Louis Chenevert is a Canadian businessman and former CEO of United Technologies Corporation (UTC), an American multinational conglomerate that researches, develops, as well as manufactures high-technology products. He spent 14 years working at General Motors, where he served as the Production General Manager. Chenevert joined Pratt & Whitney Canada in 1993, and was elected president after working for six years. In March 2006, he was elected as UTC’s Chairmain. He also served as Vice-Chairman of Executive Committee of the Business Council in the years 2011-2012. Chenevert stepped down as CEO of UTC on December 8, 2014. In September 2015, he joined the Merchant Banking Division at Goldman Sachs, where he took the role of an Exclusive Advisor—targeting opportunities in the industrial and aerospace sectors.
While CEO of UTC, Chenevert played a very significant role and left behind a legacy of high standards that remains difficult for other CEOs to match. He accomplished some amazing feats, such as making significant gains in the market while in a recession and acquiring Goodrich. This acquisition may stand as his signature deal that represents business acumen and extraordinary patience—spending more than one year in negotiations before arriving at an $18.4 billion deal.
But Chenevert’s pet project, the GTF, ranks high on his list of accomplishments. The pet project, which was chosen as an option for the Airbus established Pratt & Whitney as a very influential group in the narrow-body jet engine market. In 2011, regarded as the year of great accomplishment, he anticipated the development of advanced materials which helped the engine to burn hotter. According to Chenevert, the concept of decoupling the fan had great potential for a payoff in both the larger and newer engine designs. Remarkably, he helped UTC meet a commitment to invest in a high-quality technology that still drives growth for the company today and creates manufacturing jobs, thus boosting the U.S Economy.
Investing Now for the Future
Investing in the latest technology and employee education can set up businesses for future success, and Louis Chenevert, as well as Gregory Hayes, firmly believe in it. In a recent post from Gregory Hayes, who is UTC’s current CEO, describes effective CEOs as those that understand they are the company’s agents, with a duty to leave the company better than they found it. And the best way to go about this is, of course, making a serious commitment to continue investing in new innovations and in the people.
Although performance in the short term is very crucial, CEO’s should constantly be thinking about the long term future of the company. And the future is something that, without a doubt, needs investment. By investing money in new technology and employee education, CEOs will be able to set up the company for future success. Let’s face it; investments will help improve the economy, assist in creating more jobs and allow people to manage their time effectively. Also, a more educated workforce is likely to contribute new ideas and, therefore, will be in a better position to repay the money put in into their studies.
Well, Pratt & Whitney Geared Turbofan engine is a prime example of the commitment. The GTF engine was an investment of $10 billion that took more than 20 years to come up with an industry-changing jet engine. The new GTF that entered into service just last year is now used by 14 airlines on 72 aircraft. The engine reduces fuel burn by 16%, produces 50% less emissions, and cuts noise footprint by 75%.
At United Technologies Corporation, the idea of creating greener and more environmentally friendly designs is not something new. Louis Chenevert clearly understood this and made it a selling point for the products the company was producing. The products reduced the environmental footprint, emission of greenhouse gasses by 26%, and plants & factories cut their water consumption down by 53%. The company established the same global standard for all its facilities.
Pratt & Whitney has different factories that are set across the U.S— Connecticut, Georgia, Maine, Florida, New York and Michigan, etc. In fact, they also have a supply chain that touches almost every state. As they continue to put money towards new innovations, they’re also supporting the U.S economy and U.S manufacturing jobs, as well as meeting the needs of the current and future clients.
Just recently, UTC noted an increased demand to invest in new talents and expects to hire about 2500 people in the next 3 years. Some of the people will help support the growth of new technology.
Build on a legacy of Chenevert’s stewardship, UTC assembles the world’s most advanced jet engines for both commercial and military users. It dominates the heating, refrigeration and air conditioning industry. Also, it builds more helicopters at its Sikorsky unit than any other company in the U.S. The numerous plants that are operated by the Aerospace Systems unit produce actuators, sensors, brakes, flight controls, landing gears, etc.
Innovation investments will help grow the businesses of manufacturers, well as suppliers. You can’t overlook the importance of suppliers in helping producers deliver on their commitments to clients. For instance, almost 80% of the GTF’s parts from Pratt & Whitney are given out to suppliers. UTC, on the other hand, has spent almost $40 billion with suppliers in the U.S in a span of three years.
Although investments in new technology are important, business owners should not ignore the fact that the innovative ideas come from people and not the company. Needless to say, it’s extremely important to invest in educating the employees. For United Technologies Corporation, they have an Employee Scholar Program that encourages employees to pursue lifelong learning. Basically, the company is in charge of paying the fees for employees to earn degrees in their field of choice. More than 39,000 UTC employees have earned degrees through this scholarship program since 1996.