We all know the future is likely to be controlled by advanced technology, making running a renowned company like UTC, who engineers some of the world’s most advanced jets for military and commercial jets in need of a technically advanced leader like Louis Chenevert. Not only did his talent for technology skyrocket him to the top only six years after joining the company, but his brilliant insight into make constant improvements and never remain stagnant.
On January 1st, 2010, Louis Chenevert succeeded George David as the eighth Chairman of United Technologies. “I am deeply honored by this appointment and privileged to serve as Chairman. I look forward to building upon the tremendous success UTC enjoyed under George,” Chenevert said at his time of appointment.
UTC earnings tripled during his time as President and CEO, and the shareholder return succeeded other companies in the market. “Today, UTC is a high-performance organization, and I am excited to have the opportunity to lead it into the future. I’m confident in UTC’s future because of our market leading businesses, unmatched portfolio of products, and strong leadership team,” said Chenevert.
Chenevert was named CEO of UTC when the United States was still trudging its way through the great recession, yet he was able to increase the share price of the firm to $117 from the initial $ 37–a 200% appreciation, even if you did not include the payout dividends. His investment in breaking ground at UTC during his time there not only kept the company afloat, but drove it towards success.
It takes a certain type of businessman with an uncanny ability to see what will lead the company towards attaining success and what will lead them towards becoming stagnant. Louis Chnevert understood the importance of making the companies financial success work, and more importantly, he understood how to not just sustain that financial success but how to make it flourish.
Chenevert’s Investments at UTC
Chenevert excelled at preserving the stability of the company by not outsourcing production. He moved a group of aeronautical engineers to the base in Connecticut allowing them to tighten their skills and abilities where most needed in the military and commercial markets. The company’s branch in Connecticut primarily centers on Climate, Controls, and Security trade providing high quality and cutting edge technology. The development of the GTF engine with Pratt & Whitney, a risky business decision, but one that was well worth it. The GTF engine was chosen as an option for the Airbus. Chneverts design of the GTF was exclusive to his unique engineering capabilities. The GTF was 16% more efficient than all the other engines on the market at the time, and it had fewer emissions by 50% as well as noise reduction pollution by 75%, which no other engine had been able to achieve at that time. The UTC Sikorsky unit expanded in their innovative plans by manufacturing helicopters more than any other plant in the United States. The GTF Engine had a major role in this development.
One of Louis Cheneverts greatest achievements through his career was his acquisition of Goodrich. At the time Goodrich, based in Charlotte, North Carolina, produced landing gear and other segments, while UTC made helicopters, aircraft engines and designed lifts and air conditioning units.
Chenevert knew investing in modern and advanced technology was one of the best strategies a business could do. His risk to acquire Goodrich took one year in negotiations before arriving at an $18.4 billion deal. The deal Chenevert made to take on Goodrich is known for being conducted with brilliant intuition, wisdom in investment, and much patience on Chenevert’s part and has since motivated other companies to invest in technology.
According to an article in the Financial Times, Mr. Chenevert said: “What puts these other conglomerates in a tough position is that they lose their way, they are not focused on what made them a success. UTC keeps adding where we are successful.” This mindset brought UTC beyond what it was before he came on board and when he obtained Goodrich he continued to exceed expectations. “The fact is, if you look at some of their ratios, while they are a very good company and have a good run over the last few years there is a lot of runway to extract 50 basis points of margin expansion a year,” Mr. Chenevert said in the interview with Financial Times.
Built on the legacy of Chenevert’s leadership, UTC assembles the world’s most advanced jet engines for commercial and military. UTC dominates the heating, refrigeration and air conditioning industry and produces more helicopters at its Sikorsky unit than any company in the United States. The various plants that are operated by the Aerospace Systems group produce actuators, sensors, brakes, flight controls, landing gears, and many other products. Chenevert’s natural talents for leadership and investments have brought UTC where it is today. His accomplishments in his six years at UTC are superior to what some achieve over an entire career.