HONEYWELL TO INVEST $84 MILLION IN EXPANSION OF KANSAS AEROSPACE MANUFACTURING FACILITY

Rhea-AI Summary

Honeywell (HON) plans to invest $84 million to expand its Olathe manufacturing facility in Kansas, generating nearly $47 million in total gross domestic product (GDP) and contributing $18.3 million to state and local taxes in the first six years. The project is expected to create 156 new jobs at the facility, supporting more than 200 jobs in other sectors of the Kansas economy. The expansion aims to develop a strong domestic supply chain for next-generation avionics and printed circuit board assemblies, creating one of Honeywell's most technologically advanced aerospace manufacturing facilities.

Positive

• Investing $84 million in the expansion project
• Expected to generate nearly $47 million in total GDP
• Expected to contribute $18.3 million to state and local taxes in the first six years
• Creating 156 new jobs at the facility and supporting over 200 jobs in other sectors of the Kansas economy
• Developing a strong domestic supply chain for next-generation avionics and printed circuit board assemblies
• Creating one of Honeywell's most technologically advanced aerospace manufacturing facilities

Negative

• None.

Insights

Economist

Honeywell's $84 million investment in its Olathe, Kansas facility is a substantial capital infusion into the local economy. The projected generation of nearly $47 million in GDP and $18.3 million in state and local tax revenues over six years suggests a positive economic multiplier effect. The creation of 156 new jobs directly at the facility, with an additional 200 supported in other sectors, indicates a boost in employment that could potentially decrease unemployment rates and stimulate consumer spending within the region.

Moreover, the temporary construction jobs and the anticipated $25 million GDP contribution from this phase further underscore the immediate economic stimulus. This investment aligns with broader economic trends where states compete to attract high-tech manufacturing due to their high-value output and potential for innovation-driven growth. The emphasis on developing a resilient domestic supply chain for avionics signifies a strategic move to mitigate risks associated with global supply chain disruptions, which have been a concern for many industries in recent years.

Market Research Analyst

The expansion of Honeywell's aerospace manufacturing facility in Kansas represents a strategic initiative to cement its position in the avionics and aerospace sector. The focus on creating a technologically advanced manufacturing hub for avionics and printed circuit board assemblies is indicative of Honeywell's commitment to innovation and maintaining a competitive edge in the market.

As aerospace technology evolves, the demand for sophisticated components such as traffic collision avoidance systems and weather radar is expected to grow. Honeywell's investment is poised to meet this demand, potentially leading to increased market share and stronger customer relationships, particularly in the commercial and military sectors. The company's proactive approach to building a skilled workforce could also enhance its reputation as an employer of choice, attracting top talent in engineering and advanced manufacturing, which is critical for sustaining long-term growth and product development.

Financial Analyst

Honeywell's announcement is likely to be viewed favorably by investors, given the projected impact on revenues and the strategic nature of the investment. The facility expansion could lead to increased operational efficiency and capacity, allowing Honeywell to capitalize on the growing aviation sector. Investors will be interested in the company's ability to translate this capital expenditure into higher revenue streams and profit margins in the future.

From a financial perspective, the tax revenue implications suggest a supportive relationship with state and local governments, which may result in favorable conditions for future business operations and expansions. It is important to monitor how this investment will affect Honeywell's balance sheet in the short term, considering the capital outlay and to evaluate the return on investment over the projected period. Additionally, the focus on a robust domestic supply chain may reduce exposure to international supply chain volatility, which could lead to more predictable and stable financial performance in the long run.

Project to generate millions in tax revenue for state and local economy, create 156 new jobs at the high-tech manufacturing site

OLATHE, Kan., Feb. 2, 2024 /PRNewswire/ -- Honeywell (NASDAQ: HON) announced today it will invest $84 million to expand its Olathe manufacturing facility in Kansas. The project, which is expected to generate nearly $47 million in total gross domestic product (GDP) and contribute $18.3 million to state and local taxes in the first six years, supports the company's alignment with the compelling megatrend of the future of aviation.

