In 2002, David M. Cote was named Chairman and CEO of Honeywell. Under
his leadership the company focuses on five key initiatives: Growth,
Productivity, Cash, People and the company's Enablers - Honeywell
Operating System, Velocity Product Development™ and Functional
Transformation.
During Cote's tenure, Honeywell has delivered strong performance in
sales growth, earnings per share, segment profit and cash flow. Today,
the company has great positions in good industries globally with
approximately 50% of its products and solutions providing energy
efficiency benefits.
125 Years of Innovation
Honeywell can trace its roots back to 1885, when an inventor named
Albert Butz patented the furnace regulator and alarm. He formed the Butz
Thermo-Electric Regulator Co., Minneapolis, on April 23, 1886, and a
few weeks later invented a simple, yet ingenious device that he called
the "damper flapper."
Here's how it worked. When a room cooled below a predetermined
temperature, a thermostat closed the circuit and energized an armature.
This pulled the stop from the motor gears, allowing a crank attached to
the main motor shaft to turn one-half revolution. A chain connected to
the crank opened the furnace's air damper to let in air. This made the
fire burn hotter. When the temperature rose to the preset level, the
thermostat signaled the motor to turn another half revolution, closing
the damper and damping the fire. The temperature correction was
automatic. Over the years, many Honeywell products have been based upon
similar, but more complicated closed-loop systems.
The Consolidated Temperature Controlling Co. incorporated, acquired
Butz's patents and business, and by 1893, had renamed itself Electric
Heat Regulator Co. The first company ads ran in 1895 featuring the now
famous thermostat. In 1898, the company was purchased by W. R. Sweatt,
who, by 1916, had changed the name of the company to Minneapolis Heat
Regulator Company, expanded its product line and patented the first
electric motor approved by Underwriters Laboratories.
Meanwhile, in Wabash, Indiana...
In 1904, a young engineer named Mark Honeywell was perfecting the
heat generator as part of his plumbing and heating business. Two years
later, he formed the Honeywell Heating Specialty Co. Incorporated,
specializing in hot water heat generators.
By 1912, EHR had expanded its product line and changed its name to
Minneapolis Heat Regulator Company (MHR). Four years later, MHR patented
the first electric motor approved by Underwriters Laboratories.
The 1927 Merger
In 1927, Minneapolis Heat Regulator Company and Honeywell Heating
Specialty Co. merged to form the Minneapolis-Honeywell Regulator Co.,
and became the largest producer of high-quality jeweled clocks. W. R.
Sweatt became Chairman and Mark Honeywell became President. The company
made several acquisitions in the controls area. One of those
acquisitions was the Brown Instrument Co., a worldwide leader in the
field of industrial controls and indicators.
Business Around the World
Minneapolis-Honeywell Regulator Co. had long been selling its
products around the world through distributors such as Yamatake Trading
Company in Japan. In 1934, the company acquired Time-O-Stat Controls
Corporation and began a long history of global expansion. The first
office outside the U.S. was established in Toronto, Canada. Its first
European subsidiary was established in the Netherlands the same year,
and, within a few years, offices were opened in London and Stockholm. By
1941, The company had distributors in Chile, Panama, Trinidad, New
Zealand, Argentina, and South Africa. By 1972, it operated 25
wholly-owned subsidiaries, 142 branch offices, and joint ventures in
five countries outside the U.S. In 1993, the company opened affiliates
in Abu Dhabi, China, Oman, Romania, and the Ukraine. By 1998, the
company had operations in 95 countries through 83 wholly-owned
subsidiaries and 13 joint ventures.
Products, Developments and Acquisitions
Minneapolis-Honeywell Regulator Co. leveraged its scientific and
engineering talent to transform itself and adapt to changing times. Mass
production was perfected and an array of aeronautical equipment
broadened the company's product portfolio. In 1942, the company invented
the electronic autopilot, which proved to be critically important to
the U.S. war effort.
In 1953, the company introduced the T-86 "Round" thermostat, which
replaced chunky, rectangular models. One of the world's most
recognizable designs, it remains in production today and adorns the
walls of more households around the world than any other thermostat.
In 1954, the company acquired Doelcam Corp., a maker of gyroscopes.
Over the next two decades, the company constantly improved gyroscopes,
making them more sensitive and precise while reducing their size and
weight.
