Canadian businessman Louis Chenevert has had a profound impact on every business organization that he has been a part of. Now semi-retired, Chenevert primarily spends his time as an exclusive advisor for Goldman Sachs, as well as pursuing personal interests and spending time with his family. But what was this business genius doing before he retired from the aerospace industry? Quite simply, he was changing the way businesses handled production, more specifically, he changed the way the aerospace industry worked forever.
Chenevert’s origin story is rather straightforward. He got his start working with General
Motors after obtaining a production management degree from HEC Montreal. His work at General Motors was extremely productive, and he ascended through the company rather quickly, securing the position of production manager. He eventually landed a position as the Production General Manager, where he would oversee production on a larger scale within the company, where he would work for 14 years.
As Chenevert continued to work, an opportunity to move into a different field came up. Pratt & Whitney, an aerospace manufacturer, was in need of a real change of leadership. In 1993, Louis Chenevert made the leap from GM to work for Pratt and Whitney in their Canadian branch. The economy at the time wasn’t working terribly well for the company, but thanks to Chenevert’s hard work and insights, he was able to guide the company to improve their processes. Their market share in the aerospace industry began to expand and within six short years, Chenevert found himself elected as the company’s president.
However, Pratt & Whitney is not a stand alone company. They were the subsidiary of United Technologies Corporation (UTC), a multinational corporation that worked with both civilian and military economies, producing a wide variety of products, such as security systems, elevators, HVACs, and, of course, aircraft engines. UTC was fiercely competitive, but like most businesses in 2006, was a victim of the serious economic recession at the time.
Louis Chenevert’s work in making Pratt & Whitney profitable and efficient in its productivity turned some heads at UTC and, in 2006, he was elected as the Chairman of the corporation, and quickly ascended to the role of CEO. While the market economy was on a serious downturn, Chenevert made a series of improvements to his organization as a means to insulate them from the profit losses that most companies were sustaining.
One major strategy that Chenevert undertook was ignoring the conventional wisdom surrounding outsourcing. While most companies at the time were fiercely cutting costs by outsourcing their workers, moving production to countries that were willing to work for cheap, Chenevert chose instead to move production into the United States. The reasoning was that most cheap labor would produce cheap products, so instead, UTC made an offer to move engineers and workers into a centralized location, moving them to their home state of Connecticut. The purpose of this operation was to put all of the top minds and workers in one area where they could focus on solving problems together. This was far more efficient than having multiple divisions scattered across the country.
This didn’t appear to be a very cost effective solution, as most businesses were of the opinion that cheap, foreign labor was the best way to go, but this would have diminished the quality of production. Instead, UTC was able to keep themselves afloat during the hard times of the Great Recession and were even able to increase the value of their stock over the course of Chenevert’s leadership to $117 dollars a share. Contrast this with their original stock price of $37 a share and you can see that Louis Chenevert had a profound impact on UTC.
Perhaps one of Louis Chenevert’s greatest achievements was the arrangement of the acquisition of the Goodrich Corporation. Goodrich was an aerospace manufacturing company that had previously been one of the largest rubber manufacturer’s in the world. The decision to acquire Goodrich was primarily to get its hands on a aircraft component manufacturer, which would reduce internal costs of production and expand their market share even greater. Of course, a deal like this wouldn’t be easy to handle and Louis Chenevert spent an entire year overseeing this purchase, negotiation and discussing the details with Goodrich until they were finally able to come to an agreement. In 2011, UTC paid $18.4 billion to acquire Goodrich, absorbing it into their company and combining it with another property to turn it into UTC aerospace systems. This would turn UTC into a multinational conglomeration, giving them a high level of market dominance across the entire world.
In 2014, Louis Chenevert stunned the world when he announced that he was planning
on stepping down from his role as CEO of United Technologies. The fact that the
company was doing so well caused many people to question the decision. There
were no scandals, no failures, no public humiliation, so why would Louis Chenevert choose to step down after working so diligently on such an astounding company? He decided that he would prefer to live the life of semi-retirement, joining Goldman Sachs as an Exclusive Advisor, working to help them make good financial decisions regarding the aerospace industry. Of course, he left on a high note with UTC, having profoundly created a company legacy that will forever echo with them.
More importantly, Louis Chenevert now has the time needed to pursue after his passions, mainly engineering and designing yachts. Never one to do a half job, he rolled up his sleeves and set about working to design the best possible yacht that he could, leading to the design and construction of three different yachts. So not only does he get to enjoy his retirement, he still focuses on the things that matter most to him, production and design. Of course, he’s no longer working on improving corporations, but rather is enjoying the sun and water as he personally tests each yacht that he has designed. Truly, Louis Chenevert’s leadership, intelligence and perseverance have led him to be considered a captain of the aerospace industry.