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Speaker 1: It is the last day of May. Remember back a

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Speaker 1: couple of weeks ago, the Dow Jones Industrial Average book

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Speaker 1: forty thousand. It's also up sixteen percent over the year.

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Speaker 1: Now one of its major components, though Honeywell makes up

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Speaker 1: about three point four percent of the index, is lagging

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Speaker 1: despite delivering solid numbers every quarter. Romaine and I caught

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Speaker 1: up with its CEO, Vima Kopor, who is celebrating his

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Speaker 1: one year anniversary in the post on Saturday, and we

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Speaker 1: started by asking him there are three businesses, automation, energy

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Speaker 1: and aerospace still fit together.

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Speaker 2: My near time priority is deliver the results. We have

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Speaker 2: an earnings guide. We meet or beat it so that

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Speaker 2: gives us the right to play, continue to evolve our portfolio,

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Speaker 2: but also be open for all the options. I mean,

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Speaker 2: my job as the CEO is make sure that we

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Speaker 2: drive the shareholders earnings. That's that's what they really stand

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Speaker 2: here for. But near term, we have a strong operating system,

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Speaker 2: strong strategy, and I feel convicted we are on the

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Speaker 2: right track.

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Speaker 3: As you know, there are a lot of investors, activists,

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Speaker 3: investors who of course have looked at the model and

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Speaker 3: least in their minds sting they have a better feel

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Speaker 3: for it. I've heard you, I've heard your CFO as

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Speaker 3: well as other executives at Honeywell talk about this idea

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Speaker 3: that you yourself are your own activists investor kind of explain that.

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Speaker 2: It's like you always look at it. Are we creating

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Speaker 2: value collectively? And ask that question frequently enough and don't

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Speaker 2: wait for an activist to show up, Ask that question,

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Speaker 2: present that productivity to the board and see what the

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Speaker 2: answer is, and whatever the answer is, run company towards

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Speaker 2: that versus trying to wait for any other scenario. That's

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Speaker 2: what we really mean. Why we are our own activists.

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Speaker 1: So if you were your own activists and looking at

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Speaker 1: your stock price versus your peers, what would you tell

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Speaker 1: yourself because it's underperformed? And the question for many analysts

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Speaker 1: is for no reason? Because you deliver. You got the margins,

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Speaker 1: you got the growth, you got the earnings, So what.

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Speaker 2: Gives Obviously, I mean, being in this job for a year,

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Speaker 2: it's certainly a disappointment, I would say, But what we

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Speaker 2: are working is to deliver our commitment for this year.

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Speaker 2: And I'm confident that as we delivered our earnings a

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Speaker 2: year progresses will certainly get the valuation, what we are

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Speaker 2: looking forward to.

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Speaker 1: There's also a conversation that the moves that you're doing

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Speaker 1: in terms of divesting some assets that aren't on core

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Speaker 1: and making some acquisitions like you did a carrier for example,

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Speaker 1: almost five billion, they're.

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Speaker 2: Just not enough.

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Speaker 1: They're not sexy enough, they're bolt on. You need like

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Speaker 1: something transformational. When you say to that, I would.

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Speaker 2: Say that, given we have three compelling trends on which

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Speaker 2: we are aligned to, I don't see a need to

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Speaker 2: add one more transformation. That to me is a stretch

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Speaker 2: argument by making it too general. The question remains valid.

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Speaker 2: What's the next big move in automation, what's the mess

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Speaker 2: moo move in aerospace? Absolutely, and that's why I really

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Speaker 2: work every year, every day to make sure that what

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Speaker 2: can we do organically and what can we do inorganically,

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Speaker 2: And you can expect us to do a lot of

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Speaker 2: work towards that as the time passes by this year

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Speaker 2: and next year. I'm excited about in organic opportunities in

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Speaker 2: each of the three spaces, and our pipeline is much

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Speaker 2: stronger than it has ever been before, and I do

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Speaker 2: expect that we should be able to announce the right

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Speaker 2: deals during the course of this year, and that will

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Speaker 2: be the true test set that we're really executing our

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Speaker 2: strategy and we don't need a transformational deal.

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Speaker 3: Is that primarily going to be acquisitions? Are there also

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Speaker 3: divestagers that you're also considering.

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Speaker 2: Some divests too? I mean, you know, if I have

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Speaker 2: to truly live to my word of the three mega trends,

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Speaker 2: there are parts of our portfolio which don't fit well,

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Speaker 2: and we'll slowly divest them. The reason we have not

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Speaker 2: been public is the best interest of our shareholders because

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Speaker 2: by making it public, we won't get the value at

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Speaker 2: the exit point. But it doesn't mean internally we're not

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Speaker 2: doing the work. We are doing the work, and I

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Speaker 2: think it will unfold as the time passes by.

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Speaker 3: I do want to get your thoughts on the automation business.

