United Tech Nears Deal to Buy Rockwell Collins for More Than $20 Billion

August 29, 2017

A worker assembles a circuit board used in a LCD screen for Boeing aircraft at the Rockwell Collins production facility in Manchester, Iowa, in 2016. United Technologies is nearing a deal to buy Rockwell for more than $20 billion, a tie-up that would create one of the world’s biggest aircraft-equipment makers. Photo: Daniel Acker/Bloomberg News

8/29/17

By Dana Mattioli, Joann S. Lublin and David Benoit
The Wall Street Journal

United Technologies Corp. is nearing a deal to buy Rockwell Collins Inc. for more than $20 billion, a tie-up that would create one of the world’s biggest aircraft-equipment makers.

The companies are discussing a per-share price for Rockwell of $140 or less and could come to an agreement as soon as this weekend, according to people familiar with the situation. Rockwell shares closed at $127.99 Monday, giving the company a market value of $20.8 billion.

As with all acquisition talks, it is possible they could hit a snag and not result in a deal, or the expected price could change.

The deal would boost United Technologies’ business supplying Boeing Co. and Airbus SE as the aerospace industry ramps up for a new generation of jets. The company already owns one of the world’s biggest jet-engine makers, Pratt & Whitney, part of an aerospace division that also makes parts such as wheels and landing gear.

Rockwell specializes in cockpit displays and communications systems for passenger jets and military programs. In April, the Cedar Rapids, Iowa, company closed its roughly $6 billion acquisition of B/E Aerospace Inc., a maker of plane seats and interiors.

Since word of the talks surfaced this month, several analysts have said they don’t expect significant antitrust issues given United Technologies and Rockwell make different airplane parts. But airplane manufacturers might voice concerns about any consolidation among their suppliers. Boeing and Airbus have also been nudging their way into aftermarket business to capture some of the profit from selling and servicing parts—putting them on a collision course with suppliers.

The possibility of a United Technologies deal for Rockwell caught some analysts by surprise. In June, United Technologies Chief Executive Greg Hayes told analysts the Farmington, Conn., company was looking to spend roughly $1 billion on acquisitions this year. It had about $7 billion in cash.

“As far as bigger M&A, it’s something we always look at, but I am reluctant to go out and pay some of the prices that we see today,” Mr. Hayes said at the Paris Air Show.

United Technologies has a market value of about $92 billion. Last year, the industrial giant, which also makes Carrier climate control systems and Otis elevators, rebuffed unsolicited takeover approaches from Honeywell International Inc.

— Thomas Gryta contributed to this article.

Original article can be found here: https://www.wsj.com/article_email/united-technologies-nears-deal-to-buy-rockwell-collins-for-more-than-20-billion-1504019858-lMyQjAxMTI3MjI2OTcyNDk2Wj/

Advertisements

Honeywell Sued for Allegedly Hacking Competitor’s Website

August 28, 2017

8/21/17

By Shayna Posses
Law360

New York — Honeywell International Inc. tried to capitalize on the success of a rival’s online fire and safety inspection tools by hacking into its computer system and stealing its intellectual property, customer list and eventually employees in the process of launching a competing product, according to a suit filed Friday in Georgia federal court.

BuildingReports.com Inc. alleges that Honeywell’s foray into the world of inspection report software and tools was marked by a “pattern of illicit conduct” in its suit accusing the tech giant of worming its way into — and damaging — BRC’s computer system, as well as trying to poach BRC’s customers and employees in the process of creating and launching the eVance Services program.

“This lawsuit arises out of Honeywell’s attempts to mimic BRC’s successful business model and develop this new, competing business line using improper means, including stealing BRC’s intellectual property, hacking into BRC’s computer system without authorization, scraping BRC’s website to obtain BRC’s customer list, damaging BRC’s computer system in the process, and then using the fruits of these labors to solicit BRC’s clients,” the complaint says.

Georgia-based BRC provides a number of online tools that help service providers, building owners, property managers, and fire and safety officials conduct a wide variety of inspections, including checking for compliance with local codes and Occupational Safety and Health Administration standards. These tools help reduce costs and compliance risks, according to BRC.

Among other products, the company offers clients web portals that allow them to log in and access inspection reports and tools. In connection with these offerings, BRC has secured a handful of copyrights on its inspection reports, the complaint asserts.

