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Honeywell Internal Email Shows Airplane Boom Time Over, More Layoffs Coming

A Mish reader who works at Honeywell (HON) informed me last week that a huge slowdown was coming in the aerospace/aircraft business.

I now have the internal memo from Tim Mahoney, Chief Executive Officer of Honeywell Aerospace, with comments from the reader who went through a similar layoff and forced furlough situation last November as well.

Obviously, things have not improved.

Honeywell Employee “HE” writes

Hi Mish,

Here’s a heads up for you regarding upcoming aerospace layoffs.

We got word a few days ago that Honeywell is planning a new “reduction in force”, which is the company’s PC term for layoffs. We received an e-mail indicating that the action is coming up in August, where employees have been solicited to voluntarily apply to participate.

This is a repeat of the situation that made the news last November in which Honeywell announced At Least 1,000 Phoenix Valley Workers to Lose Jobs following mandatory holiday furloughs.

In March, the Seattle Times reported Boeing Cuts Could Reach 10 Percent.

History is about to repeat. Layoffs for the entire industry are coming because business is in a huge slow down.

Best regards,

“HE”

Turbine Engine Orders Down 10-20%

In a followup Email “HE” writes …

We’re starting to see numbers for the coming jobs reduction. The pipeline for orders for turbine engines is down by 10-20% with job cuts going to be that range. About 40K people in Honeywell’s aero division. Because we have production backlog to keep revenue up, cuts are going to hit the aero division’s engineering and supply chain positions harder. Number of layoffs tough to predict because this portion of HON’s workforce is top-heavy by age with many folks near retirement who benefit from volunteering for the reduction.

The slowdown in order pipeline is not just from business jet makers. We also see a slowdown in commercial transport OEMs.

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Internal Honeywell Memo

From: Tim Mahoney Message
Sent: Wednesday, July 13, 2016 10:38 AM
Subject: Message from the Aerospace Leadership Team

This message was sent to Aero employees in the U.S., Puerto Rico and Canada*

MESSAGE FROM THE AEROSPACE LEADERSHIP TEAM

As witnessed with our recent cost-saving measures, Aerospace continues to experience the effects of a slowdown in certain business segments. The industry has experienced more than 30,000...


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