Louis Chenevert has had quite the career, from production management at General Motors to CEO of United Technologies (UTC) to an advisor for Goldman Sachs. Now we see just how the Canadian businessman did it.
It does not matter where you start out in life. The thing that truly matters is where you end up.
Louis Chênevert achieved greatness in the business world as an entrepreneur by knowing exactly what he wanted and working hard to achieve his goals. Chênevert was not born with a silver spoon in his mouth. His achievements were accomplished the old fashion way—through hard work and determination.
The Early Years
Louis Chênevert was born in Montréal, Québec, in 1958. He had a relatively normal childhood, during which he gained an interest in business and entrepreneurship at a young age. Chênevert knew that tireless dedication to his career would bring prosperity into his life. He understood that with hard work, success is bound to follow.
Chênevert attended the HEC Montréal Business School at the University of Montréal, where he majored in production management. Production management is responsible for ensuring that goods are produced with the best quality, correct quantity, at a fast speed, and at a minimum cost to allow for an overall greater profit. The efficiency of a company often relies significantly on production management, and Chênevert wanted to be a key part of company success.
First Step Forward in His Career
With his production management degree in hand, Chênevert quickly landed a job with General Motors at St. Therese, Quebec. Guy Hachey, the man who hired Chênevert, was always pleased with his decision to do so. Hachey hired Chênevert and put him in charge of the General Motors assembly line in Montréal.
Hachey and Chênevert were both young men interested in improving the company and rising through the ranks in the process.
“I was about a year-and-a-half ahead of him,” Hachey said. “Every time I got promoted, I promoted him to replace me. He’s probably the best executive who ever worked for me.”
Hachey would later go on to become the President and chief operating officer of the Bombardier Aerospace company from 2008 to 2014.
Both Chênevert and Hachey learned a lot from their time spent in the auto industry. With assembly lines building vehicles faster than you could imagine, close attention to detail was essential and decisions had to be made promptly.
“We were producing one vehicle a minute,” Hachey said. “There was so little margin for error. If you made mistakes, in an hour you could have 60 defective vehicles.”
The two men remain close friends to this day. They fondly remember the time they spent in the auto industry together. “Every time we see each other we tell funny stories and laugh so much we’re crying,” Hachey said.
Time for a Change
After being at the GM plant in Montréal for 14 years, Chênevert felt it was about time to transition to a different industry. While there is absolutely nothing wrong about factory work, the auto industry assembly line was not where Chênevert wished to spend the rest of his life.
Karl Krapek was another veteran General Motors employee who was looking for a change himself. He helped convince Chênevert that a jump to the aerospace industry was in his best interest. Krapek felt that Chênevert’s auto assembly line experience would come in handy in this specific industry. “Louis is bold and decisive and a great operator,” said Krapek.
Interestingly enough, Krapek would go on to become president and chief operating officer at United Technologies Corporation (UTC) from 1999 to 2002 until he decided to retire.
With that support, Chênevert confidently decided to make the transition to the aerospace industry. He officially joined Pratt & Whitney Canada (PWC) in 1993. PWC is an aircraft engine manufacturer based in Canada, just outside of Montréal. It is a division of the larger Pratt & Whitney (P&W) company based in the United States. P&W itself is a business unit contained within the United Technologies Corporation (UTC).
PWC and P&W had two slightly different goals that set them apart. When Chênevert joined PWC, the company’s mission was to create smaller aircraft engines, while P&W as a whole was set on developing and manufacturing larger engines instead.
In 1996, Chênevert was ready to take another major step forward, but it meant leaving PWC. The executive vice president for operations was retiring at P&W and Chênevert was chosen to succeed him. Chênevert had been doing something similar with PWC, and the larger P&W had taken notice of his accomplishments.
At PWC, Chênevert cut manufacturing costs by 10 percent in just one year. As a plus, he used his knowledge concerning assembly lines to speed up the process of building an engine. With his alterations, it now took the company only nine months to construct an engine instead of the two years it took before.
