Goodrich serves a diverse group of customers worldwide in the commercial and general aviation airplane markets and in the
global defense and space markets. The company markets its products, systems and services directly to customers through an
internal marketing and sales force and through sales subsidiaries and distributors in various countries.
The company's largest customers are the U.S. government, Airbus, and Boeing.
In 2011, 2010 and 2009, direct and indirect sales to the U.S. government were approximately 23%, 25% and 22%, respectively, of consolidated sales. Indirect sales to the U.S. government include a portion of the direct and indirect sales to Boeing.
In 2011, 2010 and 2009, direct and indirect sales to Airbus were approximately 18%, 17% and 17%, respectively, of consolidated sales.
In 2011, 2010 and 2009, direct and indirect sales to Boeing were approximately 15%, 15% and 16%, respectively, of consolidated sales.
Goodrich participates in three key market channels: commercial, regional, business and general aviation airplane original equipment (OE); commercial, regional, business and general aviation airplane aftermarket; and defense and space.
Commercial, regional, business and general aviation airplane OE includes sales of products and services for new airplanes produced by Airbus
and Boeing, and regional, business and small airplane manufacturers.
The company's largest customers in this market are Boeing, Airbus, Bombardier, and Embraer.
The key growth drivers in this market channel include the number of orders for the manufacturers' airplanes, which will be delivered to customers over a period of several years, OE manufacturer production and delivery rates for in-service airplanes such as the Airbus A320 and Boeing 737NG, and introductions of new airplane models such as the Boeing 787, 747-8 and 737 MAX, the Airbus A350 XWB and A320neo, and engine types such as the Pratt & Whitney PurePower PW1000G.
Goodrich has significant sales content on most of the airplanes manufactured in this market channel. Over the last few years, the company benefited from the historically high production rates and deliveries of Airbus and Boeing airplanes and from Goodrich's substantial content on many of the regional and general aviation airplanes. Boeing and Airbus have announced production rate increases for 2012 and beyond. However, production rates are always subject to change and may be affected by economic conditions which may influence customers' willingness and/or ability to purchase new aircraft.
The commercial, regional, business and general aviation airplane aftermarket channel includes sales of products and services for existing
commercial and general aviation airplanes, primarily to airlines and package carriers around the world.
Goodrich has significant product content on most of the airplane models that are currently in service and will benefit from having strong positions on the newer, more fuel-efficient airplanes currently in service. The key growth drivers in this channel include worldwide passenger capacity growth measured by Available Seat Miles (ASM) and the size, type and utilization levels of the worldwide airplane fleet. Other important factors affecting growth in this market channel are the age and types of the airplanes in the fleet, fuel prices, airline maintenance practices, Gross Domestic Product (GDP) trends in countries and regions around the world and domestic and international air freight activity.
Capacity in the global airline system, as measured by ASM, is expected to grow in 2012 as compared to 2011. ASM expectations could be adversely affected if airlines choose to fly their in-service airplanes less frequently, or temporarily ground airplanes due to decreased demand, high fuel prices and other factors including weaker than expected global economic growth.
Worldwide defense and space sales include sales to prime contractors such as Boeing,
the U.S. Government and foreign companies and governments.
The key growth drivers in this channel include the level of defense spending by the U.S. and foreign governments, the number of new platform starts, the level of military flight operations, the level of upgrade, overhaul and maintenance activities associated with existing platforms and demand for optical surveillance and reconnaissance systems. Due to worldwide defense budget concerns, including in the U.S., Goodrich expects pressure on the level of spending over the next several years.
The market for the company's defense and space products is global and is not dependent on any single program, platform or customer. Goodrich anticipates fewer new fighter and transport aircraft platform starts over the next several years. The company also anticipate that the introduction of the F-35 Lightning II and new helicopter platforms, along with upgrades on existing defense and space platforms, will provide long-term growth opportunities in this market channel. Additionally, Goodrich is participating in, and developing new products for, the expanding intelligence, surveillance and reconnaissance sector, which should further strengthen the company's position in this market channel.
According to Goodrich, it is well positioned to grow sales over the long-term due to:
• Awards for key products on important new and expected programs, including the Airbus A350 XWB and A320neo, the Boeing 787, 747-8 and 737 MAX, the Pratt & Whitney PurePower PW1000G engine and the Lockheed Martin F-35 Lightning II;
• The large installed base on commercial airplanes and the company's strong positions on newer, more fuel-efficient airplanes, which should fuel sustained long-term aftermarket strength;
• Balance in the commercial airplane market, with strong sales to Airbus, Boeing and the regional and business jet airplane manufacturers such as Bombardier, Cessna (Textron), Embraer, Hawker Beechcraft, and Gulfstream (General Dynamics).
• Aging of the existing large commercial and regional airplane fleets, which should result in increased aftermarket support;
• Increased number of long-term agreements for product and service sales on new and existing commercial airplanes;
• Increased opportunities for aftermarket growth due to airline outsourcing;
• Growth in global maintenance, repair and overhaul (MRO) opportunities for the company's systems and components, particularly in Europe, Asia and the Middle East, where Goodrich has expanded its capacity; and
• Expansion of Goodrich's product offerings in support of key areas in the defense and space market channel, such as helicopter products and systems, ISR products and precision guidance systems for munitions.
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