United Technologies (UTC) has the worldwide industrial expertise to lift you up and cool you down. Its Otis, UTC Climate Controls & Security, and Pratt & Whitney segments develop technologies, systems, and services for the aerospace, construction, and security industries. Climate Controls & Security makes alarms, monitoring equipment, surveillance and access control systems, and fire and hazard detection products. Otis is the world's largest elevator and escalator manufacturing company, while Pratt & Whitney makes commercial and military engines. UTC Aerospace Systems produces engine controls and flight systems for military and commercial clients. UTC announced in 2018 that it would break itself into three separate companies based on its business segments. The company also completed its $30 billion purchase of aircraft parts manufacturer Rockwell Collins.
Change in Company Type
As it completed the acquisition of Rockwell Collins in a $30 billion deal, United Technologies said it would break into three independent companies to provide better focus and flexibility to each business. The aerospace business composed of Collins Aerospace Systems and Pratt and Whitney will retain the United Technologies name. The Climate, Controls and Security business will be renamed Carrier and focus on heating and cooling products. Otis will continue to provide elevators, escalators and moving walkways as the third independent company. The company expects the separation to be completed in 2020.
UTC's Climate Controls & Security segment (30% of net sales) makes security products and firefighting equipment for the commercial, governmental, and residential sectors.
Pratt & Whitney (some 25%) makes and sells aircraft engines for the commercial, military, business jet, and general aviation markets. It also provides fleet management services and aftermarket maintenance services.
UTC Aerospace Systems (25%) provides aerospace products and aftermarket services for aircraft manufacturers, airlines, and the general aviation markets. (This division will soon be transformed into Collins Aerospace Systems following UTC's pending acquisition of Rockwell Collins that was announced in late 2017.)
In addition, UTC owns Otis (20%), one of the world’s largest elevator and escalator manufacturing, installation, and servicing companies.
UTC operates through 4,000 locations in more than 70 countries. The US generates around 55% of its total sales; Europe and the Asia/Pacific follow, contributing about 20% and 15%, respectively.
Sales and Marketing
The company serves customers residing in the commercial and industrial (contributing 50% revenue), commercial aerospace (almost 40%), and military aerospace and space (10%) sectors. The US government contributes roughly 20%.
UTC's revenues increased 2% from $56.1 billion in 2015 to $57.2 billion in 2016. This growth was attributed to higher commercial aftermarket sales from Pratt & Whitney and increased commercial OEM and aftermarket sales from UTC Aerospace Systems. In addition, UTC experienced higher service sales in the Americas and Asia and increased new equipment sales in North America, partially offset by lower new equipment sales in China from Otis in 2016.
UTC's profits, however, declined 34% from $7.6 billion in 2015 to $5.1 billion in 2016. This was attributed to a 3% rise in selling, general and administrative expenses driven by a pension settlement charge and increased expenses at Otis that reflected higher labor and information technology costs.
UTC strives to maintain a balance between its private and military sectors, its commercial and aerospace operations, and its original equipment (OE) and aftermarket products and services. It also juggles fluctuations in the market that may impact one or more of its businesses. These fluctuations include changing fuel costs and contracts from the
This strategy of product balance is combined with geographic balance, which has the company investing in emerging markets that show great growth potential, such as Argentina, Brazil, China, Mexico, the Middle East, Russia, and South Africa. UTC is champing at the bit to acquire aerospace and commercial companies with operations in India. Adhering to this strategy, in late 2017 it announced it was acquiring aircraft parts maker Rockwell Collins for $23 billion.
Mergers and Acquisitions
In the biggest aerospace deal in history, UTC agreed to purchase aircraft parts manufacturer Rockwell Collins for $23 billion in September 2017. When the deal is completed, Rockwell will become a new UTC division named Collins Aerospace Systems. UTC projects the new division will generate more than $23 billion in revenue per year and will make aviation electronics and communication equipment for commercial and military aircraft. UTC is making the deal to boost its aerospace business and position it as a key springboard for growth in the years ahead.
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Employer Type: Privately Owned
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