August 14, 2019 | International, Aerospace
Michael Bruno
United Technologies (UTC) and Raytheon are working hard to convince shareholders to approve their mega-merger.
L3 Harris Technologies is riding high after its heritage companies consolidated recently. Industry insiders are making bets on who is next.
But Honeywell International has been conspicuously absent in all the major merger and acquisition (M&A) moves in recent years. Why? Honeywell Aerospace chief executive Tim Mahoney recently explained how his company still plans to take advantage of the wave of consolidation hitting aerospace and defense.
“We've looked,” Mahoney told an Aug. 7 investor conference. “We've never thought—and we continue to not think—that scale is a major discriminator and a differentiator within our marketplace. Having said that, you need to be large enough to be relevant, and we have been at that point. But scale is not something that is attractive or makes you more attractive from an OEM perspective or from an aftermarket perspective. We've continued to differentiate ourselves relative to value-added offerings.”
Mahoney spoke during a live interview with analyst Sheila Kahyaoglu at the Jefferies Global Industrials Conference. While Honeywell has remained active with bolt-on acquisitions—including the July 24 announcement it will buy autopilot specialist TruTrak Flight Systems for an undisclosed amount—the company has not consummated a prime- or OEM-level deal and even walked away from talks with UTC in 2016.
That same year, Honeywell did buy warehouse automation specialist Intelligrated for $1.5 billion. And Honeywell leaders have long assured Wall Street that they keep their eyes open in A&D, as Mahoney reaffirmed. But they have complained that valuations were too rich to be conducive to dealmaking. Mahoney also indicated that Honeywell could take advantage of the consolidation trend in another way.
“We've actually gone back and looked at when there has been very significant consolidations, or two companies coming together,” he explained. “That has actually helped us from a market share perspective, because typically when there's a large-scale integration of two companies, those two companies become inwardly focused, which is understandable.
“As a result, we've been opportunistic relative to that,” he continued. “If you look at our cockpit systems business or some of those areas where we've competed with some of the companies that have consolidated, our auxiliary power unit business, you would see that we've actually grown disproportionately larger during those time periods.”
One area Honeywell is now focusing on growing is its new big-data analytics software Forge, which the company recently rolled out for airlines and other industrial companies (Aviation DAILY, June 6). While the software expectedly looks to provide aircraft operators with predictive maintenance, fuel optimization and other flight operation benefits, Honeywell is looking to add ground operations through an expanding experiment with Swissport, one of the world's largest airport ground service providers.
Last December, Honeywell and Swissport signed a five-year agreement initially to apply Honeywell's GoDirect Ground Handling product used across Swissport's global operation base. Ben Driggs, president of Honeywell Connected Aircraft, told the investor conference that the goal is to achieve faster airplane turnarounds in the 20-40% of the time the aircraft is on the ground.
He said the partnership is first being implemented in Kansai International Airport (KIX) for Osaka, Japan, with Miami, Basel, Switzerland and “numerous” other Swissport airports planned.
https://aviationweek.com/defense/big-ad-firms-seem-be-merging-or-acquiring-where-s-honeywell
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U.S. and Ukrainian government representatives signed an agreement to speed weapons co-production and data sharing at a conference in Washington on Wednesday.
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Britain's minister of the armed forces said it’s “inescapably necessary to look at the size of your stockpiles."
February 13, 2020 | International, Land
The Army's slashed its 2021 buys of the Armored Multi-Purpose Vehicle (AMPV) and upgraded Paladin PIM howitzer to give the factory time to make fixes, particularly to quality control. By SYDNEY J. FREEDBERG JR. PENTAGON: Two of the three armored fighting vehicle programs being built by BAE System's factory in York, Pennsylvania have been slashed in the 2021 budget. While the Marine Corps continues to ramp up production of its eight-wheeled Amphibious Combat Vehicle, from 56 ACVs in 2020 to 72 in '21, that increase is swamped by Army cuts to two tracked vehicles, both derived from BAE's iconic but aging M2 Bradley: Production of the turretless utility variant of the Bradley, the Armored Multi-Purpose Vehicle (AMPV), will plummet from 121 in the 2020 budget to just 32 in '21, recovering to 168 in '22. Production of the upgraded M109A7 PIM version of the Paladin artillery vehicle, which uses the Bradley suspension and drive train, will fall from 96 vehicles (48 howitzers and 48 ammo carriers) to 60, recovering to 88 in '22. Those 2022 figures are a forecast in the five-year budget plan, however, not a formal request to Congress, and they might change. “Once you start to get that production line facilitized — and again it's not going to be one of those things you figure out in a couple months — it's going to be an iterative every-year look at what's the right rate [and] what's the most effective and efficient way to run that line,” deputy assistant secretary John Daniels told reporters yesterday. The Army had already reduced production of both BAE vehicles in its 2020 request last year – along with over 180 other programs – as it ruthlessly scrubbed its current programs for savings it could reinvest in higher-priority, higher-tech weapons for future wars with Russia or China. But BAE's York plant has also had trouble keeping up both quality-control standards – notably for welding armored hulls – and production rates as it tried to expand its tooling and its workforce to meet Army demand, attracting the personal attention of then-Army Secretary Mark Esper. Raytheon's Naval Strike Missile Gallery The Naval Strike Missile is a long-range, precision strike weapon that seeks and destroys enemy ships at distances greater than 100 nautical miles. Learn More. “Part of the problem was “getting the production facility right-sized,” Daniels said, “[and] there were some additional unforeseen issues in the industrial base” – presumably a reference to the quality control issues. So the Army decided to “slow the production curve to get a little bit of time to get a better vehicle,” he said. “It would delay it by about six months.” We've asked BAE Systems for comment and will update this story as soon as they get back to us. https://breakingdefense.com/2020/02/bae-york-plant-problems-trigger-big-army-cuts