Textron announced April 30 its plans to separate its industrial business as part of a strategy to shift its focus solely on its aerospace and defense segments under “New Textron.”

The company is evaluating options for the industrial unit, including selling or spinning it off as an independent, publicly traded company, according to the press release.“New Textron” will align to its core franchises of Textron Aviation, Bell and Textron Systems, and generate an estimated $12 billion in revenue as an aerospace and defense company, CEO and President Lisa Atherton said on the April 30 earnings call.

Atherton added that the pending separation would “significantly” improve Textron’s financial profile and deliver top-line growth of an additional 150 basis points from revenue gains, according to a presentation. Segment profit margin would be 120 basis points higher as Textron’s backlog is valued at $19.2 billion and “100% related to the [aerospace and defense] businesses.” “Aviation is a leader in each of these segments and continues to see healthy demand and utilization across its portfolio,” Atherton said.

The CEO also said the Trump administration’s proposed $1.5 trillion Department of Defense fiscal year 2027 budget “would be a strong tailwind for the industry, providing increased visibility and stability across our defense offerings.”

Textron’s industrial business is composed of two divisions: Kautex and specialty vehicles, according to a 2025 annual securities filing.

Kautex is an automotive supplier that produces plastic fuel systems, battery enclosures and clear-vision systems such as surface cleaning nozzles or washer fluid storage. Kautex also makes bottles and containers for various applications, including food, cleaning agents, chemicals, pharmaceuticals and hazardous goods.

The specialty vehicles division manufactures specialized vehicles and ground support equipment such as golf carts, pushback and luggage tractors, under brands such as E-Z-Go, Pace Technologies, Jacobsen, Tug Technologies, Safeaero and Premier.

The industrial segment generated a revenue of $3.2 billion in 2025, down nearly 9% from $3.5 billion the previous year, according to the annual securities filing. In Textron’s first quarter, the industrial segment generated $786 million in revenue, about a year-over-year 1% decrease from $792 million, per the company’s Q1 securities filing.

Kautex increased 8% YoY to $486 million, primarily due to a “favorable impact of $20 million from foreign exchange rate fluctuations and higher volume and mix.” The specialized vehicles division’s revenue dropped 12.3% to $300 million, which reflected a $55 million impact from Textron’s sale of its powersports business in April 2025. Textron anticipates the industrial business will “thrive” on its own and generate over $3 billion in 2026 revenues with its “strong operations, well-established brands, leading market positions and real growth drivers,” Atherton said.

Textron began a restructuring plan in 2023 involving its industrial segment. In December 2024, the company announced it was pursuing “strategic alternatives” for its powersports product line, which manufactures Arctic Cat-branded ATVs and snowmobiles, as the “consumer end market demand” remained soft, according to a securities filing. Textron paused Arctic Cat vehicle production and laid off employees as a result.

In April 2025, former Arctic Cat executive Brad Darling and an unnamed investment group acquired the powersports business for an undisclosed amount. Moreover, Darling restored the manufacturing jobs at the Thief River Falls, Minnesota, facility.

Textron is the latest defense and aerospace manufacturer to pursue separations in its business segments. L3Harris Technologies inked an agreement with the DOD to launch a missile solutions business, which closed on April 23.

L3Harris intends to pursue an initial public offering in the second half of 2026 and DOD pledged to back the new entity with $1 billion, which would be converted into stock once the missile solutions enterprise goes public.

By: DocMemory
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