Bu the time Darius takes over, it may be too late to do anything to mend fences with suppliers and to boost morale. The exodus of talented employees from Honeywell has already begun.
Honeywell's stock price is inflated by the fact Cote is "supposedly" running a tight ship. If the only way to organic growth is buying other companies, and the morale of the workers is lower then whale doo doo, there is an underlying cause for alarm as the stock price can't stay high for too long for these reasons.
Having a company grow means it shows profit and success in its business enviorment. If all a company can do to show growth is by buying other companies and adding their profits to their bottom line, then this isn't true growth. Maybe its time Honeywell's shareholders demand new management, or a breakup of the company.
Northrup could buy Honeywell for the aerospace part of the business and sell the transportation end of the business to the likes of Borg-Warner which already makes automotive turbochargers. Performance Materials could be sold to Ametek. UOP could be sold to Exxon. The thermostat business could be sold to a China based company.
The present way to organic growth at Honeywell involves two things: Buying other companies and getting rid of existing employees. This is the only way that he present management of this company can show growth while real revenue declines. Employee morale suffers and the most talented people leave the company. Of course bringing in people on temp visas and paying them less is also a way to organic growth
I worked at the Honeywell Torrance Facility. Our department worked 7 days a week for what seemed like forever. Add to that a very arrogant manager and a 25 cent an hour raise, the first in 2 years, and one can see why morale is low. Add to that the change in medical care which cost us more then the 25 cent an hour raise was worth and you can se why employees are sick of the way Honeywell is being run.
Honeywell's organic growth is a sham. A company grows by innovation, not by eliminating people who work to create real organic growth.
More employee cuts on the way to satisfy shareholder equity. Got to get that organic growth somehow.
Sentiment: Strong Sell
Honeywell is trying t buy organic growth by purchasing "strong" business. The company should concentrate more on its core businesses and invest the money being spent on new companies into new technology and firming up the bottom lines of its existing businesses by eliminating redundant mangers and cutting the use use of charts and graphs that deteraine quality and production goals.
Better for Honeywell to invest the money for M&A into new product development. Buying other companies could drag down earnings overall if these new companies don't perform as expected.