United Technologies Corporation (UTC) recently ranked number 50 in the Fortune 500. UTC has spent 23 years in total on the Fortune 500 list. They currently employ over 200,000 people and are a continuous bright spot for America. However, they did not start out this way. UTC was certainly not an overnight success. They continued to change along with the needs of the rest of the world and made themselves who they are today.
It officially began and took form in 1929 under the name of The United Aircraft and Transport Corporation. It was an aviation based company formed by William Boeing of Boeing Firms and Frederick Rentschler of Pratt & Whitney. They were not met with immediate success. In fact, they struggled. They knew a change had to take place for it to survive.
The company changed its name in 1934 to the United Aircraft Corporation. Again, they focused on supplying aviation products to the world. The main people that were the brain of the company at this time were the founder Frederick Rentschler and the senior engineer George J. Mead.
The United Aircraft Corporation flourished during the 1940s as World War II was underway. There was virtually an unlimited demand for production of anything to do with aviation that would help the United States during the war. The jet engine and helicopters were both heavily invested in by the United Aircraft Corporation. They were newer technologies and they realized quickly how important it was to be able to furnish these to the government. This was really just the beginning of their lucrative contracts with the U.S. government. At this time, they were ranked sixth for corporations that were furnishing America with wartime products. They had their foot in the door for big government contracts, and they still haven’t removed it.
During the 1950s, there were other companies that were trying to compete by producing their own jets. Pratt & Whitney was a subsidiary of the United Aircraft Corporation and they stepped up to the challenge. Led by Leonard S. Hobbs, their talented jet team developed the most powerful jet engine on the market for years. In doing so, their company was becoming even more profitable. It was literally a race to see who could build the most powerful jets on the market, and United Aircraft Corporation was winning.
When the 1960s came knocking, there were more companies ready to challenge for the lead in the aircraft and aviation market. Newer technology was being produced, and with it, aircraft that was getting bigger and bigger. GE and Rolls Royce were only two of the companies that were direct competition. They no longer had a stranglehold on the market. The Boeing 747 had its engines built by Pratt & Whitney, so that definitely helped the company during this time.
The 1970s brought disco and a name change for the company. The United Technologies Corporation (UTC) was officially born. The new CEO Harry Gray chose the name to represent their diversification in other avenues besides aviation. They were opening up brand new doors in the marketplace. UTC was exploring other high tech fields to compete in. Their ambition was no longer limited to aerospace, and they were soon competing for business across the globe.
Part of the diversifying meant acquiring more civilian business to counter the military contracts that they already had. This way they were covering all their bases. They were designing and manufacturing aerospace systems for commercial, corporate, military, regional, and even international space programs. A few new industries that they were now competing in were providing industrial products for mining companies. They were producing products for the food processing industry. UTC was in the business of manufacturing and installing elevators, escalators, and even moving walkways. They are also a global manufacturer of heating, ventilation, air conditioning, and refrigeration units. The amount of new businesses they continued to add into their corporation over the years was quite staggering. They were indeed changing with the times.
Louis Chenevert–who we’ve talked about before–had a hand in increasing UTC’s business and diversity when he took over as CEO and president back in 2006. He took his knowledge of production management, used it to help with production of their own products, and added in his own love of technology to greatly increase the profits of UTC. Chenevert completed a merger in late 2011 with Goodrich that most people did not see coming. Goodrich is a global supplier of systems and services for the aerospace and defense industry. It’s easy to see how Goodrich could work so well with UTC. Chenevert sealed the deal with Goodrich for $18.4 billion. The merger was a bit of a risk because of the huge amount of the deal, but one that Chenevert was willing to take.
Chenevert also participated in creating the geared turbofan engine. This pet project of his cost the company over $1 billion, but it turned out to be well worth it. The geared turbofan engine was able to provide an engine for the narrowbody jet market for Pratt & Whitney, and they had not participated strongly in this market for over 20 years. The engine reduces fuel consumption by 16 percent and emissions by 50 percent, so it is easy to see why the engine would be desirable in the aviation world.
During this time, UTC also had one of its subsidiary companies create quite an extraordinary X2 helicopter. Sikorsky developed a helicopter during Chenevert’s watch that had a 15 percent improved flight speed compared to a conventional helicopter. Combined with other new technologies, such as active vibration control, fly-by-wire flight controls, rigid rotor blades, low drag hub fairings, and an integrated propeller drive system to prevent excessive vibration and drag, there is much interest for the X2. The military is expecting the second generation of these helicopters to replace their current ordinary helicopters, and the newer ones will be flying twice as fast as normal helicopters. UTC’s military contracts keep on getting better and better.
The current UTC CEO Gregory Hayes took over in 2014 after Louis Chenevert rode off into retirement. Hayes holds the distinction of being the first chief executive to strike a deal with President Trump after the November 2016 election. Since then the company’s share price has kept climbing higher and higher. With expected increased military spending and the diversification of their corporation, UTC should be quite successful for many, many years to come.