Global Fastener News

Layoffs and Internet in Welch’es Plans For Honeywell as Part of GE

John Wolz

General Electric Company CEO Jack Welch predicts GE will cut $1 billion in costs to make its $54 billion acquisition of Honeywell International Inc. profitable in 2001.
Honeywell is the parent company of aerospace fastener distributor TriStar Aerospace and Banner Aerospace.\
�It�s my credibility,� Welch said in a conference call with reporters. �I�ve been doing it for 20 years.�
Welch is delaying retirement for a year to oversee the process of bringing Honeywell into GE.
GE’s Honeywell acquisition is listed among the Top Ten Deals of 2000 worldwide.
Welch said GE officials have identified ways to boost Honeywell�s profitability through personnel cutbacks and introduction of GE�s Internet and operating systems.
Analysts predict significant layoffs at Honeywell, but Welch declined to discuss details. Honeywell has more than 125,000 employees worldwide.
Fairfield, CT-based GE uses the Internet for purchasing and sales and currently has about $11 billion of annual sales on the web. Welch said Honeywell has �barely scratched that surface� of e-commerce.
GE, which has a wide range of businesses from airplane engines to the NBC television network, estimates its Internet-use savings at 6%, compared with Honeywell�s 2%. Welch estimated 30% of GE�s purchases come through Internet-based auctions.
Morris Township, NJ-based Honeywell is still blending its management styles and procedures after its 1999 acquisition of AlliedSignal Inc.
There will be no blending of GE and Honeywell, Welch said. �There�s no culture discussion,� he explained. �It�s a GE culture. This is not a merger of equals.�
Argus Research analyst James Kelleher ventured that Welch will succeed in cutting costs at Honeywell. �When he compels subordinates to deliver savings, they�ll beat the devil to do so,� Kelleher observed.
Though Welch is anticipating the acquisition will be completed during the first quarter of 2001, it is pending review by U.S. and European regulators, which could delay the closing.
From Maple Leaf to GE
Maple Leaf Aerospace was once a small fastener company. It eventually became Dallas-based TriStar Aerospace and a major distributor of aerospace fasteners, fastening systems and related hardware.
TriStar, with annual sales of about $200 million, went public in April 1998 with 13 million shares selling at $16 each. The next year AlliedSignal acquired TriStar for $9.50 per share.
AlliedSignal had acquired Banner Aerospace Inc. in 1998.
At the end of 1999 AlliedSignal changed its name to Honeywell International.
Honeywell is a global supplier of aircraft components and repair services and a manufacturer of control equipment, specialty chemicals and car care products.