Honeywell

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Honeywell International, Inc.
Type Public
Founded 1906, 1999 by merger with AlliedSignal
Headquarters Morristown, New Jersey
Key people David M. Cote, CEO
Products Aerospace & Defense , Automation & Control Solutions , Specialty Materials, Transportation systems
Revenue $34.5 billion USD (2007)
Net income $ 2.444 billion USD (2007)
Employees 122,000
Website www.honeywell.com
Honeywell Heating Specialties Company Stock Certificate dated 1924 signed by Mark C. Honeywell
Honeywell Heating Specialties Company Stock Certificate dated 1924 signed by Mark C. Honeywell
For other uses, see Honeywell (disambiguation).

Honeywell (NYSE: HON) is a major American multinational conglomerate company that produces a variety of consumer products, engineering services, and aerospace systems for a wide variety of customers, from private consumers to major corporations.

Honeywell is a Fortune 500 company with a workforce of approximately 122,000, of which approximately 57,000 are employed in the United States.[1] The company is headquartered in Morristown, New Jersey. Its current chief executive officer is David M. Cote. The company was part of the Dow Jones Industrial Average Index until it was replaced on February 9, 2008.

Honeywell has many brands that consumers may recognize. Some of the most recognizable products are its line of home thermostats (particularly the iconic round type), Garrett turbochargers, and automotive products sold under the names of Prestone, Fram, and Autolite.

Contents

[edit] History

Honeywell came into being through the invention of the damper flapper, a thermostat for coal furnaces, by Albert Butz, in 1885 and subsequent innovations in electric motors and process control by Minneapolis Heat Regulator Company tracing back to 1886. In 1906, Mark C. Honeywell founded Honeywell Heating Specialty Co., Inc. in Wabash, Indiana. Honeywell's company merged with Minneapolis Heat Regulator Company in 1927. The merged company was called the Minneapolis-Honeywell Regulator Company. Honeywell was its first president, W.R. Sweatt its first chairman.[2]

[edit] Sweatt leadership legacy

W.R. Sweatt and his son Harold provided 75 years of uninterrupted leadership for the company. W.R. Sweatt survived rough spots and turned an innovative idea — thermostatic heating control — into a thriving business. Harold, who took over in 1934, led Honeywell through a period of growth and global expansion that set the stage for Honeywell to become a global technology leader.

For more than 30 years the company annually presented the "H.W. Sweatt Engineer-Scientist Award" to individuals in recognition of their outstanding technical ability and contribution to technical accomplishment of significance for the company and their profession. The award program was canceled after the AlliedSignal and Honeywell merger in 1999.

Honeywell thermostat
Honeywell thermostat

[edit] James H. Binger

James H. Binger (1916–2004) grew up in St. Paul, Minnesota. He attended the Blake School. He earned an economics degree from Yale University and a law degree from the University of Minnesota. On graduation, he joined Minneapolis law firm Dorsey & Whitney, where a client was Honeywell.

In 1943 he joined Honeywell, and became its president in 1961 and its chairman in 1965. On becoming Chairman of Honeywell, Binger revamped the company sales approach, placing emphasis on profits rather than on volume. He also stepped up the company's international expansion — it had six plants producing 12% of the companies revenue. He also officially changed the company's corporate name from Minneapolis-Honeywell Regulator Co. to Honeywell.[3]

From the 1950s until the mid-1970s, Honeywell was the United States importer of Pentax cameras and photographic equipment. These products were labeled in the U.S. Honeywell Pentax.

Under Binger's stewardship from 1961 to 1978 he expanded the company into such fields as defense, aerospace, computers and cameras.

[edit] Computing

Honeywell originally entered the computer business via a joint venture with Raytheon called Datamatic Corp., but soon bought out Raytheon's share and the business became a Honeywell division. It also purchased minicomputer pioneer Computer Control Corporation, renaming it as Honeywell's Computer Control Division. Through most of the 1960s, Honeywell was one of the "Snow White and the Seven Dwarfs" of computing. IBM was "Snow White," while the dwarfs were the seven significantly smaller computer companies. Later, when their number had been reduced to five, they were known as "The Bunch", after their initials: Burroughs, Univac, NCR, Control Data Corporation, and Honeywell.

A 1990 Honeywell-Bull DPS 7 mainframe
A 1990 Honeywell-Bull DPS 7 mainframe

In 1970, Honeywell bought General Electric's computer division. The company was reorganized into two operating units one of which was Honeywell Information Systems, headed by President Clarence (Clancy) Spangle.

