On the Record with
JOHN UCZEKAJ, VP/GM OF BUSINESS, REGIONAL & GENERAL AVIATION AVIONICS, HONEYWELL

Honeywell Among Cautiously Optimistic

Looking back at the past 12 months--on the success of the Honeywell/AlliedSignal union and the headline-grabbing collapse of the Honeywell/General Electric merger--John Uczekaj reckons it's fair to describe it all as a "roller coaster year."

In December 2000 the avionics expertise of Bendix/King and Honeywell was combined when the latter merged with the owner of the former --AlliedSignal. However, subsequent plans for the new Honeywell's "super-merger" with General Electric collapsed earlier this summer, when the European Commission refused to approve the process without the inclusion of changes that the companies involved were not prepared to make.

"There are clearly two sides to it all, but the reality is that the AlliedSignal and Honeywell merger has been a great successand even though the GE situation was a big distraction, in avionics we had no overlap with General Electric, so it hasn't affected our day-to-day business," says Uczekaj.

"Now, the unified Honeywell and Bendix/King organizations report to me, and I can see that we have achieved an excellent technical synergy. Many things that we are developing now, like the APEX advanced cockpit, are a result of that joint effort. It is a huge success and will continue to be a huge success. While the GE process was not fruitful, it forced us to look closer at some of things we were doing, like Six Sigma and digitization--and despite the emotional downside we got some real work done. It will enable us to move forward much more aggressively."

Uczekaj continued, "There are a lot of new aircraft coming on line that make for a very exciting environment for us right now. A lot has been said about the fragility of the market and the economic downturn, and in the past we have seen business jet sales dip before airliner sales as an early indicator of hard times. We are now starting to see what I would describe as 'conservatism' among some of the OEMs when it comes to their 2002 build rates--they are not being as aggressive as before. However, we are still very happy with the number of new aircraft being introduced, and we still have a positive outlook about Honeywell in the business aircraft avionics market.

"We are so well positioned across the whole market, with so many new aircraft and new customers. Don't forget also that the Primus cockpit is on the Embraer ERJ-135 and ERJ-145, while the Primus Epic will be on the ERJ-170 and ERJ-190. Honeywell is also on the entire Fairchild Dornier regional jet family, and both these companies have a very strong order backlog. In fact, they will take the Epic system to the next level. Its utilities organization capability, and its weight saving attributes, will be most important considerations for the regional airlines."

Among the business jet companies it is principally Dassault and Gulfstream "that have embraced the potential of Epic's man-machine interface and the large flat panel displays," says Uczekaj. "When you see some of the things that they are doing, it's breathtaking," he enthuses.

"We are concentrating on our technology verification and validation. I think with our open architecture approach there are still a few credibility worries out there that we have to deal with. But whereas last year we were just talking about things, this time we have real results to show. There are no doubts about our technology or our strategy."

-Robert Hewson