BRC first learned that Honeywell wanted to develop a competing product in 2011, when multiple people told it that Honeywell executives had approached them at an industry conference to ask what company they used for testing, according to the suit.

By early 2012, Honeywell had started downloading copies of BRC inspection reports from the company’s web portal without its knowledge, using logins Honeywell convinced an employee of one of BRC’s customers to create, the complaint says.

Meanwhile, Honeywell divisions were trying to squeeze information out of BRC more directly, with executives submitting requests for details about several applications through the company’s website, as well as asking for meetings in person, according to the suit.

Honeywell formally introduced its competing web-based inspection system in June 2014, the suit says.

A few months later, BRC launched a member locator function that allowed building owners to look up BRC customer service companies in their area. Within a week, Honeywell was systematically scraping the locator server to nab BRC’s customer list, using a software tool it created to force its way into the system, according to the complaint.

These searches dramatically slowed the server’s ability to service current and potential customers, leading to complaints and requiring a pair of BRC employees to work to mitigate and prevent the infiltration, the suit says.

Using the information it obtained, Honeywell has solicited a number of BRC’s customers, persuading some to move their accounts over, the suit alleges. Honeywell has also actively tried to steal BRC’s workers, including getting BRC specialist Jeff Montoney to jump ship in February, according to the complaint.

Honeywell has repeatedly used, reproduced, distributed and promoted inspection reports that are very similar to, if not clearly derived from, BRC’s copyrighted reports, to the point that customers have asked whether the companies are partners, the suit says.

BRC brings a number of claims against the company, including copyright infringement and tortious interference with employee relationships, as well as violations of Georgia’s Trade Secrets Act and Computer Systems Protection Act.

BRC seeks injunctive relief; compensatory, statutory and punitive damages; unlawful gains and profits; and attorneys’ fees and costs.

Representatives for the parties didn’t immediately return requests for comment Monday.

BRC is represented by Steven G. Hill, Douglas R. Kertscher and Martha L. Decker of Hill Kertscher & Wharton LLP.

Counsel information for Honeywell wasn’t immediately available.

The suit is BuildingReports.com Inc. v. Honeywell International Inc., suit number 1:17-cv-03140, in the U.S. District Court for the Northern District of Georgia.

–Editing by Pamela Wilkinson.

Original story can be found here: https://www.law360.com/articles/956162/honeywell-rival-says-it-hacked-into-system-and-stole-ip


Paint Booth Explosion Sends Two Honeywell Aerospace Workers to Hospital

August 10, 2017

7/4/17

By Harrison Grimwood
Tulsa World

Emergency responders transported two people from a north Tulsa industrial plant following an explosion Tuesday morning.

The injured people, employees of Honeywell Aerospace, were taken to a hospital in unknown conditions.

A paint booth in the plant, located in the 6900 block of North Lakewood Avenue, exploded about 7 a.m., Tulsa Fire Capt. Stan May said.

The two injured worker were ambulatory when firefighters and emergency medical personnel arrived.

May said the damage was contained but extensive. Insulation and fire walls limited the damage to the particular paint booth, a powder-coating area.

The explosion left about an 1,800-square-foot hole in the roof, May said.

As of 8:30 a.m., firefighters had not yet determined the cause of the explosion.

Phoenix-based Honeywell Aerospace is a manufacturer of aircraft engines and avionics.

Original story found here.


3M, Tyco, UTC Want Foam Suit Tossed

June 25, 2017

6/7/17

By Brian Amaral
Law360

Boston — Chemical companies including 3M, United Technologies and Tyco Fire Products LP asked a federal judge in Massachusetts to dismiss a county’s lawsuit over their firefighting foam products, arguing that the county’s contamination allegations are premature and far too vague.

The companies told U.S. District Judge Denise Casper that Barnstable County can’t even say which firefighting foam was used, or when, or how the county was harmed when chemicals from some or all of the foams allegedly contaminated the groundwater at a firefighter training facility. That fails under two Supreme Court cases, Iqbal and Twombly, that are often cited together to bat back lawsuits that don’t allege a particular harm, a lawyer from United Technologies said.

