Report: Louis R. Chênevert, United Technologies Corporation Essay
Report: Louis R. Chênevert, United Technologies Corporation
Louis R. Chênevert was born in 1958 in the Quebec province of Canada. Raised on the outskirts of Montreal, Chênevert spent his childhood and adolescent years close to his community. With close ties to the area, he attended the University of Montreal. In 1979, he graduated with a bachelor of commerce in product management. Upon graduating, Chênevert was hired by the General Motors Corporation in St. Therese, a suburb of Montreal. From 1980 to 1994, Chênevert spent the duration of his primary career at General Motors. During his employment, he continually pursued challenging positions. Before resigning in 1994, he achieved the position of Production General Manager; he was promoted to this position when he was only 33 years old. His pursuit of attaining challenging executive management positions did not end there; it was only the beginning. After resigning from General Motors, Chênevert accepted the position as Vice President of Operations at Pratt & Whitney Canada, a subsidiary of the United Technologies Corporation, UTC.
While in Canada from 1994 to 1997, Chênevert instituted what is called lean manufacturing principles; these principles immensely enhanced the plant’s efficiency. In turn, these principles stream lined operations and made the Canadian sister company of Pratt and Whitney a profitable business. In 1995, he was recognized by Quebec with the Nouveaux Performant award for “outstanding young leaders.” (Bloomberg/Businessweek) As Vice President of the Canadian operation of Pratt & Whitney, Chênevert gained the respect of his fellow peers, and gained recognition by the executive management team of UTC. From 1997 through 2006, Chênevert significantly ascended the corporate ladder. In 1997, he was appointed as the executive vice president of operations and aftermarket services for Pratt & Whitney’s Connecticut operations. This appointment laid the ground work in obtaining a thorough understanding of the core subsidiary business of UTC. In 1998, he was promoted to President of Pratt & Whitney’s Connecticut operations.
And in 2006, Chênevert continued his upward ascent in executive management as he became Chief Operating Officer of UTC. After becoming Chief Operating Officer, Chênevert was groomed to be the successor of the then current CEO and Chairman, George David. David took Chênevert as his apprentice to prove to Wall Street and investors that Chênevert had what it took to run a successful operation. (Wall Street Journal, On-Line) After two years of grooming, George David stepped down and handed the reins of the technology conglomerate to Chênevert. The successful mentorship by George David, and quick study by Chênevert, provided a smooth transition from one CEO to another. On April 9, 2008, Louis R. Chênevert was appointed Chief Executive Officer and Chairman of UTC. Since his inception, UTC has diversified their portfolio with technology related mergers to further allow them to position themselves globally as a leader in the technology field. This diversification of UTC’s portfolio has allowed UTC to weather the current economic downturn better than many other corporations.
His current yearly compensation of $1,435,000 is not merely as much as his bonus of $1,700,000. He was rewarded with $6,217,560. in restricted stock awards, and $11,149,152 in other compensation. His total compensation for 2009 ranked him 41st in CEO payout. (Forbes.com, CEO Compensation) What I find most striking about Louis R. Chênevert’s role as a leader is his ability to leverage his experience from the past while listening attentively to his peers to make solid decisive business decisions. This approach allows him to make informed decisions when uncertainty is looming. He presents himself as an authority, yet conveys this authority politically correct. His professional business etiquette portrays him as a man of distinction. Besides having these strong leadership traits, his in-depth involvement as a philanthropist goes beyond giving exuberant donations. Chênevert becomes deeply involved in monitoring how his donations are used.
His work-social life balance projects an admirable image beyond that of a typical CEO. Outwardly, he conveys a confident distinguished image with an old world style mannerism. He is a CEO for our times. He combines the distinctive traits of listening, decisiveness, and philanthropy to leverage his authority in conducting sound decisions while keeping a positive outlook. He is a combination of many traits, but remains conservative in his approach to work. In such volatile economic times that we face today, Chênevert has the leadership skills needed to successfully run this corporation while pursuing meaningful philanthropic obligations outside of the norm. Chênevert’s ability to leverage his experience comes from a thorough understanding of the business because he started at the bottom and worked his way up. This experience has allowed him to turn companies around during economic downturns while maintaining a positive attitude and workforce. This ability to see positive in unlikely situations has always found favor with fellow workers and shareholders.
Bloomberg News recently interviewed Chênevert who made the remark that “Bombardier has a ‘full pipeline’ of potential C-Series customers and expects order announcements by year-end.” (Bloomberg 09-01-10) Pratt and Whitney has been on the losing end of its share of commercial customers, but this news brings enthusiasm to their workers for developing the engines which will keep Pratt and Whitney in the commercial jet engine business. Not only has this re-invigorated the workforce in these unprecedented economic times, but it has kept UTC’s stock price in good standing when other companies are struggling. Chênevert seems to always find a way with words even when faced with downsizing to stay competitive. In a recent article in “Aviation Week”, Chênevert exclaimed “our results and diversified portfolio show Pratt is well positioned to withstand the tough times we have in front of us in the next few months. It’s a good position to be in.” (Aviation Week, Morris)
However, Chênevert’s restructuring efforts for increased profitability has not always been favorable with fellow workers or local politicians. In order for UTC to stay within operating budgets, he was tasked with slashing thousands of jobs in Connecticut. While facing uncertainty in the current economic recession, the decision to downsize further was a decision he had to make immediately—and he did. This decision did not sit well with the Connecticut legislature either, but as Chênevert explained, difficult times meant making difficult decisions to keep the corporation profitable. His experience from the past has led Pratt back to profitability while keeping the workforce and shareholders thinking positively. Chênevert has always been known to give direction decisively in times of uncertainty.
