Textron CEO says tariffs have had little impact so far

Textron President and CEO Scott Donnelly says so far, President Trump's tariffs have not had a material impact on the company.

“I think the tariff issue is one everyone is talking about,” Donnelly told investors in a first-quarter earnings call this morning. “I would say when you look at our businesses, our largest businesses in the aviation space, whether it’s fixed-wing or rotorcraft, we are principally a North American manufacturer. The vast majority of that manufacturing is in the United States.”

Textron has operations in Mexico and Canada, but Donnelly said in their case the compliance with the U.S.-Mexico-Canada Agreement (USMCA) trade pact means they don’t have to worry about tariffs as goods cross those nations’ borders.

USMCA-compliant goods will not see a tariff while non-USMCA compliant imports from Canada and Mexico are subject to a 25% tariff, according to an April 2 White House fact sheet.

Textron subsidiary Bell experienced first-quarter revenues that were up $256 million, or 35%, compared with the first quarter of 2024. Donnelly said this was largely due to strong growth in military and commercial product lines, with the military growth being fueled by progress on the Future Long Range Assault Aircraft.

“As we progress through the FLRAA program, the focus this year includes design maturation and deliverables toward subsystem and weapon system critical design review, our next major program milestone,” he said.

In spite of the full-year continuing resolution for fiscal year 2025 that was passed recently, Donnelly said FLRAA came out looking OK, appropriation-wise.

“When you look at this full-year CR, which is obviously a very unusual situation, there were quite a few so-called amendments that provided specific guidance that allowed programs to increase. FLRAA’s a good example. That was in there at the number we always expected in terms of the appropriation process. So that’s why you’re seeing this ramp on the FLRAA side,” he said.