The CEO of United Technologies says they are breaking UTC up into three independent companies because it’s the right thing to do. “There’s no weak sister here,” says Greg Hayes, United Technologies chairman, and CEO. “This is not a spin to get rid of something that doesn’t fit, doesn’t belong. We’re doing this because we think it’s the right thing for our employees, for our customers, and for the shareowners.”
We Don’t Get Paid for the Diversity the Way We Used To
We can go back and look at any one point in history and say the commercial businesses have outperformed the aero business and over time we always said balance works at UTC. I would tell you that as I’ve gone out and spoken to all of our investors over the last year there is almost unanimity that the businesses would perform better as separate focused businesses. Frankly, we don’t get paid for the diversity and for the benefit of consistent earnings the way we did ten years ago.
Investors Have Told Us… Let Us diversify
What the investors have told us is, let us diversify, if we want to be in aero stock we’ll buy aero stock, if we want to buy a commercial HVAC business we’ll buy commercial HVAC. UTC is so big, and I would tell you complicated because of the different markets that we operate in and different cycles that our businesses go through, it just will be so much simpler for people to think each companies story.
There’s No Weak Sister Here
What is the story around Otis Elevator and the two million elevators that we service every day around the world? What about the Carrier business? Over a hundred million air conditioners installed in the US, we’re going to service those and we’re going to replace those over the next ten years. That’s phenomenal growth. The aerospace business standalone today with Rockwell, $50 billion in revenue. There’s no weak sister here. This is not a spin to get rid of something that doesn’t fit, doesn’t belong. We’re doing this because we think it’s the right thing for our employees, for our customers, and for the shareowners.