Is it fire sale time? Coupled with the drive to be only Industrial SW, the VRIFs and RIFs, could this be the beginning step to wrap a big bow around the D&S business pimpin for a sale?
Odd that MM had to be explicit - "I do want to take this opportunity to be very clear... and not to reduce our census or personnel costs."
What do you mean with your statement? Wouldn’t D&S as a standalone make it more transparent rather than opaque?
Aero can’t ship products on time to their only customer that is not cancelling orders: The Department of Defense. The DOD is starting to see through the smoke screen so MM is adding more smoke. Competitors are crawling through broken glass to win this work. Not good.
What is puzzling is how they continue to add Sr Mgmt at the same time they RIF us poor worker bees. It's Dilbert on steroids. Really don't get their justification for this. Good ole boys network, i guess.....
Same for us. I'm in an aftermarket sales group and all we hear is:
*How much are we committing to shipping this week?
*Why is almost every customer on credit hold?
*We just got another plug from m@d$en - we need an additional $5M on top of our existing commitment
*Whatever you did yesterday isn't good enough, do MORE!!!!
This is literally what we hear. Usually I just tune it out and wait for the next furlough or RIF announcement.
@2hex.... Being short on $ at Honeywell is an understatement! We are so behind in past-dues, its beyond comprehension. Some defense products we have been building for decades is a 52-week lead-time inside our own factory. Developmental program have to get in Queue for material allocation if revenue is a priority internally. It is only getting worse!!!
I sit through a couple morning production meetings. Theme is - what are we shipping today & what is it worth, in $. Every product line, finished goods and spares, you state your $ and they ask if there is any way to get more $ out the door today. Leaders seem to be looking for $ by the hour. Everyday, let's all try to pull the rabbit out of the hat. Have never seen so much concern on daily $ being pushed down right to the shop floor workers. This is the current Honeywell I see. No direction, no planning, definitely no help. Point is, it seems corporate saying show me the money and we seem to be short.
The Not T Mahoney post nailed it. Guarantee Darius called out MM and told him give to drive revenue quickly or else..... You’ll see leadership panic next followed by Supplier finance bartering. It will be a rocky road.
Key point 1:
Will Finance align with D&S goals by nurturing Supplier relationships with regards to pricing and Net Payment terms? I bet, NO.
Key point 2:
For a fact, Suppliers went through 40-60% layoffs and furloughs. If Finance can’t change their terms, we won’t get their business or Suppliers will close shop.
Key point 3:
The mo–ns who think we can bring manufacturing of many parts back to Honeywell are uneducated in two ways; the machines/people don’t exist and aerospace hardware is under FAA and EASA regulations. Meaning, you can’t make flyable without certification.
Solution:
D&S needs full authority to build Supplier relationships to include finance.
This is survival move. Commercial is dead for about 2 years; example from Delta Airlines CEO, “airlines will recovery 1 year after other segments. The recovery hasn’t started yet.” This comment was in July. If airlines start recovering in 2021 summer, Honeywell Aero won’t pick up till 2022. Hence, D&S SBU where the revenue persists regardless of this slump.
DA hated the CBT structure and wanted the business wrapped around products, going back to the pre-Apple days of 2005. Zero commitment to customers. Zero commitment to employees. Zero commitment to the business. I'm betting on positioning for spin off or sale. A party change after the election means D&S tanks.
Why wouldn't you focus on an area of strength? The key will be the right leader who has the ability to convince mad dog of the long game vs the week, month, and quarter..... This is actually a very smart play unless of course its the wrapping paper on a gift to a willing buyer.....
My thoughts... This is a move to pump up revenue due to slowing/reduction of commercial aviation sales. REVCOGs, particularly defense and space, allow for HUGE labor rates to be extended to the customer, especially on cost plus programs. HW in general takes engineers hourly rate and triples/quadruples that hourly rate and charges the customer. Its a money making scheme. For the past 10 years, from what i heard, sites like Clearwater & Glendale and other Defense/Space plants have contributed greatly to Revenue. CLW has contributed to 65% of Aero revenue. Hence this push to bring in the money. But its nothing new. If my memory serves me right we had D&S SBU 6 to 7 years back. Either way, nothing will change except, engineering and ISC will be pushed towards Defense and Space programs. More and more metrics and other garbage with time charging and etc...
I am not an expert on corporate doings by any means, but this seem just like another step toward the eventual selling off of Aero.
Given defense is the only game in town. I doubt it. Shuffling the papers to sort red and green programs.