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I have a new task where the client is asking for a .dwg file of layer labels. My first thought would be to create an annotation of the labels and then try and use the Export to CAD tool in ArcMap. Does this sound like an appropriate workflow?

I am using ArcMap 10.1

Ultimately I would like to create a model and tool to do this.

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Yes I've done this just recently using the geodatabase annotation/Export to CAD tool method. – artwork21 Jan 10 at 15:44

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How you mentioned is exactley how it needs to be done. You need to export the annotations to a geodatabase and then export them to CAD. There is also some fields that need to be added so everything exports right. There is a technical article that outlines the steps; I've had to do this a number of times. This is probably doable with a model, but I think it would be easier to do in python. I learned how to do some stuff in model builder but I think it's actually easier in python (and I am fairly new to python).

Here's the article:

http://support.esri.com/en/knowledgebase/techarticles/detail/30328

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