In 1991 Honeywell's computer division was sold to Groupe Bull.

[edit] Defense Interests

Honeywell entered the defense industry in World War II, at first producing aerospace elements. During and after the Vietnam Era, Honeywell's defense division produced a number of products, including cluster bombs, missile guidance systems, napalm and land mines. The Honeywell project, founded in 1968, organized protests against the company to persuade it to abandon weapons production.

In 1990, Honeywell's defense division was spun off into Alliant Techsystems, whose headquarters are in Edina, a suburb of Minneapolis. Honeywell continues to supply aerospace products including jet engines.

In 1996, Honeywell acquired Duracraft and began marketing its products in the home comfort sector. Today, Kaz Incorporated owns both Duracraft and Honeywell's home comfort lines.

[edit] Specialty Materials

Honeywell’s Specialty Materials business can trace its heritage to a small sulfuric acid company started by chemist William H. Nichols in 1870. By the end of the 19th century, Nichols had formed several companies and was recognized as a force in America’s fledgling chemical industry. Nichols’s vision of a bigger, better chemical company took off when he teamed up with investor Eugene Meyer in 1920. Nichols and Meyer combined five smaller chemical companies to create the Allied Chemical & Dye Company, which later became Allied Chemical Corp., and eventually became part of AlliedSignal, the forerunner of Honeywell’s Specialty Materials business. Meyer went on to serve in the Coolidge, Hoover and Truman administrations and to buy the Washington Post newspaper in 1933. Both he and Nichols have buildings named after them in Honeywell’s headquarters in Morristown, N.J. Andreas Kramvis is the current President and CEO of the Specialty Materials division.

[edit] GE-Honeywell merger attempt

General Electric announced in 2000 it would attempt to acquire Honeywell; at the time, Honeywell was valued at over $21 billion. The merger was cleared by American authorities but was blocked by the European Commission's competition commissioner, Mario Monti, on July 3, 2001. This decision was taken on the grounds that GE's dominance of the small jet engine market (led by the General Electric CF34 turbofan engine), leasing services (GECAS), and Honeywell's portfolio of regional jet engines and avionics, the new company would be able to "bundle" products and stifle competition through the creation of a horizontal monopoly. US regulators disagreed, finding that the merger would improve competition and reduce prices; United States Assistant Attorney General Charles James called the EU's decision "antithetical to the goals of antitrust law enforcement."[4] In 2007, General Electric acquired Smiths Aerospace, which had a similar product portfolio.[5]

[edit] Today

The current "Honeywell International Inc." is the product of a merger between AlliedSignal and Honeywell Inc. in 1999. Although AlliedSignal was twice the size of Honeywell, the combined company chose the name "Honeywell" because of its superior brand recognition. However, the corporate headquarters were consolidated to AlliedSignal's headquarters in Morristown, New Jersey rather than Honeywell's former headquarters in Minneapolis, Minnesota. When Honeywell closed its corporate headquarters in Minneapolis, over one thousand employees lost their jobs. A few moved to Morristown or other company locations, but the majority were forced to find new jobs or retire. Soon after the merger, the company's stock fell significantly, and the stock value only regained the pre-merger level in 2007.

In 2002 Knorr-Bremse took over from Honeywell International Inc USA its share of joint ventures in Europe, Brazil and the USA. Bendix Commercial Vehicle Systems became a subsidiary of Knorr-Bremse AG. Although declining in influence, Honeywell maintains a presence in emerging industries, such as Northern Alberta's Oilsands. Honeywell's Plant integrator is currently deployed in some of the most important plant-sites in the Oilsands (i.e Syncrude, Suncor and others).

In December 2004, Honeywell made a £1.2bn ($2.3bn) for Novar plc.[6][7] The acquisition was finalized on 31 March 2005.[8][9]

[edit] Six Sigma Plus

Honeywell International is known for its aggressive implementation and daily practice of six sigma and lean manufacturing methodologies commonly referred to as Six Sigma Plus. Six Sigma Plus is focused on reducing errors/failures, improving cycle time, and reducing costs. Recently, Honeywell announced the implementation of a corporate philosophy known as the Honeywell Operating System (HOS), which incorporates practices from the Toyota Production System.

