Fortune Magazine Celebrates Unionbusting Honeywell CEO Dave Cote

Class War For Idiots / May 21, 2012

By Mike Elk

“Dave Cote is feeling the beat. He takes a sip of Mountain Dew and bobs his head in time to the throbbing bass of Jay-Z’s “Hard Knock Life.” So begins a Fortune magazine profile titled “How Dave Cote Got Honeywell’s Groove Back.”

As someone who has covered Honeywell’s unionbusting—especially at an Illinois uranium processing plant—for the last two years, I found the long profile by Fortune Senior Editor-at-Large Shawn Tully fascinating. Tully was granted the type of access to Honeywell CEO David Cote and his closest friends and business advisors that reporters like myself, who focus not on profits but on how businesses treat workers, would love to have.

Tully’s profile is filled with entertaining stories about Cote. It talks about how he grew up the son of a mechanic and played the accordion as a child. It chronicles how, as a low-level GE auditor, Cote was found and mentored by CEO Jack Welch, who was impressed by Cote because of his “refusal to bad-mouth his superiors” and later recommended him to head Honeywell about 10 years ago. Now, Tully writes:

Honeywell (HON) ranks as a top performer among the diversified industrials, starting with how it has rewarded shareholders. Since the start of 2003, Honeywell’s stock has surged from $24 to $60. Investors have reaped a total return, including dividends, of 215%. That puts Honeywell in second place among industrial conglomerates…

And why exactly have Honeywell investors done so well? In large part because Cote has sytematically reduced the company’s “labor costs,” i.e, how much it pays workers. Tully writes:

Cote saw that labor costs for everything from aircraft power generators to fire alarms were far higher than those of competitors—a situation he couldn’t abide. He added an extra dimension to create what’s now the revered Honeywell Operating System, or HOS. Cote demanded that his troops replicate Toyota’s manufacturing practices—in Cote’s mind, the best in the world. He dispatched 70 managers to Toyota’s plant in Georgetown, Ky., to master techniques for speeding output with the leanest workforce possible.

The rewards have been spectacular. Since 2002, Honeywell has increased its headcount just 21%, vs. an increase in sales of 72%. By keeping fixed costs like labor relatively flat, Cote generates “operating leverage” that magnifies brisk revenue growth into outsize earnings. …

But Tully doesn’t interview a single union Honeywell worker that has been involved in one of the company’s numerous concessionary union contract struggles since Cote took over. Instead, he talks to Cote’s friend Vernon Jordon, super lobbyist and Bill Clinton adviser, who criticizes Cote for wearing jeans to business meetings, and his next door neighbor Jim Cramer, the former hedge fund manager and host of CNBC show Mad Money.

There is a brief quote from a former GE worker who disliked Cote’s approach to unions when Cote ran GE’s appliance division during the mid-1990s, but there is no interview with a current Honeywell worker. Tully doesn’t even note that Honeywell, the top corporate PAC donor to the Democratic Party in 2010, has pushed for concessions in three different strikes or lockouts since President Obama took office. (I explored connections between Honeywell and the federal government last year in a story titled “Is the Federal Government Helping to Bust Unions?”)

Curious as to why workers and tumultuous ongoing labor struggles are so absent from a 3,000-word profile, I e-mailed Tully, saying I wanted to talk to him about Honeywell’s relations with unions. Tully responded: “Mike, I don’t know anything about Honeywell’s labor relations.”

Fortune Senior Editor-at-Large Shawn Tully practicing his CEO suck-up smile…Work those cheek muscles, Tully! Work em!

This statement reveals what is wrong with so much journalism right now. Business reporters suck up to CEOs like Honeywell’s Dave Cote, and in exchange they get access and entertaining stories for long celebratory profile articles. What’s missing is any description of exactly how Honeywell lowered its labor costs—locking out workers, concessionary bargaining, driving down wages and benefits. Instead, readers walk away from the article with a vision of Cote and Honeywell akin to Steve Jobs and Apple. The piece details Cote’s eccentric management process as key to turning around the company:

Every few months, Cote sets aside a day to sit alone in his office reflecting on Big Ideas. He turns up the iTunes and doesn’t take phone calls. It was during these solitary sessions that he decided to concentrate on the three grand themes of energy efficiency, energy conservation, and safety.

