Louis Chenevert has been called a business legend by Forbes magazine. This is mainly due to his work while he served as the Chief Executive Officer of United Technologies Corporation. During his time there, he successfully raised the stock price from $37 a share to $117 a share, and this was accomplished during the global recession of the early 2000’s. Very few people can do this, which is why Louis Chenevert is the master of business.
When Forbes.com interviewed him, they asked what he had done to make the company so successful while other aerospace manufacturers were declaring bankruptcy. Louis Chenevert explained to them that he simply implemented two basic business practices, decrease needless spending and increase your profit.
Louis Chenevert was able to decrease the needless spending by focusing on two things. The first thing was the fines that UTC paid out annually because they were breaking environmental laws in North America. These fines were costing United Technologies Corporation nearly $10 million a year. Louis Chenevert worked with the engineers to decrease factory water consumption by 53%. Also, by using new and improved filters, the factories were able to emit 27% fewer gas emissions.
Louis Chenevert also decreased spending within United Technologies Corporation’s infrastructure. Each year, UTC was spending $15 million to transport goods between their own factories. By moving the factories closer to the headquarters in Stamford, Connecticut, UTC was able to save money and begin investing it in purchasing other profitable companies.
Louis Chenevert spent time focusing not only on decreasing spending but also increasing the money coming in. He knew that during the recession very few companies and countries could afford to purchase aerospace geat off of United Technologies Corporation. While the world would eventually turn around, UTC needed money in the present.
Louis Chenevert set out to purchase three companies that would keep UTC afloat. The first company was Pratt & Whitney which granted UTC very lucrative military contracts. The second company was Otis which granted UTC access to other corporations’ infrastructure. The last was Goodrich which allowed UTC to do business overseas.