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Speaker 3: Investors have been a little bit concerned about how that's

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Speaker 3: like the other two major units that you have. I mean,

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Speaker 3: we are at a time a pretty tremendous structural change

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Speaker 3: in our economy, structural changes that I think would be

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Speaker 3: a pretty big tailwan for the automation sector. Why have

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Speaker 3: we not seen that show work yet in Honeywells results?

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Speaker 2: Look over our businesses, I would say The near term

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Speaker 2: results are combination of our automation business, which is short

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Speaker 2: cycle and long cycle. The long cycle portions of automation

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Speaker 2: are doing well because people are building long term capacity

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Speaker 2: on different end markets. The short cycle is still recovering

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Speaker 2: from the COVID cycle, which can look awkward to say,

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Speaker 2: you've been four years and you're still talking about COVID.

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Speaker 2: But the stalking impacts the distribution distributors is still playing

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Speaker 2: out and that's a large portion of our automation business,

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Speaker 2: and that negatively impacts the numbers at this point. But

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Speaker 2: we are confident as a year is progressing. Every quarter

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Speaker 2: we are doing better than the previous quarter, and that's

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Speaker 2: our you know, the Rubrik for twenty twenty four. That sequentially,

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Speaker 2: we keep improving short cycle every quarter and we have

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Speaker 2: a strong exit and end of the year which positions

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Speaker 2: us very well for twenty twenty five. So I'm very

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Speaker 2: confident this is going. This is if or when we

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Speaker 2: exactly know the different businesses and different cycle they are

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Speaker 2: and when they are going to see recovery. And we

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Speaker 2: see recovery in many of the businesses already, but it's

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Speaker 2: not all in because it's not a switch. We have

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Speaker 2: multiple businesses and multiple end markets. Therefore, it is going

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Speaker 2: to be sequenced over a timeline.

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Speaker 1: So the warehouse automation part, you are one hundred percent

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Speaker 1: committed to.

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Speaker 2: It absolutely today we are absolutely committed to it. It's

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Speaker 2: a critical need of improving worker efficiency or labor shortages.

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Speaker 2: So this is not about debate of is it a

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Speaker 2: good sector or bad sector. Fundamentally, the value proposition is

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Speaker 2: very strong. It went through the capacity built and overbuilt

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Speaker 2: during the COVID cycle because everybody put too much of

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Speaker 2: bet on e commerce and overbuilt it. So it's going

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Speaker 2: through some correction. So they are the correction pains we

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Speaker 2: saw in twenty three. We're probably going to experience this

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Speaker 2: twenty four. But if I take a five or ten

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Speaker 2: year view, clearly there is a clear value proposition on

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Speaker 2: why people invest in it because it gives productivity.

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Speaker 1: To them, which leads us back just to inorganic growth

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Speaker 1: is what you were talking about and seeing opportunities there.

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Speaker 1: Next year, you're looking at selling that quantum computing business

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Speaker 1: and that could fetch as much as five billion or

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Speaker 1: even more. Right, that's a.

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Speaker 2: Nice hefty sum.

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Speaker 1: It is what do you want to buy so you

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Speaker 1: don't have to have a huge transformational deal. But what

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Speaker 1: is on your.

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Speaker 2: Shopping So our shopping list is bolt on acquisitions because

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Speaker 2: you want to be thoughtful on how you want to

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Speaker 2: progress your strategy in each of these three mega trends,

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Speaker 2: and the boldt on acquisition to me is something which

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Speaker 2: attaches with your current business, takes you to an adjacency,

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Speaker 2: and compounds the growth of that business by itself. The

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Speaker 2: acquisition we made on Compressive Control last year, that was

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Speaker 2: an acquisition into our automation business. It's a bolt on

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Speaker 2: to that. The acquisition we made for our career is

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Speaker 2: a boilt on to our building automation business. We acquire

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Speaker 2: Cibit navin Itally, the acquisition get completing course of the

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Speaker 2: year is a bolt on to our aerospace business. If

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Speaker 2: you see that trend line, we are very purposeful to

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Speaker 2: do the boltons and we stay on course for three

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Speaker 2: of our mega trends, so we are not doing some

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Speaker 2: random things which makes no sense. Everything you will see

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Speaker 2: moving forward will following the same trend line.

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Speaker 1: Is that going to be enough to get your growth

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Speaker 1: engine really started?

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Speaker 2: Absolutely?

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Speaker 1: I mean when when is that growth engine going to

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Speaker 1: rev up? Hardcore?

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Speaker 2: Look, our commitment to our shareholder is eight to twelve

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Speaker 2: person earnings growth every year. And what I need to

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Speaker 2: work on is when you look at it five years

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Speaker 2: or greater horizon, are we capable of delivering that every year,

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Speaker 2: year on year. And so I look at organic growth

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Speaker 2: and in organic growth in combination of that and are

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Speaker 2: readily prepared for, you know, preferably double digit earnings growth.

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Speaker 2: That's what I'm here for.

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Speaker 1: That was Honeywell CEO Vima Kaporg