Honeywell Not Fighting Cuts in Military Spending
Honeywell International Inc. expects the bulk of the looming cuts to U.S. defense spending will occur as planned and it's not fighting them.
The defense company, speaking at an investor conference Monday, is taking a starkly different approach than rivals, who have fought against the cuts that are expected to reduce military spending by 10 percent.
Honeywell thinks most of the cuts will be triggered in January but will take several years to have an effect.
"We recognize these cuts are going to happen," Mike Madsen, president of Honeywell's defense and space unit, according to a report in the Wall Street Journal. "We're not really fighting these_they need to occur."
Although Honeywell executives recognize the cuts are coming, they would prefer a "thoughtful decision-making process" that takes into account longer-range defense strategy and the changing nature of threats, rather than across-the-board cuts.
Honeywell said the moves will reposition the nation back to the spending profile seen prior to 9/11 but said the specifics of how the cuts play out remain to be seen.
U.S. defense companies have spent months lobbying fiercely against the budget cuts that will lead to almost $500 billion chopped from military spending over the next decade.
Honeywell CEO Dave Cote has been among business executives consulted by President Barack Obama about future spending and tax priorities, and he attended a White House summit last week, according to the Wall Street Journal. Madsen said the company's view of defense priorities reflected the broader need to address the fiscal budget crisis
Honeywell's defense and space unit is expected to have revenue of around $5.1 billion this year.