CEOs of the largest American corporations, without aiming at it, shot barn-door-size holes through the rosy jobs picture. Rosy on the surface: unemployment down to 7.7% with 236,000 new jobs created last month. A picture the White House held up as proof of its success. But these CEOs didn’t see it. Not in the US. Though prospects were rosy in cheap countries.
Last week it was Honeywell CEO David Cote who said that they’d been cutting headcount through attrition, instead of adding to it, at the rate of hiring only two to three people as four or five leave. He expected hiring to slow even more, based on economic uncertainty in the US.
Economic uncertainty! A term that’s now showing up frequently. But one of the things the company didn’t appear to fret about? The Sequester. With the government portion of total revenues being about 11%, the company expected only a minor dent from it in 2013. The problems were elsewhere. As a conglomerate and Fortune 100 company active in a wide variety of industries, Honeywell sees first-hand what’s going on.
“We’ve become more concerned recently,” Cote said. “If we want employment to grow, we have to have GDP growing more like 3%, not 2% or less.” Though growth had stalled altogether last quarter, Cote hasn’t given up hope for growth this year, expecting 1.9%. Yet even 3% growth might not do much for hiring—because Honeywell has been adding plenty of jobs overseas while cutting them in the US. As the Wall Street Journal reported:
Since 2009, Honeywell, which gets 46% of its sales from business in the US, has added 10,000 jobs globally, boosting its employee count to 132,000, while eliminating 2,000 positions in the U.S. Last year, Honeywell trimmed its US workforce by 1,000 jobs to 52,000 employees.
It’s a point of pride: “We have 1,000 less people in finance than we did when I arrived in June of 2003,” Honeywell CFO David Anderson explained. And it even cut executives, 580 down from 600. Trimming in the US, hiring overseas.