US ‘Needs to Get Going on Debt’: Honeywell CEO

Honeywell Chairman and CEO Dave Cote
Dibyangshu Sarkar | AFP | Getty Images
Honeywell Chairman and CEO Dave Cote

In the midst of all the U.S. debt talk going on, David Cote, chairman and CEO of Honeywell, only had one thing to say. “We need to start moving,” he said Wednesday on CNBC’s “Mad Money.”

Cote, who is also an economic adviser on President Barack Obama’s debt commission, said that with the growing competitiveness in countries around the world, the U.S. needs to get going on tackling its debt crisis and on improving and expanding its energy, infrastructure and math and science sectors. Particularly in the energy space, he said big changes were taking place in natural gas, which could provide an important economic boost in the long run.

“Natural gas and shale gas are going to be important dynamics in the U.S. economy for a long time, if we do this right,” he said, noting how the commodity could impact the way we think across different industries. He added that the best thing the government can do is “not over-regulate” the business and to quickly devise a standard of drilling that makes sense.

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Still, the CEO said the U.S. still needs to invest more heavily in improving its existing refinery capacity. “If you look at investments in refineries outside the U.S., [they’re] huge.”

Since 2009, Honeywell has also been engaged in steady rounds of restructuring and has focused the brunt of its efforts on Europe — which Cote said was faced withdismal growth prospects.

Europe will most likely “do just enough to muddle through,” he said. “As a result, I really think [they] can end up with a five-year, zero percent-type growth economy.”

He said the worst-case scenario could create a global recession. “We’re going to plan, assuming zero percent growth for the next five years,” he said. “It’s the only prudent way to plan for it, because [European leaders] aren’t showing the political will to do it.”

But he added a caveat, saying zero percent growth did not mean the end of the world. “As long as you’re driving the new products and services, feet [planted firmly] on the street, you can still do well.”

To Cramer, Honeywell remains a ‘buy’ because of its solid second quarter and “juicy” 2.56 percent yield. “Don’t rent it, don’t trade it, just own it!” he said.

Honeywell stock rallied this morning after the company reporting quarterly earnings that topped analyst estimates. The manufacturing giant earned $1.14 per share with revenue slightly below consensus at $9.4 billion. The firm also raised the lower end of its full-year guidance, citing continuing margin expansion and strong aerospace demand.

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