Q3 2020 Raytheon Technologies Corp Earnings Call
Maybe first on the market. So on the commercial Arrow front our view remains unchanged we don't expect commercial air traffic to return to 2019 levels until at least 20 23 and that's of course depending upon the wage. I mean if a widely-distributed vaccine in the near-term, we expect a gradual recovery of commercial air traffic particularly given the recent spike in global cases. So here's an update about what we're doing about it. There's you know, we set aggressive Targets in the first quarter to reduce costs by about $2 billion dollars in to take actions to conserve about four billion dollars of cash for taking the time but necessary actions to reduce headcount at both Collins and Pratt will reduce about 20% of our commercial Arrowhead count. That's about 15,000 positions. We're also speaking out about four thousand contractors. These are primarily engineering contractors. So a total reduction of roughly 19,000 folks that of course on top of that. There's another thousand phone number.
That will be leaving his a result of the merger synergies. That's mostly corporate. So about 20,000 positions have been eliminated.
Just maybe on the opposite side of that though in our defense businesses. We are hiring in targeted areas to support the growing businesses primarily on the engineering front importantly. We're also actively seeking out structural cost reduction opportunities. We are turning our attention towards ensuring we optimize our footprint accelerate transitions from high to low cost locations and permanently reduce overhead cam one example, I've shared I've challenged the team to think very differently about how we work in the future and when we came together as RTX, our original goal was to reduce and consolidate Office Space by about 5% or about 3 million square feet. I now think we could see upwards of twenty to twenty-five percent reduction in square footage. That's it going to be a huge savings.
Additionally last week announced a new vertically-integrated highly automated turbine airfoil production facility to fulfill future gtf and f135 demand that facility will be located in Asheville North Carolina. This is going to be a green field facility that will modernize and transform Pratt's operations with cutting-edge technology while significantly reducing structural costs and enabling operational efficiencies through automation value stream co-location and best-in-class lean processes once fully operational. We expect to see annual run rate Savings of about $100,000 million dollars from this investment. Usually just a couple examples of the structural actions were taken to position ourselves for long-term success additional projects are also under evaluation, so we're not done yet.
at the same time
Not losing sight of execution across their business. Let me give you a couple of examples first or shifting some of the production of our circuit cards from our Andover Massachusetts facility 260 spaces circuit card center of excellence in Coralville, Iowa. This allows us to better meet our customer commitments and a lower cost and balances demand between our facilities.
Secondly, we're strategically utilizing available shop capacity to upgrade the gtf lead to the latest configuration to ensure. Our customers leads are healthy and well positioned as we exit the year and demand wage slowly returns.
So overall despite near-term in certain in the commercial are assign. I'm very confident in the long-term growth potential of the company. Our defense portfolio is resistant resilient with businesses that are aligned with the US national defense strategy and focus on higher-growth higher technology areas.