Charles R. Goulding and Preeti Sulibhavi describe Honeywell’s journey through aerospace breakthroughs and automation innovation sets the stage for Elliott’s $5 billion-driven restructuring proposal.
In November 2023, Elliott Investment Management revealed a substantial US$5 billion stake in Honeywell International and called for the company to split its aerospace and automation segments. Elliott argued that splitting the conglomerate would enhance shareholder value and position both segments for focused growth, estimating the valuation of Honeywell’s automation division alone could reach US$100 billion. Honeywell, a US$153 billion industrial conglomerate, expressed openness to discussing these restructuring suggestions with Elliott. Honeywell has previously avoided the fate of companies like General Electric (GE) and Dow Chemical, which broke up due to investor pressure.
In 2023, Honeywell recorded strong performance, particularly in aerospace and automation, contributing significantly to its US$35 billion in annual sales. Honeywell also maintains a global workforce of about 97,000 employees, reflecting its extensive influence across sectors from aerospace to advanced automation solutions. Honeywell has been at the forefront of integrating 3D printing into both aerospace and automation, which aligns with its goals to innovate and streamline manufacturing.
Examples of Honeywell’s use of 3D printing technology include:
- Aerospace Components: Honeywell employs 3D printing to produce lightweight, durable components for aircraft engines, reducing production times and material costs.
Honeywell has leveraged 3D printing to manufacture complex fuel nozzles for aircraft engines, traditionally made of multiple parts but now produced as a single, lightweight component. This innovation reduces the nozzle’s weight, streamlines fuel efficiency, and cuts down assembly time.
Honeywell uses additive manufacturing to create thermal shielding components for aerospace applications. These parts are essential for temperature regulation in space and are made from high-performance materials designed to withstand extreme conditions, which 3D printing can achieve with precise geometry and minimal waste.
- Custom Automation Parts: In its automation segment, Honeywell uses 3D printing to rapidly prototype and produce custom components for industrial automation systems, enabling faster deployment and reduced lead times.
Honeywell also utilizes 3D printing to prototype and test control panels and other interfaces for automation systems quickly. This approach accelerates the design process, allowing engineers to adjust features on the go and ensure that components meet exact specifications before moving to full-scale production.
- Repair Parts for Aerospace: Honeywell has implemented additive manufacturing to create replacement parts for aviation applications, improving repair turnaround and reducing dependency on traditional supply chains.
- Tooling for Automation Systems: In support of its automation systems, Honeywell fabricates custom tooling with 3D printing, which helps streamline the production of automation equipment for manufacturing facilities.
In Honeywell’s automation segment, custom grippers and tooling are produced with 3D printing to enhance its robotics solutions. This allows Honeywell to rapidly develop and modify grippers for different manufacturing tasks, improving agility and reducing the need for external suppliers.
Honeywell recently made another bold move, acquiring Carrier’s Global Access Solutions business for approximately US$5 billion. Carrier’s security-focused technologies complement Honeywell’s offerings in building solutions, potentially expanding its portfolio in areas like access control and surveillance. While Carrier itself has explored 3D printing in HVAC parts and rapid prototyping, its initiatives have not been as central as Honeywell’s aerospace and automation efforts.
This acquisition and Elliott’s push for structural changes indicate a period of transformation for Honeywell, as it seeks to sharpen its focus on high-growth sectors and potentially embark on a new chapter as two distinct companies.
Honeywell’s use of 3D printing goes beyond mere production and prototyping—it’s an essential element in optimizing workflows, cutting costs, and meeting high standards of durability and efficiency in both aerospace and industrial automation. This adaptability has enabled the company to stay competitive and responsive in fast-evolving sectors.
The table below presents the increase in research and development expenses for Honeywell over the past few years.
The Research & Development Tax Credit
The now permanent Research and Development (R&D) Tax Credit is available for companies developing new or improved products, processes and/or software.
3D printing can help boost a company’s R&D Tax Credits. Wages for technical employees creating, testing and revising 3D printed prototypes are typically eligible expenses toward the R&D Tax Credit. Similarly, when used as a method of improving a process, time spent integrating 3D printing hardware and software can also be an eligible R&D expense. Lastly, when used for modeling and preproduction, the costs of filaments consumed during the development process may also be recovered.
Whether it is used for creating and testing prototypes or for final production, 3D printing is a great indicator that R&D Credit-eligible activities are taking place. Companies implementing this technology at any point should consider taking advantage of R&D Tax Credits.
Conclusion
The use of 3D printing in the aerospace, automation, and building component industries is growing and expanding. Honeywell’s recent business transactions should consider the implications that 3D printing will have on these business segments.
