CNBC Exclusive: CNBC Transcript: United Technologies CEO Gregory Hayes Speaks with CNBC’s “Squawk on the Street” Today

WHEN: Today, Tuesday, February 23rd

WHERE: CNBC's "Squawk on the Street"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with United Technologies CEO Gregory Hayes on CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET) today, Tuesday, February 23rd. Following are links to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000496137 and http://video.cnbc.com/gallery/?video=3000496143.

All references must be sourced to CNBC.

DAVID FABER: UNITED TECHNOLOGIES IS REBUFFING HONEYWELL'S OFFER TO PAY $108 A SHARE FOR THE COMPANY, SAYING THE ANTITRUST HURDLES IN A POTENTIAL DEAL WOULD SIMPLY BE TOO BIG. I BROKE THE NEWS OF THE DEAL YESTERDAY ABOUT THE LATEST TALKS BETWEEN THESE TWO INDUSTRIAL GIANTS. AN OFFER FROM HONEYWELL LAST WEEK THAT INCLUDED $42 A SHARE IN CASH AND A 22% PREMIUM THAT ACCORDING TO PEOPLE FAMILIAR WITH THE CONVERSATION. NOW, IT'S BEEN AN OFF AGAIN/ON AGAIN COURTSHIP BETWEEN THESE TWO COMPANIES THAT ACTUALLY BEGAN LAST APRIL. GREG HAYES IS THE CEO OF UNITED TECHNOLOGIES. WE ARE VERY HAPPY TO HAVE HIM JOIN US RIGHT HERE AT POST 9 THIS MORNING. THANKS FOR MAKING THE TRIP DOWN.

GREGORY HAYES: DAVID, THANKS FOR HAVING ME.

FABER: THE HONEYWELL SIDE, FROM THE PEOPLE I'VE SPOKEN TO RECENTLY TOOK SOME EXCEPTION TO THE LANGUAGE IN YOUR PRESS RELEASE LATE YESTERDAY IN WHICH YOU DESCRIBE PREVIOUS CONVERSATIONS AS PRELIMINARY, EXPLORATORY AND A RANGE OF COLLABORATIVE OPTIONS. THEY TELL ME MR HAYES THAT IN FACT YOU HAD VERY FORMAL CONVERSATIONS LAST APRIL AND MAY ABOUT A MERGER OF EQUALS THAT INCLUDED BOARD COMPOSITION, STRUCTURE, FREE MODIFICATIONS OF THAT STRUCTURE AND 16 ENGAGEMENTS FOR THREE MONTHS. THAT SOUNDS A LOT MORE SERIOUS.

HAYES: WELL, FIRST OF ALL, DAVID, LET ME SET THE RECORD STRAIGHT. WE DID START THESE DISCUSSIONS BACK IN APRIL. I STARTED THEM WITH DAVID WE WERE IN A MEETING, WE MET AGAIN IN MAY AND WE MET AGAIN IN JULY. WHAT BECAME APPARENT, WHILE NO ONE WOULD ARGUE ABOUT THE MERITS OF PUTTING THESE GREAT BUSINESSES TOGETHER WHAT BECAME VERY APPARENT TO US IS THAT IT JUST CAN'T HAPPEN, CAN'T HAPPEN FROM A REGULATORY STANDPOINT FROM A CUSTOMER STANDPOINT. THERE'S JUST NO PATH FORWARD THAT WE COULD SEE. THIS IS LAST JULY. AFTER THAT, MR. CODY CAME BACK TO US IN LATE SEPTEMBER, SEPTEMBER 30THSENT US A LETTER PROPOSING A MERGER OF EQUALS. OUR BOARD EVALUATED THAT PROPOSAL. WE ELECTED NOT TO MOVE FORWARD FOR THOSE SAME REASONS, PRIMARILY REGULATORY. BUT IT WAS REGULATORY, IT WAS GOVERNANCE AND IT WAS VALUE. LAST WEEK DAVE CAME BACK AGAIN WITH A DIFFERENT OFFER, A LITTLE BIT MORE ON THE VALUE SIDE. DIDN'T REALLY GET INTO THE GOVERNANCE. BUT NOTHING DIFFERENT ON THE REGULATORY SIDE. WHEN OUR BOARD HAD THESE DISCUSSIONS, THERE'S NO CHANGE TO OUR VIEW. YOU JUST CAN'T GET THIS DEAL DONE. AS MUCH AS IT MAY MAKE SENSE IN A HEADLINE, THERE'S JUST NO WAY TO GET IT DONE.

