Bonsignore's Bid for the Big Time
Donlon, J. P., Chief Executive (U.S.)
Still digesting the merger with AlliedSignal. Honeywell's Michael Bonsignore must convince skeptical investors that the combined company can deliver on its growth and productivity targets. Now for the hard part- He's set his sights on elevating the new company to the rarified ranks of Toyota, Royal Dutch/Shell, Cisco Systems and-you guessed ft-GE. HE BUSINESS LANDSCAPE IS littered with failed or ill-conceived mergers, a fact not lost on Honeywell's Michael Bonsignore, i when he got a call from AlliedSignal's chief Larry Bossidy,
a year ago. For the Plattsburg, N.Y. born Bonsignore, 58, the combination promised a boost into the big leagues for the $8.4 billion Minneapolis maker of electronic control equipment. For Bossidy, 65, the deal solved a succession problem at the $15 billion diversified manufacturer and allowed the former lieutenant of GE's Jack Welch, to exit at the top of his game. The deal created a $24 billion manufacturing and services conglomerate operating in four areas: aerospace, controls, performance materials and chemicals and power and transportation products. With 120,000 employees in nearly 100 countries the "new" Honeywell as the merged firm would be called, could boast that it entered the Fortune 50 as one of the Dow Jones index stocks capitalizing on a strong balance sheet. With $9 billion in revenue outside the U.S. the company is counting on its brand strength and enlarged global scale to give it heft in world markets. To outsiders the two chiefs are a study in contrasts. Bossidy, a toughminded Irishman not known for his patience or suffering fools gladly, brought his process-minded managerial talents to a stumbling conglomerate and turned AlliedSignal into a darling of earnings consistency. Bonsignore, the son of SicilianAmerican army doctor, is a highly personable, but focused figure who took Honeywell out its doldrums when he took over in 1993. Although not having the same public stature as Bossidy, Bonsignore nonetheless managed to convince him and the Allied Signal board to meet most of his demands including the retention of the Honeywell name. In return, Bonsignore agreed to keep corporate headquarters in Morristown, N.J. Severing its 115-year historical tie with Minneapolis was not an easy thing to do according to insiders.
Like sausage manufacture and lawmaking, merger integration shouldn't be witnessed by the squeamish. Yet the bloodletting thus far is proving remarkably contained-8,000 layoffs to date-up from the 4,500 originally anticipated. Led by Bill Hjerpe from Honeywell and Ray Stark from AlliedSignal, integration was completed in less than six months through 130 teams made up of 600 employees from both companies. Unlike an Exxon and Mobil or a Daimler and Chrysler, AlliedSignal and Honeywell were engaged in different but complementary businesses. Turf fights were few. "Having been through one significant merger," says CFO Richard Wallman who had been Bossidy's CFO, "I think this one has gone incredibly well. Apprehension remains an issue; we don't know everyone as well as we would like, but we don't view someone as an AlliedSignal person vs. a Honeywell person."
Bossidy and Bonsignore divided their time calling customers who they say saw the benefits of the merger intuitively. Both also had to get out and re-recruit employees. "It became clear that we had to solve the 'me' problem before we could get to the 'we' issues," Bonsignore says. "for example, our pension plan could have been a huge problem. Ultimately we let people keep their old one if they chose."
What will the merged culture become? Bonsignore allows that AlliedSignal excels at internal productivity processes such as six sigma whereas Honeywell is better at delighting the customer. He hopes a best of breed hybrid will survive but says he has no preconceptions. Early on some differences were apparent. Last June a merger announcement meeting was called for a Sunday morning at 8a.m. in Morristown. …