Honeywell to Cut 6,000 More Jobs, Merge Units, Shut Plant
Honeywell Inc. said Monday that it plans to eliminate an additional 6,000 jobs worldwide within the next year to cut costs after a weaker-than-expected second quarter.
The manufacturing giant also said it would merge its polymers and specialty chemicals businesses and close a semiconductor chip packaging plant in California to streamline underperforming units.
Honeywell last month predicted that earnings for the quarter would not be as high as expected because of parts shortages in its aerospace unit, higher raw material prices and higher interest rates.
The company formed by the merger of Honeywell and AlliedSignal in December said Monday that it expects to earn 75 cents a share when it announces its second-quarter earnings on Tuesday. Last month, it predicted earnings would be 73 cents to 77 cents a share, missing analysts’ expectations of 78 cents a share. That announcement, on June 19, sent Honeywell’s shares tumbling 18%, shaving about $6.88 billion off the company’s market value.
The company--which makes products ranging from turbochargers and aircraft electronics to specialty chemicals and home security systems--said the new job cuts would come from a hiring freeze, attrition and retirements, and would be worldwide. The company has 120,000 employees.
The Morris Township, N.J.-based company has completed about 65% of an earlier plan to cut 11,000 jobs, which represented a 10% reduction at the time it was announced.
Honeywell said it expects second-quarter sales growth of about 6% to $6.3 billion, driven by aerospace and turbocharger projects.
It said revenue would suffer from lower sales in its industrial automation and control, truck brakes and aerospace electronics divisions because of parts shortages.
For the year, Honeywell now expects to earn $3 to $3.05 a share, up 12% to 14% from the previous year, on sales growth of 8% to 10%. Analysts surveyed by First Call/Thomson Financial had predicted $3.11 a share.
Chief Executive Michael Bonsignore said Honeywell will focus its investments on core businesses such as aerospace, home and building control, turbogenerator, turbocharger and electronic materials.
Honeywell stock closed up 38 cents at $35 in heavy trading on the New York Stock Exchange.
