Over the last five years, profits and cash flow have doubled at Honeywell’s automation and control solutions division, rising to almost $13 billion in annual sales. In a Investor’s Business Daily interview, Roger Fradin, ACS’s chief executive, estimates that 40 percent of that growth is due to green products.
“One is called environment and combustion controls,” Fradin said, discussing its green-related businesses. Honeywell ACS is one of the large manufacturers of residential and commercial thermostats and other systems, such as humidifier and ventilation. The simple set-back thermostat alone can save customers up to 30 percent in annual energy costs, he said.
In the last year, combustion controls have been “the poster-child business for what we’ve done in innovation,” said Fradin. “Fundamentally, what we’ve done is (used) computer touch-screen technology (to make it easier for users to program their thermostat), similar to what you’ve seen with the Apple iPhone.” After all, “It’s nice to save energy, but if the consumer never uses the devices, the consumer never gets the benefit.” The result has been an increase from $1.5 to $2.5 billion in sales a year in five years.
Another green-related boon for ACS at Honeywell is the sensing and control business, which makes sensors for automobile and aircraft engines so that they run more efficiently. It also makes air-conditioning equipment to help maximize efficiency.
“Then we move to our Honeywell process solutions and Honeywell business solutions businesses. They include products that target oil refineries, chemical plants and paper mills. Energy costs are the number one input cost to run these facilities, and our control systems help our customers reduce the amount of energy they consume (by) maximizing their output.” Sales in this line have also gone from about $1.5 billion to $2.5 billion a year in the last five years.