FABER: PEOPLE CLOSE TO HONEYWELL TELL ME THAT YOU GUYS WERE HAVING YOUR INITIAL CONVERSATIONS THE ONES THAT WERE INITIATED BY YOU LAST APRIL AND MAY, YOU WERE NOT FOCUSED ON ANTITRUST. THAT IN FACT YOU WERE DEALING WITH A LOT OF OTHER POTENTIAL ISSUES, INCLUDING BOARD COMPOSITION, MANAGEMENT STRUCTURE, BUT THAT IT ONLY CAME UP WHEN YOU GUYS HAD BEEN ON THE DEFENSIVE THAT IT REALLY WASN'T A CONCERN WHEN YOU WERE INITIATING THE CONVERSATION.

HAYES: CLEARLY WE LAID OUT UP FRONT THERE WOULD BE AN ISSUE ON REGULATORY APPROVAL. AND I THINK AS THE YEAR WENT BY, ESPECIALLY AS WE STARTED HEARING FROM CUSTOMERS AND WE SAW WHAT WAS HAPPENING IN THE U.S., WE SAW WHAT WAS HAPPEINING IN THE EU, IT BECAME VERY APPARENT TO US THAT THIS DEAL WAS VERY DIFFICULT. THIS IS NOT JUST SOMETHING THAT WE CAME UP WITH OURSELVES. WE ACTUALLY WENT OUT AND WE HAD A BLUE CHIP LAW FIRM IN NEW YORK OPINE ON IT. WE HAVE GONE BACK TO TWO OTHER BLUE CHIP LAW FIRMS. I ACTUALLY SAW ON CNBC EARLIER THIS MORNING MAYBE I SHOULD HIRE HER TO LOOK AT THIS AS WELL, IT'S APPARENT IT'S VERY HARD TO DO THE DEAL.

FABER: WHAT DID THEY SAY, WHEN YOU WENT TO THESE LAW FIRMS? CAN YOU SHARE WHO THEY ARE?

HAYES: SO WHAT THEY BOTTOM LINE SAID IT WOULD BE IRRESPONSIBLE FOR US TO PURSUE THE MERGER BECAUSE OF THE POTENTIAL DESTRUCTION IN VALUE, THE DISTRACTION FROM WHAT WE ARE TRYING TO DO ON A LONG TERM BASIS WITH UTC. KEEP IN MIND WE'RE JUST IN THE PROCESS OF REINVIGORATING UTC. WE HAVE A BRAND-NEW GEAR TURBO FAN ENGINE, WE'VE GOT 7000 ORDERS WE'RE IN THE MIDDLE OF A BIG RAMP-UP IN PRODUCTION, WE'RE GOING TO BE BUILDING 1,000 OF THESE ENGINES IN A COUPLE YEARS. THE THOUGHT OF TRYING TO DISTRACT EVERYBODY WITH A MERGER DOESN'T MAKE SENSE. ESPECIALLY A MERGER THAT REALLY IS UNLIKELY TO OCCUR.

FABER: RIGHT NOW CHRISTINE VARNEY OF COURSE WHO RAN ANTITRUST WITH THE DEPARTMENT OF JUSTICE, NOW A LAWYER AT KORVATH. SHE SAYS SOMETHING DIFFERENT, IN FACT, THEY'RE ADVISING HONEYWELL THAT 4% OF SALES OR LESS WOULD BE AFFECTED BY AN OVERLAP AND DIVESTITURE WOULD ONLY HAVE TO BE BETWEEN 2 BILLION AND $4 BILLION. ANOTHER WELL RESPECTED LAW FIRM HERE, SOMEONE WHO RAN THE DOJ'S M&A ANTITRUST DIVISION SEEMS TO DISAGREE.

