Grundman Cited In Aviation Week, “Top Performing Companies Prove Their Business Prowess”

24 April 2015 • 0 Comments

“Surpassing these trends, however, is the idea that the companies in general are leaner, more efficient and more productive, per worker. If possible, major assets and inventories are placed or left in the hands of others, e.g., shipyards with the government instead of defense shipbuilders, or Tier 1 aerostructure providers instead of the nameplate original equipment manufacturers (OEMs). Liabilities such as pensions, once proverbial albatrosses around the neck of industry, are being optimized. Finally, free cash flow, the money generated and left over after assets are dealt with, is maximized and most of it is returned to shareholders and investors. “It has to do with the treatment of assets,” says Steven Grundman, a TPC adviser, George Lund Fellow at the Atlantic Council, and former assistant secretary of defense for industrial affairs and installations. “Utility-style companies that manage assets well and generate cash succeed in this model . . . [even though] that does not tend to be a thing we all celebrate.”


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