“There is no allegation that United Technologies or any other defendant caused the county harm,” Jonathan I. Handler of Day Pitney LLP said. “They have to say that United Technologies products caused this harm, with some factual adornment. This is exactly the type of fishing expedition that Iqbal and Twombly said you couldn’t proceed on”

In January, Barnstable County sued a number of companies, including 3M, Buckeye Fire Protection Co., Chemguard, Inc., Tyco Fire Products LP, United Technologies Corp. and National Foam Inc., alleging that the companies made aqueous film forming foam, which was developed by the military and helps fight fuel fires. The product was defective and the companies failed to warn customers about potential hazards from chemicals in the foam, the county said.

The county’s suit came after it was hit with a lawsuit of its own, from a local town that hosts the firefighting academy. The town is seeking the costs of treating drinking water from the contamination. The country has also faced demands from state environmental regulators.

The foam, Barnstable County said, contains the chemicals perfluorooctanesulfonic acid, or PFOS, and perfluorooctanoic acid, PFOA. Both pose risks to humans, the county said.

The county said the foam was used at its firefighter training center and leached into its own groundwater and the groundwater of adjoining property.

Yet in part because it didn’t use the foam itself, it can’t identify which products were actually used at the firefighter training facility, the county said. It is enough at this point to allege that the companies made the type of foam that contaminated the site, the county said.

“We can’t look up that United Technologies’ substance was used on the property,” Richard Head of SL Environmental Law Group PC said, adding that it was enough to say they manufactured it.

Some of the particulars can be figured out later, the county’s lawyer said.

“At some level, there has to be some discovery as to the distribution and amount of the substance used,” Head said.

If the county waited in the state litigation to figure out which company’s foam was used when, the statute of limitations could run out, the county argued.

Barnstable County, which encompasses Cape Cod, told Judge Casper that they’d pled enough to show that the companies were negligent; in addition, the county argues that the companies should indemnify them for the consequences of the contamination, like the lawsuit.

An attorney for 3M said the indemnification claims are premature; there’s no judgment against the county in the underlying state action by the town. The county’s arguments that it would be more efficient to litigate the negligence claims along with the indemnification claims shouldn’t outweigh the fact that the alleged harm hasn’t even yet occurred, 3M’s lawyer said.

“Those claims by the county are not ripe,” said Beth A. Landes of Brewer Attorneys and Counselors.

3M is represented by Beth A. Landes of Brewer Attorneys and Counselors and John D. Stuebing of Tarlow Breed Hart & Rodgers PC.

United Technologies Corp. is represented by Jonathan I. Handler and Kennell M. Sambour of Day Pitney LLP.

National Foam Inc. is represented by Christian B.W. Stephens and Pamela C. Rutkowski of Eckert Seamans Cherin & Mellott LLC.

Buckeye Fire Equipment Co. is represented by Christopher M. Reilly of Sloane & Walsh LLP.

Tyco and Chemguard are represented by Sheila L. Birnbaum, Mark S. Cheffo, Douglas E. Fleming III and David Weinraub of Quinn Emanuel Urquhart & Sullivan LLP and Christopher A. Kenney and Lindsay M. Burke of Kenney & Sams PC.

Barnstable County is represented by Robert D. Cox Jr. and Jennifer L. Garner of Bowditch & Dewey LLP, Richard W. Head of SL Environmental Law Group PC and Kevin J. Madonna and Robert F. Kennedy Jr. of Madonna & Kennedy LLP.

The case is Barnstable County v. 3M et al, case number 1:17-cv-40002 in the U.S. District Court for the District of Massachusetts.

–Editing by Orlando Lorenzo.

The original article can be found here.


Netia (Poland/Data Center) Goes with Tyco System

June 25, 2017

6/15/16

Telecompaper

Polish operator Netia has completed the first stage of the upgrade of its data center in Warsaw. It has become the first collocation center with a state-of-the-art ‘silent nozzle’ extinguisher system. The operator has invested dozens of millions of zlotys in constructing and upgrading the center’s infrastructure, including a fire system of the latest generation, said Adam Kowalczyk, Senior Product Manager at Netia.

Traditional fire systems cause a huge noise, associated with discharging gas, of 135 decibels, similar to a jet plane starting. This can cause permanent damage to a collocation device, such as hard disks, which are highly sensitive and may include critical data.

