde Johnson, deputy director of UNICEF.

At the end of an international conference on cluster bombs held in New Zealand in February, 2008, eighty-two nations endorsed a strongly worded draft treaty on cluster munitions

Bell Helicopters skirted U.N. embargo to sell to Serbia

According to U.N. investigators, on June 5, 1998, Serbia paid $154,785 to Bell Helicopter Textron for spare parts for the maintenance of Bell helicopters. At the time, Serbia was under a U.N. arms embargo—in February, more than a year before NATO bombing began, it had commenced attacks against Kosovo—but it was in dire need of helicopters and other war supplies.

It got what it needed: Bell Helicopter parts and millions of dollars worth of other materials—through a network of shell companies and secret bank accounts that spread out from the offshore financial center of Cyprus through Greece and some 50 other countries, including the United States.

Helicopters are civilian and military dual-use equipment, allowing manufacturers as well as governments to skirt embargo rules. Any helicopter can carry secret police and troops, and civilian choppers can easily be retrofitted for military use. That seems to be what Serbia did. Radomir Markovic, head of the Serbian state security branch—the secret police—told Hague Tribunal interrogators that “We needed to secure foreign currency reserves to provide … guns for [security branch] helicopters.” He added, “I know that the equipment needed by the service arrived.”

“Dealing with Dictators: Bell Helicopters skirted U.N. embargo to sell to Serbia,” by Lucy Komisar, In These Times, Sept 13, 2002. “Serbia’s Deadly Choppers - U.S. Firm Sold Parts to Milosevic,” By Lucy Komisar, Pacific News Service, Aug 16, 2002.

Environment and product safety:

University of Massachusetts Amherst identified Textron as the 60th-largest corporate producer of air pollution in the United States, with roughly 600,000 pounds of toxic chemicals released into the air annually. Major pollutants include chromium, nickel, and manganese.

In 1998, the Department of Transportation concluded that Bell Helicopter Textron “offered hazardous materials improperly classed, described, packaged, marked, labeled, or in a condition unsuitable for shipment,” in violation of Federal Aviation Administration rules.

On April 7, 2004, Textron was found to be in violation of [Rhode Island's] Underground Storage regulations. and fined $8,440.”

On March 1, 1999, California Environmental Protection Agency entered into a consent order with the company concerning Textron's alleged unauthorized chemical treatment activity. Textron [paid an administrative fee of $1001.

Political influence:

Bribery Allegations

In August 23, 2007, the Securities and Exchange Commission announced a settlement with Textron for alleged violations of the Foreign Corrupt Practices Act. The complaint alleged that "from approximately 2001 through 2003, two of Textron's David Brown French subsidiaries authorized and made approximately $650,539 in kickback payments in connection with its sale of humanitarian goods to Iraq under the U.N. Oil for Food Program. The kickbacks were made in the form of "after-sales service fees," however no bona fide services were actually rendered....The Complaint also alleges that Textron's subsidiaries made illicit payments of $114,995 to secure thirty-six contracts in the United Arab Emirates, Bangladesh, Indonesia, Egypt, and India from 2001 to 2005."

Without admitting or denying the allegations, Textron agreed to disgorge $2,284,579 in profits, plus $450,461.68 in pre-judgment interest, and to pay a civil penalty of $800,000.

The Department of Justice issued its own release, announcing that Textron also agreed to pay a $1,150,000 fine.

Contractor Misconduct

On May 12, 1995, the US Department of Justice announced that Textron would pay $100,000 to settle allegations that it failed to properly test locknuts manufactured for military aircraft.

On November 25, 1998, Textron Aerostructures, a former subsidiary of Textron Inc., agreed to pay $9.8 million to settle allegations that it defrauded the U.S. government by inflating labor costs on a contract to construct wings for the Air Force's B-1B Bomber.

On February 17, 2005, a Texas-based jury found [Textron subsidiary] Lycoming Engines liable for fraud and ordered it to pay about $96 million to Interstate Southwest Ltd. in a case that revolved around small airplane engine failures that occurred when the planes’ crankshafts broke in flight… Lycoming claimed that Interstate Southwest had overheated the forgings, weakening the steel. According to plaintiffs attorneys, between 2000 and 2002 there were 24 failures and 12 deaths. On November 1, 2007, Interstate Southwest Ltd. prevailed in the company's attempt to appeal the initial decision.

Financial information

Stock ticker symbol:

TXT

Total revenue:

$11.49 (Bil)

Fiscal year:

2006

Additional descriptive data

Link to full list of subsidiaries:

SEC Subsidiaries List