MPR: An Interview with Michael Bonsignore

An Interview with Michael Bonsignore
By Bill Catlin
June 18, 1999

Honeywell CEO Michael Bonsignore says he does not think it would have been possible to keep the company headquarters in Minnesota in the pending merger with AlliedSignal. In an interview with Minnesota Public Radio, Bonsignore also says it would be out of the question to sell the company's largest division, which will remain headquartered in the Twin Cities.

THERE IS AN IRONY TO THE TIMING


Michael Bonsignore

of the AlliedSignal's buyout of Honeywell. The company remained independent despite years of financial turbulence in the late 1980s and early '90s. Since Michael Bonsignore took over as CEO in 1993, the company has emerged from its troubles in probably the best shape it's been for a long time. So why sell now? Bonsignore says the accelerating pace of mergers among both customers and competitors made it more and more likely the company would become a target.

Michael Bonsignore

Born: April 3, 1941 -Plattsburg, NY
Education: Graduated U.S. Naval Academy, 1963, with a degree in electrical engineering. Graduate work in ocean science and engineering at Texas A&M.
Honeywell Career: Joined Honeywell in 1969 with Aerospace Group in Los Angeles.
Names president of Honeywell Europe, S.A., 1982.
Named executive vice president, 1987.
Named chief operating officer, 1990.
Named chairman of the board and CEO, 1993.

Bonsignore: Our competitors were getting larger and larger as a result of consolidation within their own planning. And I didn't want to be put in a position where Honeywell could be confronted with a hostile offer, from which we had no sense of what the outcome would be. We have control over the outcome in this case. And we believe that is a far better alternative than waiting for the phone to ring.

Wearing cufflinks emblazoned with the American flag and sipping tea, Bonsignore says AlliedSignal CEO Larry Bossidy had similar concerns. Each company has a large presence in the aerospace business, but little overlap, which analysts say make them a good fit. Bonsignore says negotiations started in February and the headquarters location was one of the issues on the table.

Bonsignore: And we both had to give up something. In this case, I had to give up the headquarters in exchange for the name and some of the other things I considered really important to make sure the Honeywell legacy and franchise was perpetuated into the next millenium.

There may have been little choice about the headquarters location since the much larger AlliedSignal is buying Honeywell. Bonsignore says it was not possible to keep the headquarters in Minnesota, but he disputes a report that Bossidy insisted on it staying in New Jersey. Bonsignore emphasizes the importance of maintaining control of the corporation's destiny, and protecting its strategic and financial position.

Bonsignore: And at the end of the day, that's my first responsibility as the CEO of the company. First and foremost is to perpetuate the franchise into the future, and I think we've done that in an exemplary way here.

About 1,000 Honeywell headquarters' employees are expected to lose their jobs. Bonsignore goes on to become the CEO, and future chairman of the new company, Honeywell International. One of his chief jobs will be melding two companies with cultures that he says are different, but compatible. He also says he wants Honeywell's culture to change.

Bonsignore: I would characterize Allied's culture as one of being very driven by operational excellence, very driven by productivity. Time is of the essence at Allied. Frankly, this is one of the things that I was attracted to in my own right, because I would like to see Honeywell's heartbeat increase a little bit as a result of this merger.

More Information

See the MPR collection of stories about the Honeywell sale.

Asked if the company is too comfortable, he says it's only natural that a 114-year-old company might be inclined to take its success for granted. In addition to boosting the company's financial results, Bonsignore has been credited with a remarkable level of personal civic involvement, especially in the inner-city neighborhood, where the headquarters is located. The company has promised to maintain its level of giving, and Bonsignore says company attention to the Twin Cities won't languish even after he's moved to New Jersey.

Bonsignore: Clearly, I am not going to be as busy and involved in the community in my new capacity as I was in my current one. I mean, that goes without saying. But, I don't believe that in any way has to be hurtful in terms of Honeywell's commitment to the community. We have some other very dedicated Honeywell executives who will remain in the Twin Cities and they're going to have to take up some of the slack.

The Twin Cities will remain home to 6,000 Honeywell employees, and the headquarters of the Home and Building Control business, the company's largest, but also the weakest in profitability. Observers have wondered how the business will fit in the new company because its products like thermostats and security systems appear less compatible with AlliedSignal's products. But Bonsignore says the division has boosted its profit margins, and received heavy internal investment. Bonsignore says a number of its products have strong prospects, and selling the division is out of the question in the foreseeable future.

Bonsignore: Well, I'm quite excited about home and building control. It has been in a state of renewal for about the last three or four years, and I'm happy to say we're making some marvelous progress.

Honeywell is the second major Minnesota corporation in the last year whose CEO has remained at the helm, while the headquarters is leaving the state in a merger - the other being Norwest and its CEO, Dick Kovacevich. Bonsignore says that's mere coincidence. He also says there was nothing the state could have done to keep the Honeywell headquarters. And he points to companies like Medtronic, which - last year - acquired five companies, as evidence that Minnesota's future as a home for large corporate headquarters is not fading.

Bonsignore: Because the unemployment is low, because the quality of life is high, Minnesota, I think, is known as a God-fearing, hard-working place of deep values and strong family orientation. I think these are qualities about Minnesota that will always draw people to want to come and live here and work here. So as a result, while the mix may change, I think that the opportunities for Minnesota in the future are very bright.

And Bonsignore points to the rising share prices of both Honeywell and AlliedSignal in the wake of the merger as evidence that investors think the combined company's prospects are bright as well.

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