Annual operations of the newly expanded facility will create ongoing economic benefits that include directly employing an additional 156 workers at the facility and supporting more than 200 jobs in other sectors of the Kansas economy. Additionally, the Olathe manufacturing facility will create economic benefits during the construction period and subsequent operations of the expanded facility. The construction and installation of new equipment in the facility will create temporary, one-time economic benefits that include 268 one-year jobs supported in Kansas and generating nearly $25 million in GDP.

"Expanding this facility will enable the development of a strong and resilient domestic supply chain for next generation avionics and printed circuit board assemblies that our commercial and military customers can rely on," said Jim Currier, president and CEO, Honeywell Aerospace Technologies. "At Honeywell, we are in constant need of highly skilled employees, particularly in engineering and advanced manufacturing, and our decision to expand one of our U.S.-based facilities is a testament to our confidence in the U.S. economy and its talented workforce."

This expansion will create one of Honeywell's most technologically advanced aerospace manufacturing facilities. The 560,000-square-foot facility currently manufactures components for Honeywell's avionics, safety and flight control systems and complex radio frequency systems for traffic collision avoidance, radar altimeters, and weather radar.

"Honeywell's expanded presence in Kansas underscores what we've known all along our state's workforce is prepared to meet any challenge," said Governor Laura Kelly. "The high-tech jobs and opportunities being created will allow even more of our young workers to find their dream careers right here in Kansas."

"Honeywell's expansion is a perfect example of the Kelly-Toland Administration's vision for further developing our state's aerospace and advanced manufacturing sectors," said Lieutenant Governor and Secretary of Commerce David Toland. "Honeywell's superior products and technologies are shaping the future of aviation, while also invigorating the regional and state economies."

"The hard-working men and women of Kansas have earned a reputation within the aviation manufacturing community for quality work, and today's announcement is further evidence of that," said U.S. Sen. Jerry Moran. (R-Kan.) "Honeywell's decision to expand its operations in Kansas will help bolster the U.S. domestic industrial base in the aviation sector."

About Honeywell

Products and services from Honeywell Aerospace Technologies are found on virtually every commercial, defense and space aircraft. The Aerospace Technologies business unit builds aircraft engines, cockpit and cabin electronics, wireless connectivity systems, mechanical components and more. Its hardware and software solutions create more fuel-efficient aircraft, more direct and on-time flights and safer skies and airports. For more information, visit www.honeywell.com/us/en or follow us at @Honeywell_Aero.

Honeywell is an integrated operating company serving a broad range of industries and geographies around the world. Our business is aligned with three powerful megatrends – automation, the future of aviation and energy transition – underpinned by our Honeywell Accelerator operating system and Honeywell Connected Enterprise integrated software platform. As a trusted partner, we help organizations solve the world's toughest, most complex challenges, providing actionable solutions and innovations through our Aerospace Technologies, Industrial Automation, Building Automation and Energy and Sustainability Solutions business segments that help make the world smarter, safer and more sustainable. For more news and information on Honeywell, please visit www.honeywell.com/newsroom.

Contacts:
Media
Ahjay Rai
(980) 384-5662
ahjay.rai@honeywell.com

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SOURCE Honeywell Aerospace

FAQ

What is the investment amount for the expansion project?

Honeywell (HON) plans to invest $84 million to expand its Olathe manufacturing facility in Kansas.

How much GDP is expected to be generated by the expansion project?

The project is expected to generate nearly $47 million in total gross domestic product (GDP).

How many new jobs are expected to be created at the facility?

The expansion project is expected to create 156 new jobs at the facility.

What is the aim of the expansion project?

The expansion aims to develop a strong domestic supply chain for next-generation avionics and printed circuit board assemblies, creating one of Honeywell's most technologically advanced aerospace manufacturing facilities.