HONEYWELL CEO: 'This feels a lot different than it did in 2001 or 2008'
(Jason Reed/Reuters)
Honeywell CEO Dave Cote.
Fear of a looming recession has begun to build in the past few weeks, and bearish onlookers are worried about disappointment in areas as varied as manufacturing contracting and the housing market.
The CEO of the multinational conglomerate Honeywell, however, thinks that while the world has slowed down, it's not about to slip into the bad times.
"At least from my perspective, it feels like markets really think there is a chance of a recession here," CEO Dave Cote said Friday in a quarterly conference call.
"And I guess while there is always the chance if there were some un-forward terrorist events somewhere or something drastic like that, I really don't see that. This feels a lot different than it did in 2001 or 2008 to me, just because after a great recession we've never really had a recovery."
To Cote, part of people's concern is that there hasn't been a strong comeback from the depths of the global financial crisis.
"2010 was the only real recovery year that we had," he said. "After that it's really been the slow growth environment, and I think that's kind of what we can expect over the next two or three years in the just way we ought to think about things, so I don't see boom coming, but by the same token I don't see a crash coming."
Additionally, Cote thinks the economy is better positioned if the slowdown persists.
"If you look at like debt position of the, say, just the American consumer back then versus today, very different —bank capability, bank reserve, they're very different than what we're dealing with today," Cote said in the call.
Honeywell, which makes products as diverse as room humidifiers and airplane auxiliary power units, has been affected by the slow growth environment. The company delivered better-than-expected earnings in its third quarter but missed on its sales target, bringing in $9.61 billion against expectations of $9.85 billion and down from $10.11 billion in third quarter of last year.
Cote argues that the economic situation will separate the wheat from the chaff in the market.
"And I really think that the ability to perform in that kind of slow-growth environment is what's going to differentiate companies and that's the way we're playing that's the way we're thinking about things," he said.
Cote, however, did admit that he could be wrong.
"When it comes to how do we perform versus the five-year plan, who knows what the economy does in 2017 and 2018?" Cote said. "As I oftentimes say, the future has this odd way of unfolding differently than all of us predict, and while I am predicting slow growth right now, there is a chance it could go the other way around. I don't see a recession; however, there is a chance that this could just become something a lot better."
So despite his prediction, Cote is just like the rest of us, waiting to see what's around the corner.
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