So That Happened: New Leader at VW of America, Could Honeywell Become a 'Former' Conglomerate?
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For Honeywell, Breaking Up May Be Getting Easier To Do
Is Honeywell International Inc. on its way to being the next General Electric Co.?
Arguing that Honeywell’s conglomerate structure no longer serves its purpose, the leaders of Elliott Investment Management LP have called for the company’s directors to separate its aerospace and automation divisions so they can be more focused and stake a clearer claim to higher valuations.
The Elliott team, which has also been making waves of late at Southwest Airlines and Tokyo Gas, has spent $5 billion building a Honeywell stake and says it’s impressed with the company’s “collection of best-in-class businesses,” the aerospace group foremost among them. But they say the holding company’s structure spanning about 700 sites in 80 countries has become unwieldy and detrimental to its prospects for success.
“The industrials landscape is rife with recent successful examples of former conglomerates that improved performance, enhanced valuation and generated immense shareholder returns through separation,” Elliott’s managers wrote in a recent open letter to Honeywell directors.
Those board members and CEO Vimal Kapur are on the same page, broadly speaking. They announced early last month that they plan to spin off Honeywell’s advanced materials segment, which will ring up about $3.8 billion in annual sales this year. And they responded to Elliott’s public overture by saying they’re open to talks about further “optimizing the portfolio.”
Driving enthusiasm from Elliott and other investment managers calling for divestitures is the result of other recent overhauls. Perhaps most notable among them—both in scope and in terms of catalyzing a valuation boost—has been GE’s split: Prior to the announcement three years ago that the holding company would spin out its energy and healthcare businesses, GE was worth about $80 billion in investors’ eyes. After the split, the market’s solid run up and lots of work to slim down, GE Aerospace alone is now being valued at more than $190 billion. GE Vernova and GE HealthCare Technologies are worth about $95 billion and $38 billion, respectively.
In other words, there will be more where Elliott came from.
—Geert De Lombaerde
Don’t Miss This Anniversary!
Bring out the party hats, because we’re right in the middle of National Apprenticeship Week (NAW) 2024, and this year marks a decade of celebrating skilled workforce initiatives. More specifically, this year’s theme is “Celebrating 10 Years of Engagement, Expansion and Innovation.”
NAW inspires employers, industry representatives, educational institutions, government agencies and other organizations to host events showing how Registered Apprenticeships are a reliable step on the path to a successful career and crucial in creating skilled talent for the future workforce. Over the last decade, NAW has held over 9,960 events with over 1,400,000 attendees.
This year, NAW is featuring over 2,200 events and proclamations across the country. Events can include apprenticeship graduations, signing ceremonies, open houses, career fairs, virtual events and more.
According to ApprenticeshipUSA, each weekday has a specific theme:
- Monday: Youth and Young Adult Apprenticeship Day
- Tuesday: Registered Apprenticeship in New and Emerging Industries and Around the Globe
- Wednesday: Expanding Registered Apprenticeship to Underserved Populations
- Thursday: Women in Apprenticeship
- Friday: Federal Apprenticeship and Veterans in Apprenticeship
See NAW in action with the social media hashtags #NAW2024, #DecadeOfNAW and #ApprenticeshipUSA.
—Anna Smith
Solar Company to Build $712 Million Battery Plant in Kentucky
Solar energy manufacturing is booming on the border between Kentucky and Indiana. Canadian Solar, a Canadian solar power company, announced late last week that it would build a $712 million battery plant in Shelby County, Kentucky, just outside Louisville. The site, built in two phases, will be located just across the Ohio River from Canadian Solar’s planned solar photovoltaic cell plant in Jeffersonville, Indiana.
According to the Louisville Courier-Journal, which broke the story, the Shelbyville Battery Manufacturing plant will build battery cells for storing energy retrieved from solar panels, unlike other electric vehicle battery plants also under construction in the state. The Courier-Journal reports the company will hire 1,600 employees within its first three years.
Canadian Solar founder Shawn Qu and Kentucky Governor Andy Beshear said the move was a play for Kentucky to be a significant regional play. “Electricity demand in the United States is expected to grow significantly,” Qu said. “This project is putting Kentucky at the center of the effort to build a robust and secure electricity grid.”
—Ryan Secard
New Faces Take the Wheel at VW Group of America
Pablo Di Si is out as CEO of Volkswagen Group of America and Volkswagen Brand North American Region after slightly more than two years at the helm. Stepping into the role, effective Dec. 12, is longtime automotive industry executive Kjell Gruner, who most recently served as chief commercial officer at EV manufacturer Rivian before stepping down in June. Among previous positions, he’s also served as president and CEO of Porsche Cars North America.