Sure, what Honeywell makes isn’t as sexy as iMacs and iPhones, but at least Cote is wearing jeans to work and having monthly iTunes shuffle sessions in his office to creatively meditate on how his company can continue to take on the world. Just as with coverage of Jobs and Apple (at least until Foxconn scandals broke), Tully focuses on genius CEOs instead of detailing how they use the oldest trick in the corporate book to increase profits: exploit workers.

Cross-posted from In These Times…

Mike Elk previously wrote: The Problem With Matthew Yglesias and Jane Hamsher Unplugged (And Unhinged): Dare To Criticize Hamsher’s Appalling Labor Record, And This Is What You’ll Get

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27 Comments

Add your own

1. buthead | May 21st, 2012 at 10:33 pm
why would honeywell need operating system to manufacture hams
2. Trickle Down | May 22nd, 2012 at 1:14 am
Well, I’ve been banned (again) on that shitty “democratic underground” forum for speaking the truth about Kochsucker Corey Booker.
One of the prema donnas with like 30,000 posts said basically “fuck you, you don’t have as many posts as me” and within 30 minutes I was banned.
Shit sucks, man. Fucking sellout whore traitors everywhere. Recently, they’ve wrecked what was left of salon.com, as well.
I’ll keep up the fight though. There aren’t any fucking jobs, so its not like I have anything better to do.
3. G.G. Allin | May 22nd, 2012 at 6:16 am
That photo of Tully is totally revolting.
4. thomzas | May 22nd, 2012 at 6:55 am
Mike, can you email Shawn Tully and ask him if he believes exploitation exists?
I get the feeling many of these journalists don’t.
5. Zoner | May 22nd, 2012 at 9:36 am
Where’s the War Nerd? I just saw a movie that he’d probably like: WARRIORS OF THE RAINBOW: SEEDIQ BALE. It’s about these headhunters in Taiwan that fights against the Japanese in the 1930s. Plenty of decapitations and slaughter of women and children (by the heroes, no less). Apparently the Asian release was two parts but the US one mashed them both into one movie (like they did with RED CLIFF) so if you’re downloading make sure you get the right version.
6. damn red | May 22nd, 2012 at 11:00 am
You know what I find hilarious about these pieces, they read like Karl Marx 101 how to increase profits by screwing labor.
7. Anarchy Pony | May 22nd, 2012 at 2:32 pm
That’s right mother fuckers, just cut all your costs all the time, never mind when those costs represents your workers’ way of life.
When the right wing boot licking foot soldiers call workers “union thugs” I like to remind them why they might seem thuggish; because their forebears were murdered for trying to increase their standing in the world.
These “journalists” are all such spineless fucking suckups it makes me sick. Doing nothing but creating cults of personality out of CEOs.
8. Mike C. | May 22nd, 2012 at 4:30 pm
From talking to people, I think the tide is turning against idiots like these. It’s gotten unavoidably obvious they’re neither creating jobs, nor improving anything in the country/world.
They got too greedy. Now the average person is either unemployed, in unsurmountable debt, or foreclosed on—or has a friend or family member who is. They’ve gone from peddling the otherness of the poor to becoming the “other” themselves. The superrich are the cancer—that will become the prevailing sentiment.
9. super390 | May 22nd, 2012 at 5:32 pm
#7 and 8;
Question is, did the bad guys plan from the start for the possibility of rising anger over their actions? Clearly we can’t afford to spend enough money on the wages they pay us to keep the system going. They must think they can extract the productivity gains needed to make up the wage shortfall by rallying one group of us to herd the rest into labor… uh, debtor camps.
Got anger? Make fascism!
10. Bla | May 22nd, 2012 at 5:40 pm
When you open a Fortune magazine it makes a sickly SCHLUUUUUURRRPPPPP-ing noise.
That’s the sound of the billionaire’s blowjob you’re about to read.
11. Joe | May 22nd, 2012 at 7:37 pm
Jobs was an asshole too.
12. Krokodile | May 22nd, 2012 at 9:17 pm
Another ranking Soviet elite member.
13. Mike C. | May 22nd, 2012 at 10:12 pm
How many CEOs does it take to change a lightbulb?
Just one—to declare darkness more efficient, receive an unearned bonus, and release a ghostwritten autobiography about his masterstroke (job).
14. bulfinch | May 22nd, 2012 at 11:20 pm
He’s got the Jay Z; he’s got the Mountain Dew; the dur-HUR! smile; the Ipod; the rags-to-riches bio; AND he’s wearing his blue jeans WHEN IT ISN’T EVEN CASUAL FRIDAY?!! What is there not to worship?! Hey, America — maybe if you sell enough Amway and buy another investment property one day you can be Dave’s other next door neighbor!