[edit] Honeywell Technology Solutions

Honeywell Technology Solutions (HTS) is a research lab within Honeywell dedicated to innovative product research.[citation needed] HTS provides value to Honeywell businesses through Product Solutions & Analytics, New Product Introduction, Advanced Research and Technology and IT & Business Process Solutions.[10]

[edit] Corporate governance

Current members of the board of directors of Honeywell are: Gordon Bethune, Jaime Chico Pardo, David Cote, Scott Davis, Linnet F. Deily, Clive Hollick, James Howard, Bruce Karatz, Russ Palmer, Ivan Seidenberg, Brad Sheares, Eric Shinseki, John R. Stafford, and Michael W. Wright.

[edit] Environmental record

In 2006, Honeywell announced that its decision to stop manufacturing mercury switches had resulted in reductions of more than 11,300 kg, 2800 kg, and 1500 kg respectively of mercury, lead, and chromic acid usage. The largest reduction represents 5% of mercury use in the United States.[11] Honeywell ranks 44th in a list of U.S. corporations most responsible for air pollution, releasing more than 4.25 million kg (9.4 million pounds) of toxins per year into the air.[12] According to the United States Environmental Protection Agency, no corporation has been linked to a greater number of Superfund toxic waste sites than has Honeywell.[13] In 2001, Honeywell agreed to pay $150,000 in civil penalties and to perform $772,000 worth of reparations for environmental violations involving:[14]

In 2003, a federal judge in Newark, New Jersey ordered the company to perform an estimated $400 million cleanup of chromium waste, citing “a substantial risk of imminent damage to public health and safety and imminent and severe damage to the environment. [15] In the same year, Honeywell paid $3.6 million to avoid a federal trial regarding its responsibility for trichloroethylene contamination in Lisle, Illinois.[16] In 2004, the State of New York announced that it would require Honeywell to complete an estimated $448 million cleanup of more than 74,000 kg (165,000 lbs) of mercury and other toxic waste dumped into Onondaga Lake in Syracuse, NY.[17] In 2005, the state of New Jersey sued Honeywell, Occidental Petroleum, and PPG to compel cleanup of more than 100 sites contaminated with chromium, a metal linked to lung cancer, ulcers, and dermatitis.[18]

[edit] Honeywell philanthropy

Honeywell maintains a very active community involvement program called "Hometown Solutions".[19] Program initiatives include matching employee volunteer involvement with charitable donations, encouraging study of maths and science, re-building after hurricane Katrina and a long-standing partnership with the National Center for Missing and Exploited Children called "Got2bSafe".[20] Literature produced by Got2bSafe has been distributed to more than 72,000 schools across America, representing every school district in the U.S. and the program has reached more than 5 million elementary school students.[verification needed]

[edit] References

  1. ^ Edgar Online SEC Filings FY 2007
  2. ^ Honeywell official history site
  3. ^ http://time-proxy.yaga.com/time/archive/preview/0,10987,940743,00.html
  4. ^ Charles James, "International Antitrust in the Bush Administration", 2001-09-21
  5. ^ "Smiths To Sell Aerospace Ops To GE For $4.8B." McGrath, S.; Stone, R. The Wall Street Journal. January 15, 2007.
  6. ^ BBC News - 13th December, 2004
  7. ^ The offer was £798m or £1.85 per share for each Novar share, with another £331m for preference shares and debt.
  8. ^ Honeywell Completes Acquisition of Novar plc; Final Clearance from European Commission Confirmed - Business Wire, March 31, 2005
  9. ^ Novar also had two other divisions, IAS and SPS, which Cote indicated would be sold quickly because although strong businesses in their respective industries they did not fit with the Honeywell portfolio.
  10. ^ About Us - Honeywell Technology Solutions Lab
  11. ^ United States Environmental Protection Agency
  12. ^ Political Economy Research Institute
  13. ^ Center for Public Integrity analysis of EPA documents
  14. ^ United States Environmental Protection Agency
  15. ^ "Court Orders Honeywell To Clean Up 34-Acre Site", ‘’New York Times’’, 17 May 2003
  16. ^ “Chemical Company Pays $3.6 Mil. to Settle Suits,” ‘’Chicago Sun-Times,’’ 6 September 2003 qtd. in knowmore.org
  17. ^ “Lake Cleanup to Be Ordered in Syracuse,” ‘’New York Times’’, 29 Nov. 2004
  18. ^ “New Jersey Sues to Force 3 Companies to Clean Up Chromium Pollution at 106 sites,” ‘’New York Times,’’ 4 May 2005
  19. ^ Honeywell Hometown Solutions
  20. ^ National Center for Missing and Exploited Children

[edit] External links