Go ahead, prove me wrong on this...
12 replies (most recent on top)
@10FCiehl-7tlw,
This reminds me of the TV show the " Adams Family". When Gomez Adam's was asked, what was the secret to his success in building his fortune? His reply simply was "By running every company I own into the ground" Hmmm, seems like some thought though this was a management training class rather than comedy show... on second thought perhaps it was. :-)!
I have always figured Darius - and his overcompensated cronies - would run off before it all comes crashing down. Their destructive handiwork. The only goal was their personal enrichment with no plans or care about what happens in the long term.
Honeywell executive leadership knows exactly what they're doing, and they are doing it extremely well. That is HARVESTING its product lines. Minimum investment, squeeze everything they can out of existing products. Cut the bottom line. Except for a bare minimum few "core" programs and M&As, there is no top line growth.
Honeywell is following the same trajectory as GE. Talk sh– all you want, but the reality is Dave Cote literally made out like a bandit. He came in when the company was growing and times were good. He "weathered" the bad times (2008) and then cashed out and left during the harvest years. And then Dave set up a fall guy - Darius Adamczyk. Just like GE, HON is getting hollowed out from within. Whether Darius will still be there when it all collapses remains to be seen.
If you have good leadership that have a good vision( technologies, products, inovations) of the future, a conglomerate is pretty good way to go, apple, amazon, google, really have brought good vision a leadership for people to buy into.
However, when you have leadership that is focused on stock price, cost cutting and next quarters numbers, what do you expect when the company ultimately fails.
Dave Cote's big push to make Honeywell an aspiration company (as in people would prefer Honeywell products and capabilities over the competition) , failed miserably. why because he already had companies and products under his control that were once aspirational; but his leadership and lack of investment, has eroded these products to last place also run products that no one really wants, just look at the customer surveys to verify.
So in this regard conglomerates that just focus on the stock price will ultimately face a similar fate
like GE, Enron, tyco. I do not see why Honeywell would not have the same outcome, and no amount of HR trolling on this site will change that outcome.
- 1jkb: Here's a Wiki link that shows the list of nearly 90 USA conglomerate companies and if you expand it you can see the conglomerates for the rest of the world. You're comment about conglomerates "It is a universally failed business model" simply is not true.
https://en.wikipedia.org/wiki/List_of_conglomerates#United_States
Please provide the names of any Conglomerate in the history of the world that did not eventually crash? GE, Tyco,, Enron etc were all doing fantastic for decades until whatever accounting gimmickry they had been using to buy/sell companies came crashing down. It is a universally failed business model.
What good is stock price when you are RIF'd?
Do you really think HON can continue to buy back its own stock at this pace? It’s very hard to determine the true value of a stock when the demand is artificially inflated. Such gains are only really valuable if you plan to sell in the near to mid term.
Well analysts are in for big surprise. H can't keep up that pace. Its only a matter of time before the house of cards falls
While I'm not a fan of Honeywell, I disagree that the stock price is not meaningful. Your comment about having a view of the future can be seen at the NASDAQ link with the financial analysts opinions on where HON is going in the next five years. An average annual growth rate of 9.3% is pretty good over the next five years. That is the future, at least for five more years.
https://www.nasdaq.com/symbol/hon/earnings-growth
Here's a copy/paste from the current analysts opinions.
Over the next five years, the analysts that follow this company are expecting it to grow earnings at an average annual rate of 9.28%. This year, analysts are forecasting earnings increase of 1.07% over last year. Analysts expect earnings growth next year of 9.61% over this year's forecasted earnings.
The stock price is not meaningful in this conversation of leadership or direction. Rather show us the technological break throughs that will keep us competitive, show us the major contract wins from that technology, show us the customer supplier satisfaction ratings, that have Honeywell in any other place than last! Is easy to show good financial results and stock price growth when you as dismantling companies you have absorbed. Its another matter to actually have a view of the future where other want to go, and specifically want to go with you. like when Sperry and Garret (and others) where not part of this abomination of a company.
I am an engineer and not a HR troll, in management or in leadership. Here's a breakdown of Honeywell's five year return on HON stock vs. the three major stock indexes as of Aug 22, 2019.
Source: YAHOO! Finance.
S&P 500 (^GSPC): 45%
Dow Jones Industrial Average (^DJI): 54%
NASDAQ Composite (^IXIC): 74%
Honeywell (HON): 78%