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United Technologies

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United Technologies Corporation
Company typePublic
NYSE: UTX
IndustryConglomerate
PredecessorUnited Aircraft
FoundedSeptember 26, 1934 (1934-09-26) (as United Aircraft Corporation)
May 1, 1975 (1975-05-01) (as United Technologies Corporation)
FounderFrederick Rentschler (for the United Aircraft line)
DefunctApril 3, 2020 (2020-04-03)
FateMerged with Raytheon to form RTX; Otis and Carrier spun off.
Successors
Headquarters
Farmington, Connecticut
,
United States[1]
Area served
Worldwide
Key people
RevenueUS$71.31 Billion (2019)
This article is about the defunct company prior to its merger with Raytheon Company. For the post-merger company, see RTX Corporation.

United Technologies Corporation (UTC) was an American multinational conglomerate headquartered in Farmington, Connecticut.[1] 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.[4][5] In April 2020, UTC merged with the Raytheon Company to form Raytheon Technologies, later renamed RTX Corporation.[6]

History

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Pre-1970s

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Main article: United Aircraft

1970s and 1980s

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In 1974, Harry Jack Gray left Litton Industries to become the CEO of United Aircraft.[7] 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.[8] (The change became official on May 1, 1975.) The diversification was partially to balance civilian business against any overreliance on military business.[7] UTC became a mergers and acquisitions (M&A)–focused organization, with various forced takeovers of unwilling smaller corporations.[7] The next year (1976), UTC forcibly acquired Otis Elevator.[9] In 1979, Carrier Refrigeration and Mostek were acquired;[10] 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.[7] 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.[7]

Mostek was sold in 1985 to the French electronics company Thomson.[citation needed]

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.[11]

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.[12]

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.[13]

In June 2012, it was discovered that UTC sold military technology to the Chinese.[14] For pleading guilty to violating the Arms Export Control Act and making false statements, United Technologies and its subsidiaries were fined $75 million.[15]

In February 2013, UTC Power was sold to ClearEdge Power.[16]

In October 2014, Toshiba and United Technologies made a deal to expand their joint venture outside Japan.[17]

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. "[18] In December, Carrier agreed to keep the Indianapolis plant open, keeping 700 jobs in Indianapolis.[19] The plant in Huntington, Indiana would still close their doors, leaving 700 employees jobless.[20]

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.[21] Although UTC was the nominal survivor, the merged company was headquartered at legacy Raytheon's former base in Waltham, Massachusetts.[22] The merger was completed in April 2020.[6]

In March 2020, United Technologies Corporation announced the separations of Carrier Global and Otis Worldwide.[23]

Executive history

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In April 2008, Louis Chênevert succeeded George David as the company's chief executive officer (CEO).[24][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.[24]

Finances

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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.[25] UTC ranked No. 51 in the 2018 Fortune 500 list of the largest United States corporations by total revenue.[26]

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 96.15 205,000
2017 59,837 4,552 96,920 114.01 205,000

Business units

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Hartford's Gold Building served as UTC's headquarters from 1975 to 2015[27]
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.[24]
  • 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:[28] Makes fire detection and suppression systems, access control systems, and security alarm systems; provides security system integration and monitoring services.
  • United Technologies Research Center (UTRC): A centralized research facility that supports all UTC business units in developing new technologies and processes.[33]

Acquisitions

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Former businesses

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  • Kidde:[47] a leading manufacturer of residential smoke alarms, carbon monoxide (CO) alarms and fire extinguishers. Now a subsidiary of UTC spin-off, Carrier
  • 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. Acquired in 1958, sold in 1994.[48]
  • 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;[24] 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

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During the 2004 election cycle, UTC was the sixth largest defense industry donor to political campaigns, contributing a total of $789,561; 64% went to Republicans. In the 2006 election cycle, UTC was again the sixth largest donor to federal candidates and political parties; 53% of the funds were contributed to Republicans, 35% percent to Democrats;[53]

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

Philanthropy

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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]

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

In April 2015, UTC signed an education partnership agreement with the China Friendship Foundation for Peace and Development,[59] a united front organization under the control of the Chinese People's Association for Friendship with Foreign Countries.[60][61]

Environmental record

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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 (50,000 kg) of toxic chemicals annually into the atmosphere[62] including manganese, nickel, chromium and related compounds.[63][64]

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 (27,200 kg) of toxins into the air.[65]