The system of silent nozzles and pressure regulators enable continuous discharge of gas from bottles, reducing potential turbulence and bringing noise to a safe level, something over 100 decibels, said Zdzislaw Bernaciak, Director of the Department of Health & Safety, Fire Protection and Environment at Netia.

Netia used the services of Tyco, a globally known producer and supplier of extinguishing systems.

Original article can be found here.


UTC Chief Talks Trump – A Wall Street Journal Exclusive

May 22, 2017

Photo: Ken Fallin

5/5/17

By Joseph Rago
The Wall Street Journal

United Technologies head Gregory Hayes on how Trump kept the Carrier plant open — and the high-paid factory jobs he’s having trouble filling.

New York

‘It’s an uncomfortable thing when the president-elect calls,” says Greg Hayes. “That’s a powerful, persuasive perch.” The CEO of United Technologies is recounting the finale of his company’s 2016 cameo as the Jeb Bush of corporate America.

Perhaps it was inevitable that Donald J. Trump would conscript a blue-chip firm as his political foil. United Technologies Corp. is a multinational manufacturing conglomerate, with subsidiaries like Pratt & Whitney and Otis Elevator that were founded 90 and even 160 years ago, that makes everything from escalators to jet engines. Last November UTC’s Carrier unit, which makes heating, ventilation and air conditioning equipment, became a symbol of how Mr. Trump claimed trade and globalization had undermined American workers.

“My wife calls me ‘patient zero,’ ” Mr. Hayes says with a good-natured laugh, “because I was kind of the first one in the hopper and I survived, and so really a measure of success is the fact that we were able to deal with this.” He visited the Journal this week to discuss what it’s like to be a chief executive riding a political whirlwind—and the obligations of business leaders in an age of economic populism.

***

Mr. Hayes played football at Cornell, transferred to Purdue, and then joined Sundstrand, which was acquired by United Technologies in 1999. He rose through management and took over in late 2014. He had a rough first year, with shares slipping 18%. In 2015 UTC rolled out a restructuring plan to shed $1.5 billion in costs over three years.

The plan included closing two high-cost campuses in Indiana. One, outside Indianapolis, made gas furnaces. The other, in small-town Huntington, made electronic circuit boards. About 2,100 jobs would be lost in total, while furnace production would shift to Monterrey, Mexico.

Most of the furnace industry—both UTC’s competition and suppliers—has already moved to low-cost Mexico. The Indianapolis plant is an old-fashioned production line, where a component moves every couple of seconds and an operator performs a rote task, like installing fasteners in a handle. The jobs are relatively low wage and low skilled.

Mr. Hayes and his board concluded that closing the plants “was the right thing to do for the business long-term” to remain competitive in the market. If the larger business wasn’t profitable, then nobody would have job security. He thought UTC “could tell a story” about the higher-wage, higher-skilled domestic jobs it was creating in aerospace.

United Technologies also offered workers a yearslong lead time to plan their next steps, generous severance, and its 20-year-old Employee Scholar program, which pays full freight for two or four years of college education or vocational technical training for all employees, even after a plant shuts down.

“Look, we know there’s a dislocation associated with trade,” Mr. Hayes says. “There will be people left behind, and it’s the measure of how we treat those people and how we deal with those people that’ll determine whether or not we are ultimately successful.” Combined with globalization’s benefits — such as reducing the share of the world’s population that lives in poverty to 10% from 42% in 1981 — he thought all this would be enough to gut out the politics.

“My political prognostication skills are about zip,” Mr. Hayes concedes. A familiar business terror struck in February 2016: a cellphone video that outraged the internet and then hit cable news. The 3½-minute recording, now viewed 3.9 million times on YouTube, showed a Carrier executive informing workers on the shop floor that their jobs would be moving to Mexico. “I want to be clear, this is strictly a business decision,” the executive said, amid jeers.

History records hardly a campaign stop where Mr. Trump failed to assail Carrier. The candidate provided a flavor as early as Feb. 27, 2016, at a rally in Bentonville, Ark. “Let me tell you about Carrier,” Mr. Trump said. “So I watched Carrier, because it just happened a week ago, and I watched these people, they were devastated. They were there for a long time. Good people, good air conditioners. I buy a lot of Carrier air conditioners. I’m not buying them anymore.”