It took only three more years before Chênevert was named President of P&W in 1999. When Chênevert took over P&W in 1999, the company was not doing as well as it would have liked. Through his leadership, dedication to exploring new technology, and masterful efficiency, Chênevert started making the company profitable again. He was accomplishing the same financial goals he did at PWC, and he was turning some heads with the parent company, UTC. While the market at the time was on a serious downturn, Chênevert made a series of improvements to P&W as a way to insulate them from losses that most companies were sustaining.
P&W aircraft engines are used in both civilian and military aviation. The company has profitable contracts in both fields as it designs, manufactures, and services all aircraft engines and auxiliary power units. It is one of the world leaders in the industry as it routinely makes over one billion dollars profit every year.
In fact, P&W currently has over 33,000 employees within all of its departments. Being put in charge of the company after only having been there for a short amount of time was quite the accomplishment for Chênevert.
With P&W being a subsidiary of UTC, the multinational conglomerate parent company came asking for Chênevert’s services, as his changes had a noticeable benefit at P&W.
During this time, Chênevert realized that the geared turbofan (GTF) engine had the potential to be something much bigger down the road. He felt it would become a staple product of the company. However, he had to move on, so Chênevert stuck the GTF engine plan in the back of his mind and joined UTC as chairman of the corporation in 2006.
Coming to UTC was like getting called up to the big leagues for Chênevert. The corporation was not just involved in the aerospace industry, but also offered a variety of other technical products as well.
UTC makes available security systems, elevators and escalators, HVACs, and aircraft engines through other companies that they own. All of these subsidiaries are or were multibillion-dollar companies. During that same year he moved up from P&W, Chênevert moved into a director position for UTC.
It was at this time that Chênevert felt that UTC should invest heavily in the GTF engine. He knew in his heart that it would revolutionize the aviation industry.
Over the years, UTC would invest $10 billion into designing and developing the geared turbofan engine. While the program was initially criticized because of its cost, and many thought of it as Chênevert’s pet project, the company has since recognized its benefit and P&W now has a major product in the geared turbofan engine market. This was vital because it put P&W back on the map in the engine market, in which the company’s role had been greatly diminished since the 1980s.
The geared turbofan engine was constructed to reduce fuel consumption by 16 percent and emissions by 50 percent. Additionally, the GTF engine resulted in 20 percent better fuel burn, 50 percent reduced noise, and 30 percent fewer parts. You can see why Chênevert felt so strongly about the GTF. It paid off for the company in a huge way down the road. The GTF is now flown by more than 14 airlines on over 70 aircraft.
A Skilled Leader
In April 2008, less than two short years after becoming a director, Chênevert was fortunate enough to be named the CEO and president of UTC. His predecessor, the legendary George David, was retiring after 16 years at the helm. During David’s reign, UTC had done very well overall. He was incredibly impressed with Chênevert’s knowledge and dedication and knew the company would be in good hands.
“I can go into a factory and in 15 minutes tell you whether things are working right. It takes Louis 15 seconds,” David said in admiration of his successor.
Chênevert looked forward to the challenge. “Today, UTC is a high-performance organization and I am excited to have the opportunity to lead it into the future. I’m confident in UTC’s future because of our market-leading businesses, unmatched portfolio of products, and strong leadership team,” he said when asked about his promotion.
Chênevert quickly made some changes that he felt were in the best interests of UTC. While other companies were having their products made in other countries because it was cheaper than having them built in the United States, Chênevert insisted on moving all production back home. He felt that cheap labor would result in cheap products. He knew that UTC needed to keep on developing quality products, and it was easier to keep on top of things when production was located in the same country.
UTC even made offers to the current engineers and workers that the company would move them to its home state of Connecticut. With all the top minds in one place, Chênevert felt UTC could solve any problem and create exciting products that would continue to help the company grow. He felt that, as a company, it was much more efficient to have everyone under one roof instead of being scattered around the country. He was taking his efficiency knowledge he gained as Production Manager in the auto industry assembly line and applying it to suit UTC’s needs. Chênevert knew that to be productive as a company changes were needed.
