By John Q. Hosedrinker 
Honeywell, a U.S. industrial conglomerate, will separate into three independent companies: automation, aerospace, and advanced materials. This restructuring, driven partly by shareholder pressure from Elliott Investment Management, aims to increase agility and unlock shareholder value for each specialized entity. The separations are expected to be completed by the end of 2026 or early 2027, following a trend of other conglomerates simplifying their structures to improve competitiveness. This follows similar moves by General Electric and Alcoa, reflecting a shift away from large, diversified corporations.
Read the original article here
Honeywell, one of the few remaining US industrial conglomerates, is splitting into three separate companies. This decision comes after years of operating as a vast, multifaceted entity producing everything from eye drops to barcode scanners and high-tech industrial equipment. The aim is to create more agile and focused organizations, better positioned to compete in their respective markets. This significant restructuring is likely a response to challenges in managing such a diverse portfolio of products and services, as well as potential operational inefficiencies.
The move has sparked a range of reactions, particularly from those who interact with Honeywell products and services on a daily basis. Many express frustration with billing issues and customer service, hoping the split will improve these aspects. Electricians, mechanics, and industrial HVAC technicians, all regular users of Honeywell products, anticipate changes resulting from this major corporate restructuring. Some report consistently positive experiences with Honeywell’s residential HVAC products, while others highlight negative interactions with the company’s industrial and commercial divisions.
The scale of Honeywell’s operations is truly vast, encompassing a dizzying array of products and services. One commenter even mentions the company’s involvement in copper electroplating, highlighting the incredible breadth of its industrial involvement. This wide-ranging portfolio likely contributed to the decision to split the company; managing such diverse operations under one umbrella might have become unwieldy and inefficient. The sheer size of the company, employing over 100,000 people at one point according to a former employee, is a testament to the scope of its operations, as is its history of acquisitions, such as the integration of Allied Signal.
The planned division of Honeywell promises changes across all sectors. The opinions about the company are varied; some celebrate the move, hoping it will address long-standing issues and improve customer service. Many cite problems with billing systems and inconsistent service quality, particularly after the acquisition of Intelligrated. Others, however, report positive experiences with certain product lines, suggesting that the challenges may be more concentrated in specific areas of the business. This divergence in experience highlights the complexities of running such a large and diverse company. Perhaps the smaller, more focused entities will be better equipped to attend to the needs of their respective clientele.
The transition will undoubtedly impact employees. One commenter, a former employee who worked for Honeywell Aerospace and then HSE HVAC, plans to reconsider employment once personal responsibilities allow. The experience of rapidly cycling through engineers, highlighted by many comments, suggests potential internal challenges related to employee retention and potentially, company culture. The need for more regional managers with a stake in the company’s success is another concern raised, suggesting a potential disconnect between management and regional operations. This rapid turnover of engineers could also lead to compromised product quality in the long run, a significant risk for any company.
The legacy of Allied Signal’s acquisition is still felt within the current corporate structure. This acquisition and subsequent integrations have clearly shaped Honeywell’s current position, and the splitting decision might represent a necessary step towards revitalizing and streamlining operations. The comments also touch upon concerns about outsourcing, with many emphasizing the loss of trust due to reliance on third-party contractors and manufacturers, often located in Asia. This raises the question of whether the split will address these concerns or simply redistribute them across the three new companies.
The company’s past acquisitions and divestitures play a major role in understanding its current complexity. For instance, the sale of parts of its automotive business, including the sale of FRAM (formerly part of TRICO), highlights a willingness to adapt to market forces. The decision to split, therefore, could be interpreted as a continuation of this strategy, aiming to focus on core competencies and increase competitiveness. The comments also reveal Honeywell’s involvement in various seemingly unrelated sectors, from aerospace and HVAC to nuclear components and consumer electronics, illustrating the scale and diversity of its operations. This wide-ranging portfolio likely contributed to the decision to streamline the company through this significant corporate restructuring.
Ultimately, Honeywell’s decision to split into three companies is a bold move with potentially far-reaching consequences. The success of this strategy will hinge on the ability of the newly independent entities to address long-standing issues, improve customer satisfaction, and create more efficient and focused operations. The feedback from current and past employees and customers provides valuable insight into the company’s challenges and sets the stage for assessing the effectiveness of this ambitious restructuring plan. The future success of the newly formed companies will depend significantly on whether they can improve their processes to better meet the needs of those who rely on their products and services.