United Technologies

United Technologies Corporation (UTC) was an American multinational conglomerate headquartered in Farmington, Connecticut.[1] It merged with the Raytheon Company in April 2020 to form Raytheon Technologies.[4] It researched, developed, and manufactured products in numerous areas, including aircraft engines, aerospace systems, HVAC, elevators and escalators, fire and security, building automation, and industrial products, among others. UTC was also a large military contractor, getting about 10% of its revenue from the U.S. government.[5][6] Gregory J. Hayes was the CEO and chairman.[7]

United Technologies Corporation
Public
Traded asNYSE: UTX
ISINUS75513E1010 
IndustryConglomerate
FateMerged with Raytheon Corporation to form Raytheon Technologies; Otis and Carrier spun off.
PredecessorUnited Aircraft Corporation
Successor
Founded1934 (1934) (as United Aircraft Corporation)
1975 (1975) (as United Technologies Corporation)
FounderFrederick Rentschler (for the United Aircraft line)
DefunctApril 3, 2020 (2020-04-03)
Headquarters
Farmington, Connecticut
,
United States[1]
Area served
Worldwide
Key people
Revenue US$66.501 billion (2018)[3]
US$8.553 billion (2018)[3]
US$5.269 billion (2018)[3]
Total assets US$134.211 billion (2018)[3]
Total equity US$38.446 billion (2018)[3]
Number of employees
240,000 (2018)[3]
Websitewww.utc.com

History

Pre-1970s
Main article: United Aircraft

1970s and 1980s

In 1974, Harry Gray left Litton Industries to become the CEO of United Aircraft.[8] He pursued a strategy of growth and diversification, changing the parent corporation's name to United Technologies Corporation (UTC) in 1975 to reflect the intent to diversify into numerous high tech fields beyond aerospace.[9] (The change became official on May 1, 1975.) The diversification was partially to balance civilian business against any overreliance on military business.[8] UTC became a mergers and acquisitions (M&A)–focused organization, with various forced takeovers of unwilling smaller corporations.[8] The next year (1976), UTC forcibly acquired Otis Elevator.[10] In 1979, Carrier Refrigeration and Mostek were acquired;[11] the Carrier deal was forcible, while the Mostek deal was a white knight move against hostile takeover designs by Gould.

At one point the military portion of UTC's business, whose sensitivity to "excess profits" and boom/bust demand drove UTC to diversify away from it, actually carried the weight of losses incurred by the commercial M&A side of the business.[8] Although M&A activity was not new to United Aircraft, the M&A activity of the 1970s and 1980s was higher-stakes and arguably unfocused. Rather than aviation being the central theme of UTC businesses, high tech (of any type) was the new theme. Some Wall Street watchers questioned the true value of M&A at almost any price, seemingly for its own sake.[8]

Mostek was sold in 1985 to the French electronics company Thomson.

1990s

UTC acquired Sundstrand Corporation in 1999, and merged it into UTC's Hamilton Standard unit to form Hamilton Sundstrand.

2000s

In 2003, UTC entered the fire and security business by purchasing Chubb Security.

In 2004, UTC acquired the Schweizer Aircraft Corporation which planned to operate as a wholly owned subsidiary under their Sikorsky Aircraft division.[12]

In 2005, UTC further pursued its stake in the fire and security business by purchasing Kidde. Also in 2005, UTC acquired Boeing's Rocketdyne division, which was merged into the Pratt & Whitney business unit and renamed Pratt & Whitney Rocketdyne (later sold to Aerojet and merged into Aerojet Rocketdyne.

In 2007, UTC opened the Hawk Works, a Rapid Prototyping and Military Derivatives Completion Center (RPMDCC) located west of the Elmira-Corning Regional Airport in Big Flats, New York.[13]

In March 2008, UTC made a $2.63 billion bid to acquire Diebold, a Canton, Ohio based manufacturer of banking and voting machines. Diebold rejected the buyout bid as inadequate.[14]

In November 2008, UTC's Carrier Corporation acquired NORESCO, an energy service company.[15]

In December 2009, it was announced that UTC would acquire a 49.5% stake in Clipper Windpower for $206 million.[16][17][18][19]

2010s

In April 2010, UTC announced that it was investing €15 million ($20 million) to set up the United Technologies Research Centre Ireland at University College Cork’s Tyndall National Institute which will carry out research on energy and security systems.[20]

In October 2010, UTC agreed with Clipper to acquire the rest of the company.[21]

Also in 2010, UTC conducted its largest acquisition up to this year, General Electric's security equipment business for US$1.8 billion, a move to support UTC's Fire & Security unit.[22]

In September 2011, UTC acquired a $18.4 billion deal (including $1.9 billion in net debt assumed) for aircraft components maker Goodrich Corporation.[23]

In June 2012, it was discovered that UTC sold military technology to the Chinese.[24] For pleading guilty to violating the Arms Export Control Act and making false statements, United Technologies and its subsidiaries were fined $75 million.[25]

In July 2012, United Technologies acquired Goodrich and merged it with Hamilton Sundstrand; the resulting organization is UTC Aerospace Systems.