Gerrit Spengler, who is chief human resource officer at Volkswagen Group of America, will serve as interim CEO until Gruner steps in, according to parent company Volkswagen AG, who shared the management changes Nov. 19.
The German automaker said Di Si elected to step down last week, and in a LinkedIn post, the former CEO wrote, “I've decided a time ago that it's time for a well-deserved wellness break and to spend more time with my family, friends and focus other business passions I have.”
Rumors recently have floated that Di Si would soon exit the company, with Germany’s Spiegel writing in early November that “top North American executive for the second-largest automobile company in the world is likely on his way out.” Di Si’s task as CEO was monumental, the news provider said: “He was to use the shift to electric cars as a springboard to making Volkswagen a relevant player in North America.”
Volkswagen’s share of the U.S. market hovered around 4% in 2023, according to Statista data.
All that said, deliveries of Volkswagen branded vehicles in North America grew by 7% in the first nine months of 2024, to 769,000, according to Volkswagen. Growth in the U.S. during the same time was more subdued at 1.5%.
—Jill Jusko
Ford Customer Records Allegedly Hacked
The cybersecurity press often learns about new data breaches when cybercriminals put stolen data on the market, which is what happened this past Sunday. BleepingComputer yesterday reported that 44,000 Ford customer records, that include full names, dealer information and purchase locations among other data, were put up for sale online on Nov. 17 by a threat actor called EnergyWeaponUser.
The data seems relatively worthless considering the purchase price of around $2.
“Ford is a big name on EnergyWeaponUser's list of victims, but right now it doesn't appear that they stole anything especially sensitive. The data apparently just contains contact details about Ford dealerships, most of which are already public,” says Paul Bischoff, consumer privacy advocate at cybersecurity firm Comparitech.
EnergyWeaponUser, reports BleepingComputer, in the recent past breached Cisco, Nokia, Europol and T-Mobile through web portals and third parties. And it seems as though third-party cybersecurity was the root of the problem this time, as well. Ford says none of its own systems or customer data were breached and a third-party supplier was involved.
“Luckily, it appears that the data breach gleaned information about Ford's dealership network, not the end customers that are purchasing the vehicles (either that or Ford has had a really lousy sales year with only 44,000 cars sold),” says Chris Hauk, consumer privacy champion at cybersecurity firm Pixel Privacy.
It seems like the only real value of the stolen data is use as ammunition for future attacks.
“Any stolen confidential information, like purchasing habits, is something that can be used in a targeted spear phishing attack to trick more potential victims. So, you can't completely discount any data breach no matter how innocuous it first seems. With that said, out of every data breach I've heard about in my 36-year career, this ranks very close to the bottom of my concerns. If it is what the hackers are saying it is — information from a public database — there's not too much to be concerned with. Still, Ford needs to give the impacted victims an update on what was stolen and what to be on the lookout for (i.e., spear phishing attacks),” says Roger Grimes, data-driven defense evangelist from cybersecurity firm KnowBe4.
—Dennis Scimeca
Keeping Deals on the Down Low
Speaking of M&A and what’s working in the market these days: The recent Baird Global Industrial Conference held in Chicago on several occasions brought to light the idea that a growing number of deals are being shaped and consummated via a quieter, more direct process rather than a broad shopping excursion.
Speaking to investors Nov. 13, Dover Corp. Chairman, President and CEO Rich Tobin said his team will continue to lean heavily on its trusted model of finding acquisition targets on its own rather than having a bunch of investment-banking meetings and then competing more openly with peers on deals. The stock market’s upswing of the past two years, he said, has lifted valuations to the point where more companies are likely to come to market soon, especially if they’re owned by private-equity firms looking for exits for their investors.
But that doesn’t mean Dover will get more aggressive and swim over to that part of the pool.
“We’re likely to do a lot more smaller private deals than we are taking big swings at auctioned assets, which just tend to attract valuations that are sometimes prohibitive,” Tobin said.
That comment was echoed a day later at the Baird conference by members of a panel discussing manufacturing M&A more broadly. A key factor in that has been the rough macro environment for several parts of the factory sector. That, panelists said, has resulted in “uneven” performance at many companies that have made it far trickier for those PE players to secure a price they’ll accept. One solution: More unsolicited approaches from opportunistic buyers and direct deals that don’t cost as much or take as much time. Even in M&A, discretion can be the better part of valor.
—Geert De Lombaerde
