Honeywell’s (HON) heritage dates back to 1885, when Albert Butz invented the thermostat and founded the Butz Thermo-Electric Regulator Co. in Minneapolis, Minnesota. After undergoing a series of ownership transfers and reorganizations, it came to be known as Minneapolis-Honeywell Regulator Co. in 1927.
By the 1940s, the company had evolved from a thermostat-producing company to a company with more than 3,000 control devices. The company serviced several end markets such as defense and aviation.
Honeywell brand: Becoming an icon
Many Baby Boomers in the US probably know Honeywell International (HON) better through its timeless T-86 round thermostat, which was introduced in the 1950s. The devices designed prior to the T-86 were all rectangular. Frustrated that these rectangular thermostats always appeared a bit slanted and never hung squarely on the wall, the device’s designer gave T-86 a circular shape.
Simple, innovative, and classic, the T-86 became the best-selling thermostat in history and made Honeywell a household name. Such was its influence that in 1963, the company changed its official name from Minneapolis-Honeywell Regulator Co. to Honeywell Inc. Today, as an icon of industrial design, the T-86 holds a place in the permanent collection of the Smithsonian Institution’s Cooper-Hewitt National Design Museum in New York.
Protected by Honeywell: Persistence of the brand
In 1999, Honeywell merged with AlliedSignal in a $15 billion transaction. At that time, Honeywell had earned $8.4 billion in revenues. AlliedSignal, which was a leading provider of aerospace (PPA) and automotive (VCR) equipment, posted ~$14 billion in annual revenues. Honeywell had a more recognizable name and had become synonymous with the “Protected by Honeywell” tagline for security products. Despite being the larger partner to the deal, AlliedSignal wisely retained Honeywell as the name for the new entity.
The newly formed Honeywell International was the subject of a merger attempt just a year later in 2000. General Electric (GE) outbid United Technologies (UTX) by $2 billion in a $42 billion deal. However, the European Commission for Competition shot down the merger in what could have been the capstone of the legendary outgoing CEO of General Electric, Jack Welch.