On the record with
MIKE SMITH, PRESIDENT AND CEO, AEROSPACE ELECTRONICS SYSTEMS,
HONEYWELL AEROSPACE

Honeywell Did Merger for 'Right Reasons'

Honeywell Aerospace Electronics president Mike Smith.

When awarding marks to the merger process that led to today's Honeywell Aerospace, Mike Smith, president and CEO of Aerospace Electronics Systems unreservedly gives it an A++. He backs this up with the observation, "Things have gone well because we did everything for the right reasons, and it all made sense to everyone.
"After we got the nod from the regulators, we assembled together a team of 400 to 500 people in Phoenix to do all the technical, production and functional planning. We took the senior leadership that was already active in the electronics business and we split the new jobs 50:50. This allowed good things to go on."

He also expects good things to keep going on and, now that the dust has settled around the new company, Smith believes Honeywell will soon be back on the acquisition trail. "We definitely have a strategy for both organic growth and expansion through acquisition. Right now we are coming out of the mandatory 'pooling period', where we have to consolidate the major merger and are not allowed to indulge in further acquisitions. However, we are now looking at strategic acquisitions across the aerospace sector as the year goes on, and I expect to see additional expansion through acquisition.

"We already have a good portfolio in the electronics sector, but there are still a few niches to fill. However, I think the important moves will come in the information technology sector. Our AVIENT (aviation enterprise) section is getting more and more involved in 'off airplane things', with pretty good plans for what comes next. There are several acquisition opportunities in this area that we are looking at.

Honeywell scored a significant victory in supplying the Primus Epic system for the new AB139.

"You will hear a lot about the Epic system at NBAA," he noted. "The ideas and architecture it incorporates are right on the mark in terms of what customers want. We are redefining avionics by integrating utility control and display functions into an avionics system, and at NBAA we are announcing some new platforms for Epic, as upgrades to existing equipment fits."

Smith continued, "In the next level of integrated electronics and engines and systems, customers will be asking us to take on a much broader role-and we can do it. There are new aircraft coming and decisions are being made by those manufacturers to have Honeywell as the integrated provider for electrical, propulsion and other systems. We will be taking on a much bigger role than we've had before.

"We will also be covering all divisions of the market, and soon we expect to be migrating our systems capability to the lower end of the market. We will be working with smaller aircraft and bringing modern integrated systems to those OEMs. We will be maintaining the Bendix/King brand name-alone among all the other Honeywell divisions-because it has such a high-profile reputation for excellence.

"We have work going on with all the major U.S. and European general aviation manufacturers to introduce contemporary technology into their displays and controls. This will provide invaluable integration at a low cost level that makes sense. Their cockpit designs have always been very federated, but now we are moving to provide the same sort of integration we do for our business aviation and regional aircraft customers."

By Robert Hewson