The candidate promised to call the CEO: “They’re going to say it’s terribly unpresidential, but I don’t care, all right? . . . I’d say to the head of Carrier, congratulations on your new plant. But here’s the story, folks. Every single air conditioner that you make as it passes the border, and we will have a real border, OK? We will have a real border, the illegals will not be able to carry those air conditioners in.” Goods that crossed the border, “every single one, you’re going to pay a 35% tax on, OK?”

Nine months later, when Mr. Hayes received Mr. Trump’s postelection call, he notes that “there was no threats, there was no quid pro quo, you do this or else.” As he recounts the conservation:

“He said, ‘Greg, you’ve got to help me.’ I’m like, ‘Sir, you know, we have looked at this, this is a cost — there is just no way. We got the plant already built down in Mexico.’ He goes, ‘No, Greg, you don’t understand. You got to help me. You got me elected. . . . I didn’t have a great campaign, a great focus on the campaign early on, but once I got this Carrier thing I used it everywhere.’ I said, ‘Yeah, I noticed.’ ”

Mr. Hayes agreed to “take a hard look.” His “biggest fear,” he says, wasn’t tariffs but reputational damage. Carrier air conditioners are among UTC’s few consumer-facing products, and “having Mr. Trump tarnish the brand — there was a huge cost to that.” Then again, the president also didn’t have to make the same 35% threat personally that he’d made in public hundreds of times.

UTC stayed, and also left. Indiana gave the company $7 million in tax incentives over a decade, and Carrier will invest $16 million to modernize the gas-furnace factory. The decision saved about 800 factory jobs in Indianapolis, as well as 300 HQ and engineering jobs, but the Huntington facility closed.

Mr. Trump dropped by Carrier in December as a conquering hero. The president-elect mused about his new friendship with “a great executive”: “I think if I lost, he wouldn’t have returned my call. I don’t know if — where is Greg? If I lost and called you, I don’t think you would have called. I would have tried for you, but I think it would have been tougher, right? What do you think, Greg? Yes, he’s sort of nodding yes, you’re right.”

Mr. Hayes hasn’t been invited to Mar-a-Lago, but he did join Dow Chemical CEO Andrew Liveris’ White House advisory council on manufacturing. “The rhetoric on trade is not helpful,” Mr. Hayes says, but he thinks Mr. Trump is “trying to move in the right direction” on deregulation and tax reform, plus he’s a better listener than his predecessor.

The drawback of the tumultuous Trump presidency so far, Mr. Hayes says, is uncertainty: “It’s bad for business, and there’s certainly a lot of uncertainty being created on a daily basis that is not helpful for us. For my people, they’re looking and say, ‘What do we do?’ I say, ‘Well, just relax, they’ll all be fine, right?’ You need to take everything with a bit of a grain of salt that comes out of Washington these days, and understand that there is a process, things will work themselves out.”

***

A populist might say that a company expecting sales of between $57.5 billion and $59 billion in 2017 — more than Goldman Sachs or Coca-Cola — can afford to pay more for American labor. The Carrier deal cost UTC about $25 million a year over the original plan, or about two cents a share. “We’re a big company,” Mr. Hayes says. “We can certainly deal with that kind of financial headwind.”

Still, there’s a cost. “I truly believe that if you have open markets, and you have the ability to let capital flow to most efficient uses, you are going to get better results than if you try to direct capital,” he says. But he admits: “I got it completely wrong, in terms of the political sentiment in the U.S., and I—you know, frankly I should’ve known better, because there is a large portion of the population that has been disenfranchised by globalization.”

Mr. Hayes’s solution is to improve education, specifically with a national apprenticeship program that would guide local public-private partnerships to train and prepare the workforce better. He knows the problem firsthand: “I’ve got thousands of job openings.”

Do you really?

“Thousands,” he replies. “A lot of this is because we’ve got growth in business on the aerospace side, but we’ll be adding thousands of jobs in the next three years, and right now I cannot hire mechanics who know how to put together jet engines. But it’s not just jet engines. We also make fan blades, other products, very sophisticated things. These are the high-value manufacturing jobs that America can actually support.”