“Relentless focus and open thinking combined with walking around, eliminating the roadblocks, and always thinking big. Celebrate and support those who surface issues early. Surround yourself with winners. You are only as good as the sum of your team,” he said when speaking of strategies that produce success.
With UTC looking to rebound a bit after the last couple years, Chênevert was a welcome change. He kept his options open and listened to suggestions from his expertly-skilled staff.
Chênevert had a strong view of how the company can come together, “as CEO of a multinational global company, many ideas were brought with the key executives, strategic small group in a small team, with a profound understanding of customer needs and a passion to deliver game-changing products in a 30-year product cycle. That approach would drive profound change combined with making acquisitions that would strengthen the portfolio.”
During the six years he spent in charge of UTC, Chênevert had many successes. He was, undoubtedly, the captain of the ship, but he also looked to his team for support. With his guidance, UTC was able to achieve an immense amount of success in that relatively short period of time.
Just recently, the conglomerate was able to land a $240 million-dollar contract with the U.S. Navy because of the work Chênevert and his team did with the F135 engine. But there were numerous other highly-notable achievements during his years.
Perhaps Chênevert’s best move was to acquire Goodrich Corporation, aerospace manufacturing company. After months and months of negotiations, the Goodrich Corporation was acquired by UTC for $18 billion.
When all was said and done, this move had transformed UTC into an even bigger juggernaut than the company was previously. In 2008, when Chênevert took over, UTC stock price was at $37 a share. In 2014, when he decided to retire, the stock had increased to $117 a share.
Chênevert abruptly retired in November of 2014, at the age of 57, and left UTC flying on top. During the time under his leadership, UTC was perhaps one of the most profitable conglomerates in the United States. He delivered an 84 percent total return to shareholders, which is about 20 points higher than what the S&P 500 was doing at the time.
Under Chênevert, United Technologies was set up for success in its future endeavors and would continue to reign as a profitable conglomerate in America.
Retirement, if Only for a Bit
Although Chênevert retired from UTC in 2014, he still felt the need to keep himself busy. He took the free time he now found himself with to explore hobbies and interests that he had previously been unable to cultivate.
Chênevert is also the chairman of the advisory board at the Yale Cancer Center. The advisory board is a group of active, caring volunteers that act as advocates for the facility. They also work with fundraising activities that support the Yale Cancer Center immensely.
“Louis has been a tremendous supporter of Yale Cancer Center and shares our continued commitment to ensuring that residents of Connecticut have access to the newest cancer therapies and best care possible. I am honored to have his leadership as Chair of our Advisory Board,” said Thomas J. Lynch, MD, director of Yale Cancer Center and physician-in-chief of Smilow Cancer Hospital at Yale-New Haven.
Chênevert holds two honorary degrees. In May 2011, Chênevert received a doctorate honoris causa from the Canadian business school HEC Montréal. HEC Montréal is the graduate business school of the Université de Montréal and the first established school of management in Canada. In June 2014, Chênevert received a doctorate honoris causa from Concordia University. Concordia is consistently ranked within top 10 Canadian business schools and top 100 business schools worldwide.
Both schools recognized Chênevert as a distinguished leader in the aerospace industry—someone who has had a remarkable career of achievement. Although he only received a bachelor’s degree during his college career, he has gained more than enough hands-on experience in the automotive and aircraft industries when it comes to leading a multinational business.
“His leadership, his outstanding dedication and his constant drive to increase productivity and product quality all contributed to this exceptional manager’s meteoric rise through the professional ranks,” emphasized HEC Montréal Director Michel Patry.
Only ten months after Chênevert’s surprising retirement from UTC, he decided to accept a position as a senior industry advisor to the Goldman Sachs Merchant Banking Division. Goldman Sachs is the largest multinational investment bank in the United States with assets at approximately $916 billion.
Chênevert was specifically hired because of his knowledge in the aerospace and industrial sectors. Knowing what to invest in with aviation and aerospace could come in handy with the Wall Street bank.
Although Chênevert has officially retired, it will still be interesting to see what is in store for him next. Never one to sit still, there is probably another adventure waiting for him around the corner. Only time will tell what that may be.