HAYES: LET ME BE MORE SPECIFIC THEN. IF YOU THINK ABOUT THE AERO BUSINESSES, IF YOU COMBINE HONEYWELL AND UTC AEROBUSINESS YOU END UP WITH A $50 BILLION SYSTEM PROVIDER EVERY SINGLE SYSTEM NOSE TO TAIL ON AN AIRCRAFT, WHEN YOU TALK TO CUSTOMERS, THAT'S THE LAST THING THEY WANT. IN FACT WE GOT PUSH BACK WHEN WE HAD THE GOODRICH DEAL AND WE CREATED AEROCRAFT SYSTEMS BUSINESS BECAUSE, THEY THOUGHT WE HAD TOO MUCH PRICING POWER IN THE MARKETPLACE. CUSTOMERS WOULD PUSH BACK. I CAN GO TO MIDTOWN MANHATTAN AND I CAN FIND SOME LAWYERS WHO WOULD TELL ME THAT BOEING AND AIRBUS CAN MERGE AND THEY COULD GET IT THROUGH. THE FACT OF THE MATTER IS I THINK THE LAW FIRMS THAT WE HAVE EMPLOYED TOP NOTCH BLUE CHIP LAW FIRMS AND GAVE US GOOD ADVICE.

CRAMER: LET ME ASK YOU GREG THERE IS A COMPANY – A COMPANY, IT'S NAME IS BOEING. IT HAS PARTNERS FOR SUCCESS. WHEN I SPEAK WITH THE SO-CALLED PARTNERS, EVERYONE SAYS THE SAME THING, THEY'RE A LITTLE BIT AFRAID TO SAY IT ON TV THAT BOEING BASICALLY TOOK ALL THE MARGIN AWAY FROM ALL THESE DIFFERENT COMPANIES, AIRBUS, INCREDIBLY DIFFICULT TO DEAL WITH. WOULDN'T THIS COMBINATION BE ABLE TO SAY TO BOEING AND AIRBUS YOU CAN'T DO THIS ANYMORE WITH YOUR PARTNERS FOR SUCCESS. IT'S TIME FOR US TO GET THE GROSS MARGIN BACK.

HAYES: I THINK THAT'S EXACT WHAT AIRBUS AND BOEING WOULD BE AFRAID OF AND EXACTLY WHY THE DEAL WOULDN'T HAPPEN.

CRAMER: WHO ARE THEY VERSUS THE CONSUMER TRYING TO GET THE PRICE OF A PLANE DOWN.

HAYES: THEY NEED TO APPROVE THE DEALS JIM. YOU CANNOT GET THE DEALS DONE WITHOUT CUSTOMER CONSENT BECAUSE ALL THE CONTRACTS HAVE CHANGE OF CONTROL IN THEM. SO LOOK POWERFUL COMBINATION, PARTNERING FOR SUCCESS, WORKING WITH AIRBUS AND BOEING ALWAYS DIFFICULT ON THE MARGIN FRONT. UTC HAS BEEN ABLE TO IN FACT PUSH BACK I THINK EFFECTIVELY AND PARTNER WITH BOEING AND AIRBUS. WE'RE NOT LOSING ALL OF OUR MARGIN. IT'S A TOUGH TOUGH BUSINESS IN AEROSPACE, BUT AGAIN I THINK THIS COMBINATION MAKES IT SO MUCH MORE DIFFICULT GOING FORWARD.

FABER: TALKING ABOUT 3.5 BILLION IN SYNERGIES IS WHAT I'M HEARINGING AGAIN FROM THE HONEYWELL SIDE.

HAYES: RIGHT.

FABER: THAT'S A HECK OF A NUMBER. MAYBE TRY TO GIVE A SHOT. IF YOU CAPITALIZE THAT NUMBER YOU GET REAL VALUE BEYOND JUST THE 22% PREMIUM

HAYES: IT COULD BE 30 BILLION.. OUR OWN VIEW IS THERE'S PROBABLY $2.5 BILLION OF SYNERGIES. WE CAN ARGUE WHETHER IT'S 2.5 OR 3.5, IF THE DEAL CAN'T GET DONE, IT DOESN'T MATTER. AND THAT'S WHAT I KEEP COMING BACK TO.

