Challenge for Honeywell's New CEO: Keep Up the Winning Streak

By Thomas Gryta Features Dow Jones Newswires

MORRIS PLAINS, N.J. -- Darius Adamczyk was working at General Electric Co. in the 1990s when he realized there was more to life than devising algorithms for military programs.

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"I really didn't see myself as an engineer 30 years from where I was at that point," he said in an interview earlier this month. "I kind of wanted to have a little more interaction with people on a day-to-day basis."

Now as the chief executive of Honeywell International Inc., the 51-year-old is deep in discussions with employees, customers and investors as he evaluates the sprawling conglomerate, including if it should remain whole.

In the job since late March, he succeeded his mentor, Dave Cote, who pulled off a turnaround at Honeywell, increasing its market value five-fold during his 14-year tenure and expanding the company through acquisitions so that it now makes everything from jet engines to thermostats. Its stock is up 19% so far this year, while shares of larger rival GE are down 23%.

Mr. Cote remains Honeywell's chairman through April, and Mr. Adamczyk is intent on continuing his winning streak.

"If this was all Dave, then we didn't build something that's sustainable, " he said.

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Born in Poland, Mr. Adamczyk was 11 when he immigrated with his family to the U.S. An only child who didn't speak English, he picked up the language in about six months after they settled in Grand Rapids, Mich. He went on to study electrical and computer engineering at Michigan State University before joining GE as an electrical engineer. While there, he earned a master's degree in the field from Syracuse University.

After GE, he attended Harvard Business School, then spent four years at consulting firm Booz Allen Hamilton, followed by stints at industrial manufacturer Ingersoll-Rand PLC and scanning- and data-software firm Metrologic. Honeywell bought Metrologic in 2008, and Mr. Adamczyk, its CEO, joined Honeywell's executive team.

Mr. Cote admired Mr. Adamczyk's immigrant roots, educational achievements and professional ascent and took the younger executive under his wing. Mr. Adamczyk, though three levels lower in the corporate hierarchy, told Mr. Cote that he would like to get back to the helm one day.

Mr. Cote's advice: Excel in the role you're in and make sure you are visible in the company.

According to the former CEO, succession planning at Honeywell began about 10 years ago and grew more intense over the years. The process included placing prospects into big, challenging jobs to see how they performed.

"Darius emerged as the clear-cut choice to become CEO," Mr. Cote said. The two men have worked alongside each other over the past year, with Mr. Adamczyk gradually taking on more responsibilities.

Metrologic founder C. Harry Knowles remembers Mr. Adamczyk, who joined the company in 2006 when a group of investors bought it for $440 million, as willing to make the tough decisions necessary during a trying time where it was preparing itself to be resold.

Mr. Adamczyk settled lawsuits, cut costs and streamlined its operations, a restructuring that Mr. Knowles said "emotionally I couldn't do...but it was the right thing to do." Honeywell bought Metrologic about 18 months later for about $720 million, a 64% gain from the earlier deal.

Mr. Adamczyk is taking a similar approach to Honeywell, evaluating where its 17 business units should be in 10 to 15 years with an eye toward burgeoning fields such as e-commerce and clean energy.

"It has to be through logic and objective," he said. "I don't want to get attached to any business, anything that's through emotion."

Mr. Adamczyk is contending with whether it even makes sense to be a conglomerate -- though he stressed that the structure has worked well for Honeywell -- as companies are under pressure to focus on core competencies and hive off the rest. He is also keeping an eye on the increasing role of technology at industrial firms.

"The way we're going to continue to differentiate ourselves versus other industry players, whether it's aerospace or any other industry we happen to be in, is by technology," he said. "It won't necessarily be by scale."

When it comes to the aerospace sector, Wall Street is paying close attention to scale. Honeywell rival United Technologies Corp. agreed to buy another parts maker, Rockwell Collins Inc., for $23 billion this month. Activist investor Third Point is pushing Honeywell to spin off its own aerospace unit.

Mr. Adamczyk has met with Third Point but declined to comment on the Rockwell Collins deal or any coming strategic moves, saying Honeywell will disclose its plans in October. Its finance chief, Tom Szlosek, said last week that Honeywell is likely to make some moves around the portfolio to "narrow the focus and not be too spread out."

A Third Point spokeswoman declined to comment.

One possibility for future investment is in the warehouse automation used by companies like Amazon.com Inc. and United Parcel Service Inc. Honeywell agreed to buy privately held Intelligrated for $1.5 billion in 2016 and sees room for growth there.

"It's certainly a segment that's interesting," Mr. Adamczyk said. "It's a clear example of the kinds of businesses that we have in mind."

Write to Thomas Gryta at thomas.gryta@wsj.com

(END) Dow Jones Newswires

September 25, 2017 07:14 ET (11:14 GMT)