In 1955, a joint venture called Datamatic Corporation was established
with Raytheon Corp. marking Honeywell's entry into the computer
business. The company's first computer system, the D-1000, weighed 25
tons, took up 6,000 square feet, and cost $1.5 million.
In 1957, Minneapolis-Honeywell Regulator Co. purchased a fire
detection and alarm firm, the first of many acquisitions that would
build its security business into today's global leader. In many North
American cities, the red and black "Protected by Honeywell" window
stickers and placards became nearly as recognizable as the “Round”
thermostat.
Raytheon's interest in the computer venture was bought out in 1960
and the business name changed to Electronic Data Processing (EDP). The
company's name was officially changed to Honeywell Inc. in 1963, even
though it had been casually referred to as such for nearly 40 years. Six
years later, Honeywell instruments helped U.S. astronauts Neil
Armstrong and Edwin "Buzz" Aldrin land on the moon.
In 1970, Honeywell merged its computer business with General
Electric's to form Honeywell Information Systems, which performed well
in mainframe markets. In 1986, the personal computer emerged and the
company formed Honeywell Bull, a global joint venture with Compagnie des
Machines Bull of France and NEC Corporation of Japan. Its ownership
level was gradually decreased until, in 1991, Honeywell was no longer in
the computer business. The company’s digital computer knowledge was
then applied to its traditional field of automation control, integrating
sensors, and activators.
In 1986, Honeywell significantly enhanced its position in the
aerospace industry with the purchase of Sperry Aerospace, making
Honeywell the world's leading integrator of avionics systems. Sperry
contributed flight controls, space vehicles, and the first FAA-certified
wind shear warning system.
The AlliedSignal Connection
During World War I, Germany controlled much of the world's chemical
industry, causing shortages of such commodities as dyes and drugs. In
response, in 1920 Washington Post publisher Eugene Meyer and scientist
William Nichols formed the Allied Chemical & Dye Corporation as an
amalgamation of five American chemical companies.
In 1928, Allied opened a synthetic ammonia plant near Hopewell, Virginia, becoming the world's leading producer
of ammonia.
This was the company's earliest venture into new markets. After World
War II, Allied began manufacturing other new products, including nylon 6
(used in manufacturing everything from tires to clothes) and
refrigerants. In 1958, the company became Allied Chemical Corp. and
moved its current corporate headquarters to Morristown, New Jersey.
In 1962, Allied bought Union Texas Natural Gas, which owned oil and
gas properties throughout the Americas. Allied regarded it mainly as a
supplier of raw materials for its chemical products, but this changed in
the early 1970s when CEO John Connor (secretary of commerce under
Lyndon Johnson) sold many of Allied's unprofitable businesses and
invested in oil and gas exploration. By 1979, when Edward Hennessy Jr.
became CEO, Union Texas produced 80% of Allied's income.
Under its new name, Allied Corp. (1981), the company went on to
purchase the Bendix Corp., an aerospace and automotive company, in 1983.
By 1984, Bendix generated 50% of Allied's income, while oil and gas
generated 38%.
In 1985, Allied merged with the Signal Companies, adding critical
mass to its aerospace, automotive and engineered materials businesses.
Founded by Sam Mosher in 1922 as the Signal Gasoline Company, Signal was
originally a California company that produced gasoline from natural
gas. In 1928, the company changed its name to Signal Oil & Gas,
entering into oil production the same year. Signal merged with the
Garrett Corporation, a Los Angeles-based aerospace company, and in 1968
adopted the Signal Companies as its corporate name.
The addition of Signal's Garrett division to Bendix made aerospace
Allied-Signal's largest business sector. In 1985, the company sold 50%
of Union Texas, and in 1986 it divested 35 non-strategic businesses
through the formation and spin-off of The Henley Group, Inc.
In mid-1991, with a new CEO, Lawrence A. Bossidy, and new leadership
in many key businesses, Allied-Signal began a comprehensive program of
transformation. Bold actions were taken to improve cash flow and
operating margins, to increase productivity, and to position the company
as a global competitive force for the years ahead. The Allied-Signal
name was changed to AlliedSignal in 1993 to reinforce a one-company
image and signify the full integration of all of its businesses.
In 1992, the company sold its remaining interest in Union Texas through a public offering for $940 million in net proceeds.
Throughout the 1990s, Lawrence A. Bossidy led a growth and
productivity transformation that quintupled the market value of
AlliedSignal shares and significantly outperformed the Dow Jones
Industrial Average and the S&P 500.