Here’s an “Aero Industry Update” from a contact who works at Honeywell. His past comments have proven to be accurate. He now waits for the axe to fall due to cancelled orders and lack of demand.
Honeywell Employee writes ….
Hi Mish,
I am still waiting for the ax to fall at Honeywell in US. Reduction in force (RIF) has already hit the company’s sites in Mexico and Europe and US contractors are gone, but US RIF is on hold until Sept 13 at earliest because of WARN Act 60 day notice.
The axe will happen by the end of quarter. There’s lots of pressure coming from OEMs who are seeing big drop in demand from airline customers. Boeing is freezing prices so margins are getting pinched. Airbus customers are delaying deliveries because orders are not coming in. Bizjets orders are off too. The biggest weakness is from China, Brazil and Canada. Trouble is across entire the industry.
There’s lots of layoff rumors, particularly with old hands near retirement who volunteered for RIF. Employees now play games with layoff severance package and pensions, pushing some to pull trigger and retire now rather than wait for a package in September.
The games have caused management delays with internal work reorganizations. Employee reviews ask all engineers to confirm if they are willing to relocate to other sites. Lower level managers not in the loop on future plans.
There are rumors of two week unpaid furlough in November for remaining employees. Nonproduction employees had a one week furlough last December and just had another unpaid week in July.
Honeywell Employee
Mike “Mish” Shedlock
The media won’t ever say the “R” word in an election years.
True, but 8 years of ZIRP and NIRP and little growth or inflation. I would say we are in a “D” not an “R”.
We have to officially be in one. I think it’s more likely a recession announcement would be on hold until after the election, assuming there is a recession.
No media coverage… never happened. Didn’t you get the memo? It’s all happy unicorns and skittles, because Obama and Hillary are on the job.
Don’t resent the outsized government subsidized benefits, retirement plans and severance packages. Upper tier rent seekers encourage fruitless inter-class pique.
I hope those Boeing employees all find new jobs or retire comfortably.
In the long run, Uber and driverless ought to eviscerate the domestic airline industry.
I was going to buy a plane, but cancelled when I found out I can soon have a driver-less car. A James Bond ‘Spy Who Loved Me’ Underwater Lotus for international travel.
Ha! The old driver-less car….classic.
Will never be adopted by the masses….ever.
I’m pretty sure they will be not only adopted, but embraced by the masses. Sure, old coots like us won’t want them (just like we still miss Windows XP), but there are millions of people under 50 world wide who don’t want to drive, don’t want to own a vehicle, and can’t really afford to maintain one anyway. Once version 3.0 is released people over 70 will want them too.
“He now waits for the axe to fall due to cancelled orders and lack of demand.”
Not just aerospace … Inventories / Sales ‘suggests’ it will have company … lots of it.
This was hitting the news last year and into June this year
It was just in the preliminary stages then, now seems to becoming reality
It’s what the MSM has been hiding this year along with obama/hillary reality.
Aggregate demand is going to increasingly be destroyed by technological innovation and AI way above the rate it has been doing so for the last 40-50 years. Along with the already inherent scarcity ratio of total individual incomes to total costs/prices this means there will be increasing economic instability without the integration of the monetary policies of a universal dividend and retail discount into modern economies.
Here is the url to an excellent explanation of the cost accounting basics that confirms the above inherent state of our economy:
http://distributistreview.com/social-credit-analysis-cost/
Low gas prices. Long waits at the airport. Less need for business travel. Terrorists in every country. Lots of reasons for fewer planes needed.
SHORT them!
AirServices Australia RIF 20% http://www.theaustralian.com.au/business/aviation/airservices-australia-to-slash-staff-by-20-per-cent/news-story/4941c2116b9513506308499c87577e92
One of Honeywell’s competitors has been downsizing gradually over the past 2 years, so that a major R.I.F should not be needed. This year there has been 1 week of furlough and no raises. There is constant chatter about what it would take for coworkers to accept buyouts. My department has a lot of people waiting for the right deal to retire early. There are many who are not happy campers, mainly because management seems to have neither soft nor critical thinking skills.
This bodes ill for Bombardier’s C-Series, which is a fantastic airplane but is not getting orders. The development costs Bombardier sunk into the C-Series program may sink the entire company if demand continues to be slow.