Home Business Congress to question TransDigm over defense profits exceeding 1,000%

Congress to question TransDigm over defense profits exceeding 1,000%

Congress to question TransDigm

TransDigm Group Inc executives will testify before a Congressional committee on Wednesday after a Pentagon-endorsed investigation found the aircraft parts supplier made profits exceeding 1,000% on some spare parts and equipment.

Trans Digm shares were down 3.2% in early trading as the broader market was flat. According to a House of Representatives committee memo seen by Reuters, TransDigm had “extreme” profit margins, and that “in five of the worst examples examined by the Committee, TransDigm made excess profits of between 1,385% and 4,436%.”

Chief Executive Officer Kevin Stein and other company executives were scheduled to speak to the House Committee on Oversight and Reform.

The congressional memo said that in one example the Department of Defense paid $1,443 for a non vehicular clutch disk used in a C-135 transport aircraft that cost TransDigm just $32 to produce, giving TransDigm 4,436% in profit.

Read Also: Deals of the day-Mergers and acquisitions

They could charge these exorbitant prices because it is the sole source provider for all these parts, the congressional memo said.

In his opening statement Stein said “The company did nothing in contravention of the federal acquisition laws and regulations regarding its pricing.”

The company has made several acquisitions in recent years to boost its share of the spare parts market.

After examining 113 Department of Defense contracts the Pentagon’s inspector general recommended them repay $16.1 million in excess profits, the memo said.

The company informed the Committee in a letter on May 7 that it “has not yet determined whether it will make a voluntary refund as recommended by the Department of Defense Office of Inspector General,” the congressional memo said.

Must Read

10 Advice Bill Gates Has to Young People Who Want to be Rich

Bill Gates became a billionaire in 1987 at the age of 31 and the richest man in the world at the age of 39....

10 Mistakes Most Young People Make and Regret it Later

Mistakes Most Young People Make and Regret it Later If something excites you too much, it is likely something is probably wrong about it. Adolescence...

10 Things You Need to Achieve By the Time You Are 30

10 things you need to achieve by age 30 | Life feels more interesting between age 20 and 30 from becoming an adult who...

Buying Treasury Bills in Ghana Made Easy

Buying Treasury Bills in Ghana Made Easy: How to buy treasury bills from home. In this article, we have put together a few simple...

Safe Cryptocurrency Trade Measures

Safe cryptocurrency Trade Measures: How to trade cryptocurrency safely Safe cryptocurrency Trade: The quest to make money and make it fast is no strange thing...

You have successfully subscribed to Fastsucessnow.com

There was an error while trying to send your request. Please try again.

Success Now will use the information you provide on this form to be in touch with you and to provide updates and marketing.