CRAMER: OK NOW BUT LET'S LOOK AT IT ANOTHER WAY DAVID COTE -- I THINK THE WORLD OF HIM. I SAID IT TO YOU A COUPLE TIMES. HE HAS A CHANCE HERE BEFORE THE GEAR TURBINE WHICH IS THE GREATEST ENGINE IN HISTORY. I'LL GIVE YOU THAT. BEFORE THAT KICKS IN, BEFORE THE RESTRUCTURING THAT YOU ARE DOING IN CLIMATE KICKS IN, BEFORE THE BIG CONTRACTS THAT WILL BE GOOD FOR OTIS KICKS IN THIS IS A GREAT TIME FOR HIM TO STRIKE, ISN'T IT? YOU COULD HAVE AN EARNINGS BREAKOUT IN 2017.

HAYES: IT'S VERY OPPORTUNISTIC OF DAVE. I DON'T BLAME HIM. WHY NOT TRY?

CRAMER: TAKE THE COMPANY FROM YOU RIGHT NOW.

HAYES: WHY NOT TRY? IT AIN'T GOING TO HAPPEN, JIM.

FABER: FOR THOSE WHO SAY, MR. HAYES, THIS IS NOT ABOUT ANTITRUST, THIS IS SIMPLY ABOUT WHO GETS THE TOP JOB AND THAT WHEN YOU GUYS MADE YOUR INITIAL INTEREST IN AN M.O.E., APPARENT LAST SPRING YOU EXPECTED YOU WOULD BE RUNNING THE COMBINED COMPANY WHEN IT WAS MADE APPARENT THERE WAS A PROBLEM THERE ON THAT, THAT'S WHEN SUDDENLY ANTITRUST BECAME AN ISSUE. AND THAT IF THEY REVERSED IT RIGHT NOW AND SAID YOU KNOW WHAT HAYES YOU GET THE JOB SUDDENLY ANITTRUST WOULD GO AWAY

HAYES: GET THE TOP JOB OF WHAT.

FABER: OF THE COMBINATION.

HAYES: YEH LOOK IT IS NOT GOING TO HAPPEN DAVID. THE FACT OF THE MATTER IS GOVERNANCE WAS ALWAYS BEEN AN ISSUE. DAVE HAS DONE A GREAT JOB AT HONEYWELL IN THESE LAST 15 YEARS. NO DOUBT ABOUT THAT. THE THOUGHT OF COMBINING THESE TWO COMPANIES INTO THIS HUNDRED BILLION DOLLAR BEHEMOTH, GREAT IDEA BUT IT'S NOT GOING TO HAPPEN. SO SPECULATING ON GOVERNANCE, SPECULATING ON VALUE, WHILE IT'S FUN, INTERESTING, SELLS NEWSPAPERS AND TV SPOTS, IT AIN'T GOING TO HAPPEN.

FABER: AND YOU THINK YOUR SHAREHOLDERS WILL AGREE WITH YOU ON THAT? THEY'LL SAY WE'RE IN YOUR CORNER ON THIS? ARE THEY FRUSTRATED GIVEN THE UNDERPERFORMANCE OF THE STOCK PRICE OVER THE LAST YEAR?

HAYES: LOOKWE'RE ALL FRUSTRATED BY THE STOCK PRICE. PART OF THAT IS ON US. WE MISSED OUR EARNINGS TARGETS LAST YEAR. SO FULL STOP. WE MISSED. WE GAVE GUIDANCE LAST JULY THAT WE HIT FOR THE FULL YEAR. WE HAVE GIVEN GOOD GUIDANCE THIS YEAR, WE THINK WE ARE GOING TO BE VERY CONSERVATIVE UP 3% TO 6% ON EARNINGS. I THINK IMPORTANTLY WHAT WE HAVE TOLD SHARE OWNERS IS UTC IS A LONG-TERM INVESTMENT THESIS. THESE ENGINES GO OUT AND THEY'RE ON WING FOR 30 YEARS. ELEVATORS YOU SERVICE FOR 50 YEARS. IN THE MEANTIME WE'RE RETURNING $22 BILLION OF CAPITAL TO OUR SHAREHOLDERS. 25% OF THE MARKET CAP OF UTC, $16 BILLION IN SHARE BUYBACK, $6 BILLION IN DIVIDEND. WE'RE DOING THE RIGHT THINGS FOR THE SHORT-TERM AND LONG-TERM.