I wonder if anyone else finds it weird being alive during a time when the fucker-overers are lionized rather than reviled — not just by the mainstream media, but also by your average American slob who has wet dreams about polishing Warren Buffett’s apple.
15. HueyLewis | May 23rd, 2012 at 8:31 am
“I wonder if anyone else finds it weird being alive during a time when the fucker-overers are lionized rather than reviled — not just by the mainstream media, but also by your average American slob who has wet dreams about polishing Warren Buffett’s apple.”
I find it weird, and also depressing in the extreme. I’m always amazed at how many of our fellow Americans look up to pieces of excrement like Mr. Cote and his mentor, Jack Welch.
16. signed | May 23rd, 2012 at 10:36 am
Can’t trust them Tullys.
17. Adam | May 24th, 2012 at 7:52 am
Part of the concentrated 30+ year attack on labor in this country has been through the decentralization of American communities right down to the very dreams we’re told to have while in school.
They tell us “you can be anything you want!” They encourage us to “go out and make something of yourself!”. Success has become an end in itself: Be anything you want; do anything to become it. This is what we teach our children.
And now America is a philistine shit-hole where sociopaths like Cote, ZuckerTURD, and Jobs rise to the top while the rest of us suck eggs.
18. 69 Anytime 88 On a Date | May 24th, 2012 at 9:14 am
Gosh! How shocking! You’d think “Fortune Magazine” would celebrate Emma Goldman’s birthday. And hey, how cool am I for pointing out that it’s not shocking. Someone should hire me!
19. Kyle | May 26th, 2012 at 2:51 pm
The problem is expecting anything resembling substantive journalism from Fortune magazine.
It’s always been basically People Magazine for corporate America — sunny, shallow celebrity-driven puff pieces.
20. cosima | May 27th, 2012 at 12:09 pm
Fortune listed Chesapeake Energy as one of its top companies to work for:
http://money.cnn.com/magazines/fortune/best-companies/2012/full_list/
How’s that working out? Any magazine with a list that looks like that is lacking in credibility. Echo chamber in the form of a magazine. Chesapeake’s executives reading about how fabulous they are. Honeywell’s execs doing the same. Anyone outside of those lofty circles take them seriously?
21. Hick | May 28th, 2012 at 12:12 am
#1 dangit you’re thinking of Honeybaked.
Which as a name, is open to all kinds of innuendo these herbally-friendly days…
Honeywell is actually a huge company, all kinds of military contracts, they were making computers back when they were huge room-filling things, all kinds of industrial controls, and if your house had a thermostat, it was almost certain to have been made by them. It’s one of those huge companies that the average person doesn’t think much about, but are kind of … everywhere and in everything.
22. CensusLouie | May 30th, 2012 at 12:04 pm
Fortune magazine is right up there with Men’s Health, GQ, and Sun Tzu as a guaranteed asshole alert whenever you see one on their coffee table.
23. Brian | June 6th, 2012 at 8:51 am
i’m a little ashamed that my alma mater (Univ. of New Hampshrie – also his) asked him to speak at commencement a few years ago. Nothing like a union killing and worker exploiting CEO expounding on “seeing the world” and “doing what you love” to try and paint a sunny and idealistic future for a fresh crop of young workers.
24. Miltwasright | August 23rd, 2012 at 12:15 pm
Commie punks. If you don’t like your job or pay go somewhere else to draw a paycheck. Better yet risk your own capital or time and start your own business then pay your workers more than they are worth. As a shareholder I don’t want anyone paid more than they are worth ever or for any reason. this CEO may be the only one worth his pay for busting dumb ass unions. I’m guessing the Russians or North Koreans treat there workers better? So if America treats its workers just as bad as Russia and N Korea, I’m totally kool with that.
25. Miltwasright | August 27th, 2012 at 8:22 am
Thanks for like totally improving my comments. Praised be the AEC! I unlike some people (and by some people I mean the great, wise people of the eXiled) don’t have the balls to do anything that challenges power, but I got plenty of troll-balls to post what I write and have the stones to comment on your own.
26. Dave | November 2nd, 2014 at 10:37 am
Cote wants Honeywell to be the Apple of industry giants. His off-shoring strategy rather looks like Nokia. Time will tell.
27. Goose | September 1st, 2016 at 8:51 pm
Dave Côte is fucking greedy son of a bitch