United Technologies Corp. is positioned to capitalize on strong growth potential in Asian markets and to make its mark in developing alternative energy sources, its chief executive said last week.
George David, UTC’s chairman and chief executive officer, said China’s population boom and its openness to foreign investments make it even more lucrative than India, which also is growing rapidly but limits some kinds of outside manufacturing investments.
“India is 20 years behind China. We all agree on that today,” David said May 22, addressing attendees at the Electrical Products Group annual spring conference in Longboat Key, Fla.
“The question is whether India is going to become China, in a society that can’t decide if it’s open or closed,” he said.
About $2 billion of the company’s $9 billion in 2006 revenue from Asian markets came from China, David said, and the country’s growth is expected to fuel everything from new elevator orders to additional demand for residential and commercial air conditioning units.
In the early 1970s, about 25 percent of UTC’s business was international, David said. By last year, that had grown to about 60 percent, he said.
“We have some of the best emerging market exposure of any company in the world,” he said.
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UTC, a Hartford-based conglomerate with sectors ranging from climate control to aircraft engines, also makes fuel cells and is researching technology to recapture energy lost during manufacturing and operations.
“There’s a lot of things coming, and I feel this is the megatrend to define UTC for the next 40 years,” David said.
United Technologies reported a nearly 7 percent increase in first-quarter profits last month, citing double-digit growth at Otis and a strong comeback by Sikorsky after a strike last year.
Otis was fined $295 million by European regulators in February on charges of participating in a cartel with other elevator makers for the installation and maintenance of elevators and escalators in Belgium, Germany, Luxembourg and the Netherlands.
The company took a net charge of 7 cents per share in the first quarter to satisfy the fine against the Otis subsidiary. Otis also saw its first-quarter orders jump by 27 percent, David said last week.
The company has said it expects 2007 per-share earnings of between $4.05 and $4.20, and that it expects yearly revenue to increase to more than $51 billion, up 6.7 percent from $47.8 billion in 2006.
United Technologies also is the parent company of jet engine manufacturer Pratt and Whitney, aerospace company Hamilton Sundstrand, heating and cooling product division Carrier and other businesses.
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David also reiterated his plans to step down from the top spot in April 2008, but said he will remain board chairman to help in the transition.
Louis R. Chenevert, the company’s president and chief operating officer, is second in line behind David although the company’s board would have to vote on if, and when, Chenevert could move into the top spot.
David, who will be 66 at UTC’s annual meeting in April 2008, said Tuesday that he and others are looking into the future with four words: “More of the same.”
“I don’t believe in staying around too long,” he said of his retirement plans. “I believe it’s important to have a nice, clean end of term … I’d like to see that end with a really smooth, successful, recognized transition.”