IN DETAIL: Honeywell sets out its 5-year plan

The 2025 Avalon Airshow was the perfect stage for Honeywell to showcase its aerospace capabilities. The widely diversified company builds everything from mission-critical manned spaceship components to electric timers for central heating systems and announced in February of this year that it would break up into three separate companies – one of them will be Honeywell Aerospace.

Gregor Ferguson

Honeywell’s principal goal at Avalon 2025 was to raise interest in Honeywell’s defence and broader aerospace capabilities, according to Lee Davis, the Head of Defence and Aerospace for Honeywell in Australia. By the end of 2026 the Charlotte, North Carolina-based business will be three separate, publicly listed companies – Honeywell Aerospace, Honeywell Automation and Honeywell Advanced Materials.

By the time of the next Avalon Airshow Honeywell Aerospace will be a stand-alone entity with a turnover of around US$15 billion ($25.25 billion) and aims to have a very visible footprint in Australia.

“As Aerospace prepares for unprecedented demand in the years ahead across both commercial and defense markets, now is the right time for the business to begin its own journey as a standalone, public company,” said Vimal Kapur, Honeywell’s Chairman and CEO, when the announcement was made back in February of this year.

The planned separation will result in three publicly listed industry leaders with distinct strategies and growth drivers. The three independent companies will be appropriately capitalized, says a Honeywell stock exchange announcement, with the financial flexibility to take advantage of future growth opportunities.

As Lee Davis pointed out when EX² interviewed him at the Avalon Airshow 2025 site, Honeywell is a US$45 billion ($73 billion) company, more than one third of which is devoted to aerospace. Of this, some 40% is dedicated to defence. Honeywell has been present in Australia for 60 years, he says, with every business unit represented here.

There are Honeywell components, he says, on the RAAF’s F/A-18F Super Hornet and EA-18G Growler, the P-8A Poseidon and the E-7A Wedgetail. The company also provides components for the Chinook and Apache helicopters. To give an idea of the breadth of Honeywell’s product base, he adds, the company manufactures the Power and Thermal Management System (PTMS) for the RAAF’s F-35A Lightning IIs, the On-Board Oxygen Generation System (OBOGS), the Back-up Oxygen System (BOS), for which it announced at Avalon it had a signed an agreement with RFD Australia to carry out in-country support, elements of the Navigation system and the aircraft’s wheels and brakes.

Honeywell Aerospace technology is also used, says the company, on virtually every commercial aircraft worldwide and includes aircraft propulsion, cockpit and navigation systems, weather radars, OBOGS, wheels and brakes, and auxiliary power systems.

At Avalon Honeywell showcased its Boeing 757-200 testbed demonstrator. Seen from the left it looks like an ordinary B757, though with a striking, corporate paint scheme. Seen from the right, however, the additional pylon, protruding horizontally from the fuselage, just after of the flight deck, is obvious: this pylon is used by Honeywell to test the turbofan and turboprop engines that it also manufactures. While the aircraft at Avalon didn’t have an additional engine under test, it did have a number of avionics equipment demonstrators – weather radars, L-Band satellite communications systems and antennas, and the like, which it showed to invited guests.

And just for a bit of variety, Honeywell manufactures the AGT1500 gas turbine engines for the Australian Army’s M1A2 Abrams tanks. This engine was designed and is still built by a Honeywell legacy company, Avco Lycoming whose T55 turboshaft engines also power the Australian Army’s CH-47F Chinooks.

Honeywell isn’t a prime contractor, Davis acknowledges, but it’s a vital part of almost every prime contractor’s supply chain. This was brought home by another announcement at Avalon: the company has won a two-year pilot contract of undisclosed value from the Bryan, Texas-based not-for-profit BlueForge Alliance to deliver Australia’s AUKUS Submarine Industrial Base (SIB). The BlueForge Alliance aims to up-scale the defence industrial base in the USA and has extended its vision to embrace the AUKUS partners.

The two-year pilot contract was awarded on behalf of the AUKUS Acquisition and Integration Office of the US Navy. The contract will see Honeywell pick a number of vendors to whom it can securely transfer engineering design data and Intellectual Property (IP).

The company says it will establish an enhanced security framework that will underpin a safer, more secure, reliable and effective technology transfer to Australia. This will enable Australian Industry to support the sustainment, component manufacture (eventually) and operational readiness of the RAN’s planned fleet of conventionally armed, nuclear-powered Virginia–class submarines. The aim is to transfer the technology to manufacture both Honeywell-built components and US Navy or US government equipment in Australia.

For Davis it makes sense: it’s about establishing Australian suppliers to the Virginia-class sustainment and manufacturing supply chain quickly and, of paramount importance, securely. Honeywell’s Federal Solutions business, he says, does exactly that: it has worked for the US government for 80 years. Honeywell makes around 150,000 different items, so the company has vast experience of building supply chains (many of them quite complex) and, where necessary, doing so securely, he explains.

But Honeywell as a submarine company? Actually, yes: Honeywell has a defence and space operation in each of the three AUKUS countries and supports the submarine programs of all of them – the company provides everything from actuators and power and thermal management systems to navigation systems. And, crucially, it provides the infrastructure security architecture that supports all of the US’s nuclear defence sites, so it understands physical and cyber security, the company says.

However, one of Honeywell’s future areas of focus in Australia will be Defence’s GWEO, or Guided Weapons and Explosive Ordnance Enterprise. The company manufactures seeker heads, air data computers, antennas, navigation systems, guidance systems, thrust vectoring systems, guidance fin actuators and a number of other complex components for most of the missiles that the ADF has announced plans to buy.

The ADF’s shopping list at present includes  the Extended-Range version of Lockheed Martin’s Joint Air-Surface Stand-off Missile (JASSM)-ER, the Long-Range Anti-Ship Missile (LRASM), the standard and Extended Range variants of the Guided Multiple Launch Rocket System (GMLRS) and the Precision-Guided Missile (PrSM). The ADF also plans to acquire the Raytheon Advanced Anti-Radar Guided Missile (AARGM), Tomahawk cruise missile and Evolved Sea Sparrow Missile (ESSM).

Honeywell builds components for all of them.

Davis explained that Honeywell Aerospace’s aim over the next five years is to establish a Maintenance Repair and Overhaul (MRO) system in-country for at least some of the components and sub-assemblies in the ADF’s weapons family. This will eventually extend into local assembly of components that can be integrated into the company’s global supply chain.

In five years’ time, says Davis, the aim is to establish an entity in Australia that supports both AUKUS and GWEO, using Australian suppliers.

In the meantime, there is the corporate re-structuring to be taken care of. The company says the planned separations of its Automation, Aerospace and Advanced Materials businesses will create additional value as each will benefit from simplified strategic focus, deep management domain expertise in their specific area, greater financial flexibility and the ability to invest in line with their strategic goals.

The planned separation is designed to result in three publicly listed and appropriately capitalised industry leaders with their own distinctive strategies and growth drivers. With an annual revenue in 2024 of some US$15 billion ($24.25 billion) and a large, global installed base, Honeywell Aerospace will become one of the world’s largest publicly traded, pure aerospace suppliers.

On the same day EX² met Lee Davis, Honeywell announced that its Advanced Materials business, which had revenues of nearly US$4 billion ($6.47 billion) in 2024, would become Solstice Advanced Materials when it is spun off late this year or early in 2026. No names have been assigned as yet to either Honeywell Aerospace or Honeywell Automation, but that milestone will undoubtedly come.