In February 2013, UTC Power was sold to ClearEdge Power.[26]

In October 2014, Toshiba and United Technologies made a deal to expand their joint venture outside Japan.[27]

In January 2015, UTC Building & Industrial Systems completed the acquisition of CIAT Group, a leading HVAC manufacturing company in France.[28] In November, Lockheed Martin completed its $9.0 billion acquisition of Sikorsky Aircraft.[29]

In February 2016, UTC subsidiary Carrier Air Conditioner announced to employees at its Indianapolis and Huntington plants, that Carrier is moving manufacturing to Mexico: "The best way to stay competitive and protect the business for long-term is to move production from our facility in Indianapolis to Monterrey, Mexico. "[30] In December, Carrier agreed to keep the Indianapolis plant open, keeping 700 jobs in Indianapolis.[31] The plant in Huntington, Indiana would still close their doors, leaving 700 employees jobless.[32]

On September 4, 2017, UTC proposed to acquire Rockwell Collins in cash and stock for $23 billion, $30 billion including Rockwell Collins' net debt, for $500+ million of synergies expected by year four.[33]

On November 26, 2018, the company announced the Rockwell Collins deal had closed, and that it will split into three independent companies.[34] Pratt and Whitney and the newly-formed Collins Aerospace will remain under United Technologies, while Otis Elevator and UTC Climate, Controls & Security (doing business as Carrier) will be spun off as two independent companies.[35]

In June 2019, United Technologies announced the intention to merge with defense contractor Raytheon to form Raytheon Technologies Corporation. The combined company, valued at more than $100 billion after planned spinoffs, would be the world's second-largest aerospace-and-defense company by sales behind Boeing.[36] Although UTC will be the nominal survivor, the merged company will be headquartered in Waltham, Massachusetts, where Raytheon is based.[37]

In March 2020, United Technologies Corporation announced the separations of Carrier and Otis.[38]

Executive history

In April 2008, Louis Chênevert succeeded George David as the company's chief executive officer (CEO).[22][2] Chênevert served until 2014, when he was succeeded by Gregory Hayes.[2]

The chief financial officer's (CFO) position was held by Gregory Hayes until 2014, when he succeeded Louis Chênevert as CEO.[2]

The chairman of the board of directors (Chairperson) position went to Louis Chênevert, then the company's CEO, in January 2010, succeeding George David.[22]

Finances

For the fiscal year 2017, United Technologies reported earnings of US$4.552 billion, with an annual revenue of US$59.837 billion, an increase of 4.5% over the previous fiscal cycle. United Technologies shares traded at over $114 per share, and its market capitalization was valued at US$98.6 billion in October 2018.[39] UTC ranked No. 51 in the 2018 Fortune 500 list of the largest United States corporations by total revenue.[40]

Year Revenue
in mil. USD$		 Net income
in mil. USD$		 Total Assets
in mil. USD$		 Price per Share
in USD$		 Employees
2005 42,725 3,069 45,925 38.42
2006 47,829 3,732 47,141 46.56
2007 55,716 4,224 54,575 54.94
2008 59,119 4,689 56,837 49.91
2009 52,425 3,829 55,762 44.36
2010 52,275 4,373 58,493 58.86
2011 55,754 4,979 61,452 67.41
2012 57,708 5,130 89,409 67.87
2013 56,600 5,721 90,594 87.83 212,000
2014 57,900 6,220 91,206 101.42 211,000
2015 56,098 7,608 87,484 99.09 197,000
2016 57,244 5,055 89,706 96.15 202,000
2017 59,837 4,552 96,920 114.01 205,000

Business units
Hartford's Gold Building served as UTC's headquarters from 1975 to 2015[41]
Otis Elevator's former headquarters served as UTC's headquarters from 2015 to 2020
  • Otis Elevator Company: Manufacturer, installer, and servicer of elevators, escalators, and moving walkways.
  • Pratt & Whitney: Designs and builds aircraft engines and gas turbines.[22]
  • Collins Aerospace: Designs and manufactures aerospace systems for commercial, regional, corporate and military aircraft; a major supplier for international space programs. Provides industrial products for the hydrocarbon, chemical, and food processing industries, construction and mining companies. Collins Aerospace was formed following UTC's acquisition of Rockwell Collins in 2018, by combining the newly-acquired business with UTC Aerospace Systems, which itself was the result of a 2012 merger of Hamilton Sundstrand and the Goodrich Corporation.
  • UTC Climate, Controls & Security:[42] Makes fire detection and suppression systems, access control systems, and security alarm systems; provides security system integration and monitoring services.
    • Carrier: A global manufacturer of heating, ventilation, air conditioning, and refrigeration systems.
    • Kidde:[46] a leading manufacturer of residential smoke alarms, carbon monoxide (CO) alarms and fire extinguishers.
    • Chubb:[47] a fire and security systems manufacturer.
  • United Technologies Research Center (UTRC): A centralized research facility that supports all UTC business units in developing new technologies and processes.[48]