QUINTANILLA: WHY IS THERE NO PATH TO DIVEST ASSETS AFTER A DEAL? WHY IS THAT NOT WORKABLE?

HAYES: WELL CARL, I THINK THE QUESTION REALLY IS HOW MUCH CAN YOU DIVEST, WHICH WOULD BE WE THINK BIGGER THAN WHAT HONEYWELL HAS SUGGESTED. EVEN AFTER THE DIVESTMENT, YOU STILL END UP WITH THIS AEROSPACE BEHEMOTH WITH ALL THIS PRICING POWER THAT STILL REQUIRES APPROVAL FROM YOUR CUSTOMERS. I DON'T CARE IF YOU GO TO BOEING, AIRBUS, BOMBARDIER, EMBARJER, MITSUBISHI, THEY WILL ALL HAVE THE SAME CONCERNS ABOUT THIS.

CRAMER: WELL BUT WAIT A SECOND, YOU SPENT $16.5 BILLION IN 2011 ON GOODRICH. I KNOW THESE GUYS YOU'RE TALKING ABOUT, NONE OF THEM LIKED IT, BUT NOBODY SAID A THING. YOU GOT THAT. THAT WAS A GREAT DEAL. COULDN'T THIS BE LIKE GOODRICH?

HAYES: SO GOODRICH HAD $8 BILLION IN SALES RIGHT AND IT TOOK HAMILTON SUN STREAM FROM A $6 BILLION AEROSPACE BUSINESS TO A $14 BILLION AEROSPACE BUSINESS.

CRAMER: SOME INTEGRATION ISSUES.

HAYES: YEAH, SOME ISSUES. AND IT IS HARD RIGHT. THESE DEALS ARE NOT EASY. INTEGRATION SAVINGS, SYNERGY SAVINGS HARD TO DO. NOW YOU'RE TALKING ABOUT TAKING AN AEROSPACE SYSTEMS BUSINESS OF 30 BILLION AT UTC AND MAKING IT 50 BILLION. THE OVERLAP IS TREMENDOUS. LOOK, GREAT OPPORTUNITIES. BUT IT JUST CAN'T HAPPEN.

FABER: I REALIZE A LOT CHANGES IN 16 YEARS. OF COURSE APPARENTLY FOR ME IT DOESN'T.

HAYES: YOU'RE BANKING YOUR WHOLE CAREER ON IT.

FABER: I DON'T KNOW WHAT YOU WERE DOING 16 YEARS AGO, BUT APPARENTLY YOU WERE MOVING LIKE THIS. APPARENTLY I WAS MOVING FLAT.

HAYES: I WAS ACTUALLY WORRIED ABOUT IF I WAS GOING TO HAVE A JOB AFTER THE MERGER HAPPENED.

FABER: BUT THAT'S MY POINT. A LOT HAS CHANGED SINCE THEN. BUT NONETHELESS, UTX THOUGHT THEY COULD GET A DEAL DONE BACK THEN. GE OF COURSE FOUND OUT DIFFERENTLY WHEN IT CAME TO HONEYWELL, BUT HOW MUCH HAS CHANGED THAT THE OPINION WOULD SEEMINGLY CHANGE?

HAYES: WELL I THINK IT GOES TO THE BASIC POINT IF YOU THINK ABOUT THE GE/HONEYWELL DEAL BACK IN 2001/2002, WE KNEW IT WOULD BE HARD FOR UTX TO DO THE DEAL, EVEN HARDER FOR GE WITH SOME OF THE ASSETS THAT THEY HAVE ON THE AEROSPACE SIDE, ESPECIALLY GECAS. THE LAST THING I WANT TO DO IS DECIMATE MY COMPANY THE WAY HONEYWELL WAS DECIMATED AFTER THE FAILED MERGER WITH GE BACK IN 2001/2002. DAVE TOOK OVER IN A VERY DIFFICULT SITUATION, 16, 15 YEARS AGO. DID A GREAT JOB BRINGING THE BUSINESS BACK. BUT HE HAD A TOUGH TIME FOR FIVE YEARS. AND DESTROYING THAT KIND OF VALUE IS NOT WHAT I WANT TO DO FOR THE COMPANY.

