Honeywell CEO on China Tariffs: “We’re Ready”

Discussion in 'Wall St. News' started by bone, May 15, 2019.

  1. bone

    bone ET Sponsor

    As the tit for tat trade battle wages on in Washington and Beijing, one prominent American CEO says he’s prepared for just about every possible scenario.

    Honeywell CEO Darius Adamczyk says the company has already been moving critical supplies from North America to China and he has also been analyzing pricing options to “moderate the impact of the tariffs.”

    Speaking with Fortune, Adamczyk says, “We kind of have a lot of different scenarios and we’re ready.”

    And what if things escalate into a prolonged trade war? “We’re thinking through it. We actually have a plan for list four. It’s just about ready,” he explains. “It would take about sixty days plus to enact that.”

    Honeywell has a lot at stake in China. The Asian nation is its largest market outside of the United States. The Morris Plains, New Jersey conglomerate has been doing business in China since the 1930s. Today it has more than 13,000 employees working in 30 cities across the country. Honeywell is ranked in the top tier of the Fortune 500 list of America’s largest companies and those China operations account for a significant portion of its $40 billion in annual revenues.

    “I would love to see this thing resolved,” says Adamczyk of the US-China trade dispute. “It’s in the interests of the entire global economy for these two critically important economies to resolve their differences. It’s not going to be healthy long term for either economy or the global economy.”

    But Adamczyk is still hopeful for an agreement. “I’m confident it’s going to happen,” he says. “I’m not sure when, but it will.”
    dealmaker likes this.
  2. hum, Honeywell relocated suppliers from US to China. This will invite Trump attacks on twitter.
  3. bone

    bone ET Sponsor

    Actually the word the CEO used was "supplies". Which I take to mean that Honeywell ships raw supplies and components to China for assembly, and he was trying to avoid Chinese tariffs on US imports.
  4. If true, then it does not make much sense. Assembling the parts into a product added very little value, according to this report

    The cost of assembling an iphone is about a few dollars. Which is why US companies are so willing to outsourcing their assembling lines.

    BTW, Honeywell is a pioneer at out-sourcing the assembling line related work. I don't think it suddenly realized that it had to move the assembling lines to China now.
    Last edited: May 16, 2019