See also

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References

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  1. ^ a b "Locations". utc.com. Archived from the original on February 5, 2016. Retrieved February 1, 2016.
  2. ^ a b c d 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.
  3. ^ "UTC Names Gregory J. Hayes As President And Chief Executive Officer". CNN. November 24, 2014. Archived from the original on November 29, 2014. Retrieved November 24, 2014.
  4. ^ Ehrenfreund, Max (December 5, 2016). "CEO: United Tech. considered federal contracts in decision to keep Indiana jobs in deal with Trump". The Washington Post. Retrieved January 2, 2016. I also know that about 10 percent of our revenue comes from the U.S. government," [United Technologies chief executive Greg Hayes] said.
  5. ^ "CorpWatch : United Technologies". Archived from the original on July 4, 2015. Retrieved July 3, 2015.
  6. ^ a b "United Technologies and Raytheon Complete Merger of Equals Transaction". www.rtx.com (Press release). Raytheon Technologies. April 3, 2020. Retrieved April 3, 2020.
  7. ^ a b c d e Fernandez 1983.
  8. ^ Fernandez 1983, p. 246.
  9. ^ Fernandez 1983, pp. 246–251.
  10. ^ Fernandez 1983, pp. 260–264.
  11. ^ John Pike. "Sikorsky opens HAWK WORKS™ completion center for military helicopters". GlobalSecurity.org. Retrieved July 3, 2015.
  12. ^ "Diebold rejects $2.63 billion buyout bid". NBC News. March 3, 2008. Retrieved February 16, 2012.
  13. ^ Fiachra O Cionnaith (April 27, 2010). "US firm to create almost 100 jobs with 'clean energy research' centre". Irish Examiner. Retrieved July 2, 2019.
  14. ^ "United Technologies sent military copter tech to China". Reuters. June 28, 2012.
  15. ^ Winter, Michael (June 28, 2012). "United Technologies sold China software for attack copter". USA Today.
  16. ^ Nirappil, Fenit (February 12, 2013). "ClearEdge Power finalizes acquisition of UTC Power". The Oregonian. Retrieved February 24, 2013.
  17. ^ "Toshiba and United Technologies ink deal to expand outside Japan" (Press release). Reuters. October 16, 2014.
  18. ^ Mann, Ted (February 13, 2016). "Viral Video Over Plant Closure Gets Attention in GOP Debate". The Wall Street Journal. Retrieved March 3, 2016.
  19. ^ "UTC CEO says no 'quid pro quo' on keeping Indiana plant open". CNBC. December 5, 2016. Retrieved December 15, 2016.
  20. ^ "UTEC Leaving Huntington for Mexico at Cost of 700 Jobs".
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  22. ^ Singer, Stephen (June 9, 2019). "United Technologies says it's merging with defense contractor Raytheon and moving headquarters to Boston area from Connecticut". Hartford Courant. Retrieved June 10, 2019.
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  29. ^ "NORESCO". Retrieved June 10, 2019.
  30. ^ Carrier Corporation (November 21, 2008). "Carrier Acquires Noresco to Expand Energy Solutions Capabilities". Retrieved July 3, 2015.
  31. ^ "GFI Energy Ventures LLC Completes Sale of NORESCO to Carrier". Bloomberg.
  32. ^ "United Technologies decides to halt sale of Chubb fire unit". The Gazette. Retrieved October 7, 2019.
  33. ^ "Home - United Technologies Research Center". Retrieved July 3, 2015.
  34. ^ Schweizer acquisition press release Archived April 10, 2008, at the Wayback Machine
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  39. ^ UTC aims to take 49.5% of Clipper Windpower Archived March 5, 2012, at the Wayback Machine
  40. ^ UTC to acquire remaining interest in Clipper Windpower North American Windpower, October 18, 2010. Retrieved: October 23, 2010.
  41. ^ "United Technologies to acquire Goodrich in USD 18.4 bn deal". September 23, 2011. Archived from the original on June 5, 2012. Retrieved September 25, 2011.
  42. ^ "UTC Building & Industrial Systems Completes CIAT Acquisition". Archived from the original on February 20, 2015. Retrieved June 10, 2019.
  43. ^ "Lockheed Martin Completes Acquisition of Sikorsky Aircraft · Lockheed Martin". lockheedmartin.com. Retrieved February 18, 2016.
  44. ^ "United Technologies To Acquire Rockwell Collins For $30 Billion" (Press release). United Technologies. September 4, 2017.
  45. ^ Craver, Richard (November 27, 2018). "UTC completes $30B deal for Rockwell Collins, announces three-way split of company". Winston-Salem Journal.
  46. ^ Mattioli, Dana; Gryta, Thomas (November 26, 2018). "United Tech to Break Itself Into Three Companies". Wall Street Journal. Retrieved June 10, 2019 – via www.wsj.com.
  47. ^ "Kidde Fire Safety Products: Shop Smoke Alarms, Carbon Monoxide Detectors, Fire Extinguishers". Kidde Home Safety. Retrieved June 10, 2019.
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  54. ^ Drinkard, Jim (January 17, 2005). "Donors get good seats, great access this week". USA Today. Retrieved May 25, 2008.
  55. ^ "Financing the inauguration". USA Today. January 16, 2005. Retrieved May 25, 2008.
  56. ^ "Press Release: Aphrodite and the Gods of Love at Museum of Fine Arts, Boston" (PDF). Museum of Fine Arts, Boston. August 9, 2011. Archived from the original (PDF) on September 19, 2011. Retrieved August 27, 2011.
  57. ^ Schmidt, Christine (September 14, 2017). "With $2 Million Renovation, the New England Air Museum Entices New Visitors". Hartford Courant. Retrieved June 29, 2019.
  58. ^ "Corporate Partnership Program". New England Air Museum. Retrieved June 29, 2019.
  59. ^ "United Technologies and China Friendship Foundation for Peace and Development Announce Education Partnership". www.3blmedia.com. April 2, 2015. Retrieved September 19, 2020.
  60. ^ Cole, J. Michael; Hsu, Szu-Chien (July 30, 2020). Insidious Power: How China Undermines Global Democracy. Eastbridge Books. p. 54. ISBN 978-1-78869-213-7. Archived from the original on September 24, 2020. Retrieved September 19, 2020.
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  62. ^ "Toxic 100 Index". Political Economy Research Institute. Archived from the original on July 27, 2010. Retrieved November 26, 2008.
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Bibliography

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