CRAMER: WELL LOOK, I WANT TO ASK ABOUT ANOTHER DIVISION. YOU'VE GOT – YOU TOLD ME PREMIUM FIRE AND SAFETY. THEY'VE GOT PREMIUM FIRE AND SAFETY. YOU PUT TOGETHER CARRIER WITH THIS CLIMATE CONTROLS. YOU TELL ME THAT'S NOT A HOME RUN? YOU WANT TO DO THAT DEAL.

HAYES: OF COURSE, JIM. I WOULD LOVE TO HAVE THEIR BUILDING CONTROLS BUSINESS BECAUSE I THINK I'VE GOT A BILLION DOLLAR BUILDING CONTROLS BUSINESS. YOU PUT THEM TOGETHER, RIGHT, THERE'S A REAL SYNERGIES THERE FROM A MARKET STANDPOINT.

CRAMER: KILLING.

HAYES: AND LOOK, NOBODY IS DISAGREEING, JIM. WE HAVE TO FIND SOMETHING ELSE TO ARGUE ABOUT.

FABER: ALRIGHT. BUT ALL THAT SAID, LAST APRIL AND MAY, YOU COME AT THEM, YOU HAVE, WHAT I'M TOLD, IS A PRETTY SIGNIFICANT DISCUSSIONS OVER 16 ENGAGEMENTS ABOUT A DEAL. THEN YOU DECIDE AGAINST IT. YOUR STOCK PRICE GETS HIT. THEY COME BACK AT YOU, THEN THEY COME BACK AGAIN. BUT WHAT I'M HEARING FROM YOU IS NO WAY, NO HOW. THIS IS SIMPLY NEVER GOING TO HAPPEN.

HAYES: IT WOULD BE IRRESPONSIBLE FOR US TO MOVE FORWARD TODAY.

CRAMER: HOW DO YOU MAKE IT RESPONSIBLE?

HAYES: JIM, I JUST DON'T THINK IT'S POSSIBLE IN THIS REGULATORY ENVIRONMENT. THERE'S OTHER THINGS TO DO FOR BOTH OF US.

CRAMER: NEW PRESIDENT COMING. YOU KNOW, ONE OF THOSE PRESIDENTS MIGHT ACTUALLY BE IN FAVOR OF THIS DEAL BECAUSE HE CAN STICK TO AIRBUS. ONE OF THOSE PRESIDENTIAL CANDIDATES WOULD BE LOVING THIS DEAL. AND HE COULD GET THE NOMINATION.

HAYES: HE MIGHT GET THE NOMINATION, BUT THAT'S IT, RIGHT?

CRAMER: WELL, I DON'T KNOW. I'M NOT A POLITICAL FELLA.

QUINTANILLA: YOU KNOW, IT'S NOT TOO OFTEN WE HAVE CEOs COME ON AND SAY WE MIGHT HAVE TOO MUCH PRICING POWER, RIGHT? YOU CAN SEE HOW THAT ARGUMENT RINGS A LITTLE ODDLY?

HAYES: OH, SURE. LOOK, CARL, WE KNEW THE MERITS OF THE DEAL UP FRONT. WE COULD SEE THE BENEFITS OF HAVING THIS KIND OF $100 BILLION BUSINESS WITH A $200 BILLION MARKET CAP. HAVING THAT KIND OF GLOBAL FOOTPRINT, HAVING THAT KIND OF GLOBAL REACH, TREMENDOUS OPPORTUNITIES FOR COST, FOR PRICING. BUT HAVING HAD CONVERSATIONS WITH OUR CUSTOMERS RECENTLY, JUST NO WAY THAT COULD HAPPEN.

FABER: SO THAT'S WHAT CHANGED FROM APRIL AND MAY?

HAYES: THAT'S WHAT CHANGED DURING THE COURSE OF LAST SUMMER. AND LOOK, OUR STOCK WENT DOWN –

FABER: NOT TO MENTION YOUR STOCK PRICE.

