CNBC’s Morgan Brennan sits down with Honeywell CEO and chairman Vimal Kapur to discuss his outlook for the global economy, and his plan to separate the company into three standalone businesses by the end of 2025.

Honeywell CEO Vimal Kapoor stated that the company is on track to split into three independent businesses, with the process expected to be completed within a year. The divisions will include automation, aerospace, and advanced materials, with the chemicals business spinoff scheduled for completion in the fourth quarter and aerospace following in the second half of the following year.

Kapoor emphasized that the portfolio transformation is nearly complete, positioning each business for success post-separation. He also highlighted the company's ongoing focus on automation, industrial AI, and quantum computing, noting that these areas will drive future growth and innovation.

Honeywell will be three separate companies in about one year, says CEO

Vimal Kapoor of Honeywell. It's great to speak with you today. Thanks for having me. So we just talked about it Balanced growth across the globe with the US leading. That's what you said in earnings about a week and a half ago It was a beat-and-raise quarter for you as well. You sound pretty constructive. How much How much is trade disruption factoring in to that outlook? And I guess just what do you what do you see globally? Anyway, I think globally the the demand is I would say is very stable that's reflected in our earnings And if you see aerospace demand remains very strong demand in segments like data centers Entertainment like hotels remains very strong LNG gas remains very strong I think the factor to be determined is the secondary impact of the tariffs So think about it like no tariffs are say for example I was an ASEAN last week and they have 20% tariff roughly every country What will happen to their economies because of that is is a new factor which is coming in So that's what we're really trying to grapple with What does it mean the secondary implication of any demand destruction there? But so far we haven't seen any impact and that's why we remain confident of the earning guides What we gave during our quarter to and of course looking across the industries that you do Operate and these are secular growth stories whether it's energy whether it's aerospace whether it's automation Which gets us to the takeaway from earnings from analysts Which was that the stock is expected to be range brown until we start to see these spinoffs happen So what's the latest there? I mean the spinoffs are Progressing on time. So we expect to have the chemicals business advanced material spinoff completed q4 of this year And then aerospace will happen Second half of 2026 so they are progressing. Well, but the good news is that the two important points there First is we have majorly completed our portfolio transformation work with that because when I started We announced these spins, but we also have done a lot of portfolio work some subtraction some additions So that's largely completed here and one of the route we took was that we didn't want to do like a plain vanilla separation We also wanted to make sure that businesses are well positioned at the exit so we did significant work on the portfolio and I feel good about where we are and This time next year roughly Will be three separate companies, you know, so looking forward to that and so remain Co is really the automation business. Yes You're gonna run it. Yes, that's I'm really excited about it. I think that timing wise When we are going to come in as a standalone automation company is really becoming But I kind of perfect timing because we have been automating our customers for last 50 years We started we are Honeywell in this business in mid 70s and essentially this business was what's called sense and act you send something and you act and you make sure that a Process a machinery equipment or building is running more efficiently more productively more safely What we never did was collected data from that. There was no real Desire or ability to do that So since last couple of years since the cloud has come we were able to collect our insta connect our install base And able to get data to get to the next level of Capabilities into our install base and our install base is very massive think about millions of buildings thousands of manufacturing facilities other infrastructure that's what we covered today and they haven't really seen the power of data and Why companies like us become important is even if you collect data to make sense of it You need some humans who have domain expertise So we are still going to be enabling our customer to bring that level of productivity And that's why I believe the timing for us is perfect. I mean, it's automation is going to become autonomy I can't tell you it's gonna take 10 years or 15 or 25 But it's gonna happen and it'll happen in progression and that's what we're excited about That's what we're going to enable as a company. So you and I've talked about the promise of industrial AI We're coming off of blowout earnings from Palantir today is the promise here promises absolutely here I mean for last, you know, I've been in this industry for more than three decades one thing I hear now, but I've never heard is Customers are short of people and it sound you know They don't have skilled people to run their operations and they are looking for a substitute that what to do Differently because you can't have more people because they don't simply exist the kind of skills we are looking for So I really see that industrial AI is going to enable our customers to run their operations better and fill the skill gap what exists and we are basically in year zero of that and I feel really excited what opportunity is going to create for us and our customers in the times to come a lot of folks probably Don't realize that Honeywell is a big player in the quantum space quantum computing space as well with quantinium Mm-hmm. What's the latest there? And is that spill is that spinoff still on track? Yeah, we Quantum is a very relevant technology, you know AI needs more compute, right and We want to make sure that that compute is not run out of capabilities and that's where quantum comes in So it's a high level of compute for inventing new molecules or thinking of random number generation for cybersecurity those kind of applications Okay, so we believe that we are on the right track and what we are really waiting for is Enough commercial proof that this business is not capable to be a standalone company We are always committed. That's the way it's going to be whether it happens to a direct listing or happens to IPO Okay, so in the times ahead we think we are going to be we're going to be doing that

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