A Pratt machinist earns $34 to $38 an hour, which with overtime works out to more than $100,000 a year — “pretty good money,” Mr. Hayes says. The positions can be filled by high-school graduates with “basic competencies in math and English” sufficient to, say, read a blueprint.

Mr. Hayes’s apprenticeship idea is about teaching such candidates the technical skills they need for the manufacturing jobs of the future —  the kind that aren’t becoming obsolete due to automation and artificial intelligence. Labor arbitrage, like moving to Mexico, can only work so long, as rising wages in China show. But humans can’t compete with robots, which, as he says one of his Chinese managers put it, “never get sick, never ask for a raise, and they work 24/7.”

Labor mobility is another concern. People are less willing to move to where jobs are. UTC recently built a factory in Lansing, Mich., to make engine housings for a new type of titanium-aluminum fan blade and needs to bring on about 1,000 new people. The work pays $23 an hour on average, yet some workers in Huntington, who earned $15 on average, “won’t move two hours north to Lansing.”

Mortgages, kids in school and cultural attachments can lead to such mismatches, but Mr. Hayes worries because labor mobility used to be “just a given.” His own career took him from Rockford, Ill., to San Diego to Valparaiso, Ind., to Hartford, Conn., over the years.

Whatever the obstacles, “we have to migrate from these very low-skill manufacturing jobs to the middle-skill and the higher-skill jobs,” Mr. Hayes says. His model is the 19th-century transition to an industrial economy from a rural one, in which 97% of American workers were farmers.

The irony is that for someone cast in 2016 as a villain, and despite U.S. law instructing executives to maximize shareholder value, Mr. Hayes believes companies are also accountable to other parties, including employees, consumers and the communities where they’re based  — an obligation that extends to financial support for academic research and the arts. “You try and balance these things without saying, ‘Hey look, it’s just business, we are just going to do what’s right for us,’ ” he says. “You have to at least understand and have some empathy for the other stakeholders in this.”

Over the long run, the danger is that the Carrier ruction won’t be an isolated incident but part of a populist trend. “I think that we have to as a society face the reality that the jobs that we have today aren’t going to be here 20 years from now,” Mr. Hayes says, “and if we don’t do something fundamentally different soon, we are going to have class warfare, and that’s a scary thing.”

For business leaders, Mr. Hayes has a suggestion: “We have to defend what we think is right, what we think is the better course for the country, and I think it’s OK to speak up  — you know, you’re going to get smacked down — and will the president and I be friends?” He lets the thought trail off.

Mr. Rago is a member of The Wall Street Journal’s editorial board.

Read the original story here.


The FSSA Educational Foundation is Accepting Scholarship Applications

May 22, 2017

Now Accepting Scholarship Applications 

Annually, the Fire Suppression Systems Association Educational Foundation awards scholarships to talented and worthy young people within the fire suppression industry.

Any student or college-bound individual affiliated with the fire suppression industry is eligible to apply. Candidates must have graduated from high school or its equivalent before July 1 of the year in which they will use the scholarship. Scholarships will only be awarded to students who will be participating in the fire protection programs at their universities. Students already enrolled in one of these colleges are also eligible to apply. Previous winners are eligible for another award.

Judges consider applicants’ academic success, interest, special abilities, financial need and other factors when selecting their choice of scholarship recipients. Judges are the Board of Directors for the Fire Suppression Systems Association Educational Foundation, Inc. There are no restrictions based upon the employment status or the sex, race, creed or nationality of the candidate.

In order to be considered, the scholarship applicant must complete a Scholarship Application Form and mail it and any attachments to the FSSA Scholarship address. The Scholarship Application Form is available on the website. To learn more about the scholarship and the materials that must be submitted, click here.

Click here to view the application.

The deadline for application submission is July 1, 2017.

The FSSA Scholarship Fund is supported by contributions from the fire suppression industry and other business groups and individuals. Contributions, which are tax-deductible, can be accepted at any time and in any amount

Contributions can be made in recognition of special events or in memory of a loved one. Single contributions of $25,000 or more will be honored by an annual scholarship named after the contributor. In order to increase the number and amount of scholarships available, FSSA is seeking additional support for the foundation. If you are interested in making a contribution, submit a donation online or mail a check to FSSA Headquarters at 3601 East Joppa Road, Baltimore, MD 21234.