HAYES: OUR STOCK WENT DOWN AS WELL. BUT IT NEVER GOT TO A DISCUSSION ON VALUATION. IT NEVER GOT TO A SERIOUS DISCUSSION ON VALUATION. DAVE THREW OUT THIS NUMBER OF $42 IN CASH, AND THEN – OR 40% OF THE COMBINED COMPANIES. $36 BILLION OF ADDITIONAL DEBT. YOU DO DILUTION ON THAT DEBT IT'S LIKE ABOUT $100 A SHARE ACTUAL PRICE. AND YOU LOSE THE DEBT RATING, YOU BECOME TRIPLE B. AND OH BY THE WAY, 60% OF ALL OF OUR CASH COMES FROM OVERSEAS SO YOU CAN'T SERVICE THE DEBT. SO THERE'S MORE CHALLENGES HERE AROUND VALUATION THAN ARE REPAIRED ON THE SURFACE.

CRAMER: BUT WOULDN'T THIS BE A GREAT MOMENT – YOU KNOW, YOU'VE GOT THAT ANALYST MEETING COMING UP. WHAT IF YOU JUST TOOK YOUR NUMBERS UP RIGHT HERE RIGHT NOW. BECAUSE YOU KNOW YOUR NUMBER ESTIMATES ARE TOO LOW. JUST DO IT RIGHT NOW. IT'S GOOD, IT'S A NATIONAL FORUM.

HAYES: THANKS FOR THE OPPORTUNITY, JIM, BUT I'M GOING TO STAND BY THE GUIDANCE WE'VE GOT FOR THE YEAR.

CRAMER: BUT YOUR GUIDANCE IS LOW.

HAYES: LOOK, THIS IS NOT ABOUT 2016 FOR UTC. THIS IS ABOUT 2018, 2019. THIS IS ABOUT THE NEXT 30 YEARS FOR UTC.

FABER: WE HAVE TO GO, BUT ONE FINAL QUESTION HERE ON A COMPLETELY DIFFERENT TOPIC. BUT JUST TO END ON SOMETHING – CHINA, ELEVATORS, ARE THINGS REALLY BAD OVER THERE?

HAYES: YOU KNOW, THE MARKET IS DOWN 10%. ELEVATOR MARKET IS GOING TO BE 500,000 UNITS. IT'S STILL HALF OF THE WORLD'S ELEVATOR MANUFACTURING HAPPENS IN CHINA. SO DOWN 10% FROM LAST YEAR, MAYBE A LITTLE WORSE. PRICING IS NOT GREAT. BUT THE FUTURE REMAINS. THERE'S 20 MILLION PEOPLE A YEAR URBANIZING IN CHINA. WE'RE IN CHINA FOR THE LONG-TERM. AND THAT'S REALLY WHERE THE OPPORTUNITY IS.

QUINTANILLA: LAST THING. IS COPPER COMING BACK FOR GOOD?

HAYES: NO.

CRAMER: REALLY?

HAYES: I DON'T THINK SO. AS LONG AS CHINA REMAINS. LOOK, CHINA IS GOING FROM AN INDUSTRIAL ECONOMY TO A CONSUMER ECONOMY. AS THAT HAPPENS, LESS OF A NEED FOR SOME OF THESE COMMODITIES. I THINK LONG-TERM COMMODITIES ARE IN A DOWNWARD TREND.

CRAMER: BUT YOU KNOW FIRE AND SAFETY BETTER THAN ANYONE. THIS NEW GOVERNMENT IN CHINA, THEY MUST WANT MORE REGULAR INSPECTIONS, WHICH IS A HOME RUN FOR YOU. IS THAT TRUE OR NOT?

HAYES: IT IS ABSOLUTELY TRUE. REGULATION IS COMING TO CHINA. IT IS IMPORTANT.

CRAMER: WELL THAT'S FANTASTIC FOR YOU.

HAYES: IT IS ALL IN THE SWEET SPOT.

CRAMER: THIS COULD BE A GOOD REASON TO TAKE UP NUMBERS RIGHT HERE.

HAYES: THANKS, JIM.

FABER: ALRIGHT, WELL LISTEN, THANK YOU. MR. HAYES FOR COMING DOWN.

HAYES: DAVID, PLEASURE. CALL ME GREG.THANK YOU, DAVID.

FABER: WE APPRECIATE IT.

CRAMER: GOT TO TRY.

HAYES: GOT TO TRY.

FABER: ABSOLUTELY, POSITIVELY NO WAY SAYS MR. HAYES ABOUT A HONEYWELL/UTX DEAL. THANK YOU.

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