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On the Record
Rob Gillette, President and CEO, Honeywell Aerospace
Four months after succeeding Bob Johnson at the helm of Honeywell Aerospace, Rob Gillette admits he still has much to learn about the three-dimensional world of flight, particularly in the defense and space sectors.
Gillette came to the Aerospace division, the largest Honeywell International group ($9.8 billion in sales last year), after running Honeywell Transportation Systems for three-and-a-half years. Transportation Systems includes three automotive related businesses — Turbo Technologies, a business that makes engine-boosting automobile and truck turbochargers; the Consumer Products Group, which consists of Fram, Prestone and Autolite brands; and Friction Materials, a global supplier of automotive brake friction materials and aftermarket brake products. Before coming to Honeywell, Gillette worked for 10 years in GE’s plastics business, and before that he graduated from the University of Indiana with a degree in finance.
Honeywell recorded $26 billion in sales last year, split between its four divisions – Aerospace (38%), Automation (31%), Transportation (14%) and Specialty Materials (14%). Rob Gillette, president and CEO of the Aerospace group, says the sector will see milder results this year — “mid-single-digit” growth — with $6 billion in expected sales in the commercial aerospace sector and $4.6 billion in the defense and space arena. In terms of research and development, he says Honeywell Aerospace is holding to its status quo since 2002 of 16% of revenues, half of which comes from Honeywell, the other half from its government customers.
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To come up to speed on diverse nature of Aerospace’s three business units — Aircraft Landing Systems, Aviation Electronic Services, and Engines Systems and Services — Gillette’s been on a whirlwind tour, meeting with Honeywell customers and employees, even taking in press events like the unveiling of the Airbus A380 and Dassault Falcon 7X.
His first impressions are a potpourri of ideas and observations. He notes there’s increasing demand from air transport customers for safety systems, and says there are opportunities in new combat systems in terms of technologies that enable people in the field to have data.
Internationally, he says there’s tremendous growth potential in China, but there’s a challenge to build airport infrastructure there. He refers to a “huge pent-up demand” for business aviation services in China as well, but says the military’s tight control of airspace will put the focus on commercial aviation growth first, where point-to-point services in a controlled fashion will satisfy the military.
As to his plans to make Honeywell a premier service provider, Gillette says the process is already in motion. The company’s investing heavily in SAP enterprise resource planning products (ERP), to the tune of $300 million over the next three years. He says the company will have nine “go-lives” of ERP systems this year, with “better uniformity, better service” as the goal. Says Gillette, “There should be one way to get what you need. The experience shouldn’t change from Phoenix to Shanghai.” —John Croft
Gillette: Outsource? Of Course!
Honeywell Aerospace’s new President and CEO, Rob Gillette, says investors can expect to see an offshore shift in the company’s revenues over the next five years, as he attempts to “put production capability and know-how in the same time zone” as the customer. Gillette says 63% of the company’s revenue, which totaled about $9.7 billion last year, came from the U.S. The outsourcing will include products in the commercial, business aviation and general aviation product lines, as well as non-aviation related areas.
The shift is underway in India already. Gillette says Honeywell currently has 1,200 engineers and programmers at work in that country writing software code for avionics products. Growth in India, he says, will include more sourcing for Honeywell’s automotive and automation control systems products. “What we can make outside of the U.S., within restrictions, we will,” he says. —John Croft |
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