Former businesses
  • Clipper Windpower: A maker of wind turbines. In December 2010 Clipper Windpower was acquired by United Technologies Corporation. It was sold in 2012 to Platinum Equity LLC.
  • Hamilton Standard: which became part of Hamilton Sundstrand, now part of UTC Aerospace Systems.
  • Hamilton Test Systems, an Arizona-based developer of vehicle emission test equipment, which was sold to Georgetown Partners in December 1990, which renamed it Envirotest Systems Corp. It is now part of Environmental Systems Products Holdings (ESPH).
  • Inmont: paint and resins, which was later sold to BASF
  • Mostek semiconductor: from 1979 to 1985
  • Norden Systems: a corporation that manufactures electronics systems for military use, now a part of Northrop Grumman.
  • Pratt & Whitney Rocketdyne: sold in June 2013 and now part of GenCorp
  • Sikorsky Aircraft: maker of helicopters for commercial, industrial, institutional, government, and military use;[22] now a part of Lockheed Martin[49]
  • Turbo Power and Marine Systems, Inc: a manufacturer of simple-cycle electrical power generation units of 25 MW and 50 MW. Renamed Pratt & Whitney Power Systems in 2000,[51] sold to Mitsubishi Heavy Industry in May 2013[52] and is now a MHI group company named PW Power Systems, Inc.
  • UT Automotive: now a division of Lear Corporation
  • UT Communications: bought Lexar and Stromberg Carlson, makers of telephone equipment, which were later sold to Memorex in 1985.
  • UTC Power: a manufacturer of distributed power generation systems and fuel cells for commercial, transportation, and space and defense applications. It was sold to ClearEdge Power in February 2013.

Political contributions

During the 2004 election cycle, UTC was the sixth largest defense industry donor to political campaigns, contributing a total of $789,561. Sixty-four percent of UTC's 2004 contributions went to Republicans. UTC was also the sixth largest donor to federal candidates and political parties in the 2006 election cycle. Thirty-five percent of those contributions went to Democrats; 53% of the funds were contributed to Republicans.[53]

In 2005, United Technologies was among 53 entities that contributed the maximum of $250,000 to the second inauguration of President George W. Bush.[54][55]

Philanthropy

In 1981, a contribution from UTC made possible the exhibition "Paris/Magnum: Photographs 1935–1981", featuring photographs of Paris taken by photographers of Magnum Photos, the agency founded in 1947 by Robert Capa, George Rodger, Henri Cartier-Bresson, William Vandivert, and David Seymour. A volume of the same title, with text by Irwin Shaw and an introduction by Inge Morath, was also published in 1981.

UTC is the sponsor of the exhibition "Aphrodite and the Gods of Love" at Boston's Museum of Fine Arts that opened in fall 2011.[56]

UTC and its subsidiaries are major contributors to museums such as the New England Air Museum.[57][58]

Environmental record

Researchers at the University of Massachusetts Amherst have identified UTC as the 38th-largest corporate producer of air pollution in the United States as of 2008. UTC released roughly 110,000 pounds of toxic chemicals annually into the atmosphere[59] including manganese, nickel, chromium and related compounds.[60][61]

In the 2016 University of Massachusetts Amherst Toxic 100 Air Polluters Index, UTC was ranked 9th by a toxicity population exposure score. It was also reported they release 60,000 pounds of toxins into the air.[62]

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See also

References
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  2. Nordqvist, Joseph (November 24, 2014). "Louis Chenevert stepping down as CEO of United Technologies, being replaced by Gregory J. Hays". Market Business News. Retrieved January 18, 2020.
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  9. Fernandez 1983, p. 246.
  10. Fernandez 1983, pp. 246–251.
  11. Fernandez 1983, pp. 260–264.
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Bibliography
  • Fernandez, Ronald (1983), Excess Profits: The Rise of United Technologies, Boston: Addison-Wesley, ISBN 9780201104844.
  • Holland, Max (1989), When the Machine Stopped: A Cautionary Tale from Industrial America, Boston: Harvard Business School Press, ISBN 978-0-87584-208-0, OCLC 246343673.
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