Having its hands in too many pies may have contributed to industrial conglomerate General Electric‘s fall from grace. And that’s part of the reason why United Technologies might be seeking a different path.
On Tuesday, United Technologies CEO Greg Hayes hinted that he’s leaning toward a breakup of the $113 billion industrial giant. Hayes previously said on Sept. 14 that a choice would come in the next 60 days. The industrial firm runs three main lines of business: aerospace, elevators, and air conditioners. But its key aerospace unit outperformed the others in the most recent quarter.
“This is the question the board has had and many investors have had: Will these businesses be better as a part of United Technologies as a conglomerate, or better as standalone, focused business?” Hayes said at the Coins2Day Brainstorm Reinvent conference in Chicago Tuesday. “My view is: Focus ultimately leads to success.”
Hayes’s comments also come after Reuters reported that United Technologies is exploring a potential sale of its Chubb Fire & Security business.
Fellow industrial conglomerate GE fell on hard times following the 2007-08 financial recession. Analysts have pointed to the firm’s foray into several disparate industries in the last two decades, including finance, as one of the reasons why. It has since sold off business lines, which include Synchrony Financial.
“I think that’s where GE went wrong,” Hayes commented Tuesday. “And maybe in other places, too. But when you lose your focus—I think that’s when you go off the rails.”
“If you think about United Technologies, we have historically been an aerospace company,” Hayes said.
In a sign that the firm is indeed doubling down: Its $30 billion deal to acquire aerospace company Rockwell Collins is also expected to gain Department of Justice approval this week, according to Hayes, followed by approval from China in the weeks following.
