Yahoo News Honeywell CEO expects a coronavirus treatment or vaccine by the end of 2020
Honeywell (HON) CEO Darius Adamczyk is staying very hopeful in the world’s fight against COVID-19.
“Personally, I don’t think we are that far away [from a vaccine or treatment]. I anticipate we will have something by the end of the year,” Adamczyk told Yahoo Finance’s The First Trade.
Adamczyk — who took over in 2017 as CEO of the incoming Dow Jones Industrial Average component Honeywell and is a member of the influential Business Roundtable — has good reason (besides it being good for humanity) to be rooting on the health care community to get COVID-19 vaccines and treatments out the door quickly.
For starters, Honeywell’s Aclar packaging unit is primed to play a pivotal role in getting treatments and vaccines to people as fast as possible. To address a shortage in glass vials often used to hold medication, Adamczyk says Aclar has developed a new non-glass vial for manufacturers to consider.
“It’s a real alternative for potential vaccines to have a different type of package,” says Adamczyk.
Meanwhile, even as Honeywell has pivoted under Adamczyk to developing technology used to power smart buildings while uncorking new quantum computing systems, the company remains tethered to the outcomes of the aerospace industry. Honeywell supplies the airline industry with everything from aircraft lighting to aftermarket spare parts. The company’s aerospace business is comprised of three sub-units: commercial aviation original equipment; commercial aviation aftermarket; and defense and space.
The business (which represented about 38% of 2019 net sales and 53% of operating profits) — specifically the commercial side as defense/space continues to perform well — has been hit hard in 2020 amid the one-two punch of Boeing’s 737 Max debacle and reduced travel from COVID-19.
Sales in Honeywell’s aerospace business dropped 28% year-over-year in the second quarter. The segment’s operating profit margins fell 510 basis points from a year ago.
A vaccine would go a long way to reversing the fortunes of this business in 2021.
“The defense business continues to grow, we are not too worried about that. Business aviation and private travel is recovering at a rate faster than air transport. So we see some recovery already. But obviously, until everybody comes back a bit more to the offices and you can go out and visit customers and some of your own installations that’s when it’s going to come back,” Adamczyk notes.
He adds, “The real catalyst we are looking for is a medical solution, whether it is a vaccine or effective therapeutic. My strong belief is once we get a medical solution there is a tremendous amount of pent-up demand for travel, whether it be business travel or personal.”
To cushion the blow in aerospace, Honeywell is on track to cut $1.4 billion to $1.6 billion in costs this year. The company has also aggressively ramped up its production of personal protective equipment to assist in slowing the spread of COVID-19. Honeywell notched a record $700 million in bookings for PPE in the second quarter.
Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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