His ability to make hard decisions has proven his leadership ability. In difficult economic times, Chênevert was able to make the tough decisions immediately to keep UTC in a positive profit margin. Tough choices need to be made and Chênevert is no stranger to that. From his beginnings with UTC, Chênevert has had to make tough choices regarding employee restructuring. When he became Vice President of operations in 1993 at Pratt and Whitney Canada, he faced poor financial performance with low employee morale. His decision to restructure with changes in key management positions allowed Pratt Canada to rebound from a negatively performing business unit with low employee morale. This restructuring event led to positive financial results with higher than expected employee morale. Pratt and Whitney Canada is now considered one of the best Pratt facilities to work at.
Besides restructuring at Pratt and Whitney Canada, Chênevert’s role with investing in new technologies in Connecticut and driving the pursuit of quality excellence through UTC’s ACE, (Achieving Competitive Excellence) operating system has allowed Pratt and Whitney to exceed their financial and quality goals over the past couple of years. His focus on continued implementation and promotion of this system at a time of turmoil may have seemed to be risky, however, the results of doing so have been rewarding. Chênevert understands competitiveness cannot be achieved without taking risks, and he understands inaction only leads to poor performance. From an online April 2008 Wall Street journal article titled, UTC, Textron profits get a lift from aerospace, Chênevert boasts “this quarter’s results are further evidence that our business model, with its focus on global growth through market-leading franchises and cost reduction through the implementation of the ACE operating system, can deliver solid results even in a softening economic environment.”
Chênevert’s persistence in promoting continuous improvement is a testament to his ability to make difficult decisions in times of uncertainty. This approach to making informed decisions decisively shows his focus towards success. Furthermore, Chênevert’s dedication to society through his commitment to charitable organizations, and investment in local and national interests goes beyond a good will gesture. He is recognized as a leader in all aspects of society. Chênevert is an advisory member to several other boards within the local community and abroad. He is an avid advocate of cancer research and is heavily involved with getting funding to the appropriate research programs and projects. In a Yale Medical Publication, Chênevert is recognized as not only a contributor, but a man who asks probing questions to further cancer research and give the patient the best care possible. Dr Richard L. Edelson says, “He understands the importance of having all the services for cancer patients in the same place, rather than dispersed throughout the medical center.” (Medicine @ Yale) Chênevert gets involved.
He listens, and gets results. His ability to put himself in other people’s places allows him to make great decisions regarding any endeavor he gets involved with. His dedication to the well being of local organizations is yet another testament to his leadership ability. There are skilled CEOs with exceptional experience, and there are also skilled CEOs with minimal experience. Very few have the varied traits and experience to perform at exceptional levels. Chênevert has both these traits plus a new world ideology that allows him to operate in the toughest of economic times. I consider Chênevert more than a business leader; he is multi faceted dynamic entrepreneur.
Throughout Chênevert’s career, he has been called upon to make change with every organization he has ever been affiliated with. Whether business or civic, his positive can do attitude has been a guiding light for his corporation and others to follow. He will lead UTC, and all organizations he is involved with to a new level of prosperity and good will. His ambition towards getting things right is no less than remarkable. Although new to the CEO position, Chênevert will be recognized for his persistence of pursuing to understand, and executing decisively for results. In these unprecedented economic times, Chênevert has the experience a corporation needs to not only withstand the current economic downturn, but to come out of it stronger than when it began. His ethical and moral values as a business leader and philanthropist should be a model other CEOs should follow for our country to once again lead in economic prosperity.
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Layne, Richard. “Bombardier Posts Quarterly Earnings of 8 Cents a Share,
Matching Estimates.” http://www.bloomberg.com/news/2010-09-01/bombardier-net-drops-27-percent-as-jet-deliveries-decline.html. Sept 1, 2010.
Lunsford, Lynn. “Prepping a Successor to UTC’s David.” Wall Street Journal Online. http://online.wsj.com/article/SB120768855981199187.html. April 9, 2008.
Morris, John. “Louis Chenevert, President & CEO, Pratt & Whitney.” Aviation Week. http://www.aviationweek.com/shownews/02asial/newsmk10.htm.
Medicine @ Yale. “Quick Study, bighearted contributor.” Vol 4. Issue 4. Sept/Oct 2008. http://www.medicineatyale.org/v4i4_sept_oct_2008/sept_oct_08.pdf.
United Technologies Corp. UTX:New York. Bloomberg Business Week. http://investing.businessweek.com/research/stocks/people/person.asp?personId=191172&ticker=UTX:US.