Chairman and chief executive officer, United Technologies Corporation
Born: April 7, 1942, in Bryn Mawr, Pennsylvania.
Education: Harvard University, BA, 1965; University of Virginia Darden Business School, MBA, 1967.
Family: Son of Charles Wendell (history professor) and Margaret (maiden name unknown); married Barbara Osborn (divorced); children: three.
Career: Boston Consulting Group, ?–1975, management consultant; Otis Elevator Company, 1975–1976; United Technologies Corporation, 1976–1977, position with Otis Elevator Company (subsidiary of UTC beginning in 1976); 1977–1981, general manager of Latin American operations for Otis Elevator; 1981–1986, president of North American operations for Otis Elevator; 1986–1992, president and chief executive officer for Otis Elevator; 1989–1992, executive vice president as well as president of Commercial and Industrial Division; 1992–1994, chief operating officer; 1992–1999, president; 1994–, chief executive officer; 1997–, chairman.
Awards: Order of Friendship for contributions to the Russian economy, Russian Federation, 1999; John R. Alison Award for contributions to national defense by an industrial leader, Air Force Association, 2001; Legion of Honor, government of France, 2002; one of the 50 Best CEOs, Worth , 2002; CEO of the Year, Industry Week , 2003; Transatlantic Business Award, British American Business, 2003; one of America's Most Powerful People, Forbes , 2000–2001.
Address: United Technologies Corporation, United Technologies Building, Hartford, Connecticut 06101; http://www.utc.com.
■ As chairman and CEO of United Technologies Corporation (UTC), an aerospace and building services company based in Hartford, Connecticut, George David broadened the company's holdings, improved its overall financial outlook, increased the value of its shares, and established UTC as a global business leader. He implemented a company-wide commitment to pioneering technology, performance, employee development, social responsibility, and shareholder value. Over David's decade-plus run as chairman and CEO, UTC exceeded many of its rivals, including General Electric, in overall earnings and shareholder return. David was well known for his competitive spirit, but he was just as well known for his philanthropy and for his support of education and the environment.
David's father, a professor at the University of Pennsylvania and one of America's first Rhodes scholars, was 58 years old when David was born. Although David may not have had the opportunity to partake in the traditional father-and-son outings, his father did share with him his rich intellect. However, despite his abilities, David at first showed no proclivity for learning. He earned only average grades in his first two years at Harvard University. After his second year he took a year off (at Harvard's request) from the physics and chemistry program to work as a technical writer. He returned with greater focus, and his grades rebounded.
After graduating from Harvard and the University of Virginia Darden Business School, David began his career at Boston Consulting Group. One of his clients was Otis, the legendary elevator manufacturer. Hubert Faure, then president of Otis, was so impressed with David that he wooed him away from Boston Consulting in 1975.
Otis was acquired by UTC just one year later, and David thought he was out of work. "I was overtitled, overpaid and under experienced," he recalled to the New York Times (November 19, 2000). But he prevailed. In 1977 he became general manager of Otis's Latin American operations. In 1981 he moved up to become president of its North American operations, and in 1986 he was named Otis CEO. That year Fortune magazine publicly recognized David's talents, calling him a rising star. Over the next few years David also rose through the ranks of UTC. He served as senior vice president and executive vice president before becoming CEO of UTC in 1994. In 1997 he succeeded Robert F. Daniell as chairman.
Although it is the world's largest elevator producer, Otis is just one of UTC's many corporate holdings. The company's numerous divisions also include Carrier, the number-one manufacturer of heating and air conditioning systems; the aircraft engine manufacturer Pratt & Whitney; and Sikorsky, maker of Blackhawk helicopters.
Until David came along, UTC lagged behind in its industry. In the mid-1990s, David initiated a significant restructuring program, ridding the company of secondary businesses and slashing thousands of jobs to cut costs. He also pushed the company into the global arena, seeking opportunities abroad, especially in Russia and China. He expanded the company into Russia in 1995, supplying elevators and aircraft engines to the former Communist country. David spent much of his time traveling between Russia, China, Europe, and Southeast Asia, fostering potential UTC partnerships. Not bound by politics, he visited China just weeks after the government's much-criticized student crackdown in 1989.
In February 1999 David led UTC through a significant restructuring. The company began to move away from the automotive business and increased its concentration in the aerospace industry. To that end, UTC acquired the aerospace-components maker Sundstrand Corporation for $4.3 billion. In March 1999 it sold its automotive-parts business to Lear Corporation for $2.3 billion.
That same year, battered by the declining aerospace industry, David was forced to cut 10 percent of the workforce, or 15,000 jobs. Forty percent of the layoffs were in the company's Pratt & Whitney division. The company also closed 8.5 million square feet of manufacturing and other company space. David said the cuts would save $750 million a year starting in 2002 and would help maintain the company's competitive edge in a difficult economic climate.
The terrorist attacks on the World Trade Center in New York City on September 11, 2001, dealt UTC a serious blow. The downturn in the airline industry that resulted from the attacks hit the aerospace-heavy company squarely in its bottom line. David said the attack truly saddened him, even though he had not known any of the victims. From a business perspective, however, he was determined to do everything he could to win back confidence on Wall Street.
In late 2001 David announced that the company was cutting another five thousand jobs, primarily in the Pratt & Whitney and Sundstrand units. Because UTC was the largest private-sector employer in Connecticut, repercussions from the job cut were felt throughout the state. David faced a lot of criticism. In a letter to David, the Machinists Union decried the move, pointing to the already anxiety-ridden climate in the United States following September 11. "Our children no longer feel safe. How can you decree at such a time that loyal workers from Pratt & Whitney and Hamilton Sundstrand go home and tell these same children, 'I no longer have a job'?" ( Airline Industry Information , October 17, 2001).
Critics argued that the job cuts were unfair. UTC's profits were up, they said, not to mention the fact that David had just the year before pocketed $22.6 million, mostly from exercising stock options. Some accused him of being emotionless during the massive layoffs, but those who knew him said his coolness was merely a facade. "He dislikes all the trappings of false warmth. He shows his compassion in deeds, not words," Hubert Faure told the New York Times (November 19, 2000).
One of David's most notable good deeds was to set up a landmark $60 million-a-year employee scholarship program in 1996. The program pays for college tuition, books, and fees (and gives time off) for each UTC employee who wants an education. David even extended benefits for four years to laid-off workers who had been relocated. He also added another incentive: $5,000 worth of company stock to all employees who complete associate degrees and $10,000 worth of company stock to those who complete bachelor degrees or higher.
In the first three years of the program, UTC spent more than $100 million on tuition, fees, and books. As of 2003, 12,000 employees had taken advantage of the program. David said the employee scholarship program was designed to meet his goal of having "the best educated workforce on the planet" ( Chief Executive , June 1, 2000). The program was also a move to empower employees in an unstable economic climate (as evidenced by UTC's own rounds of layoffs). When David first proposed the program in 1995, other executives thought he was crazy. They believed employees would take their new degrees and use them to benefit other employers. Evidence suggests, however, that employees who go through the program actually become more loyal to UTC, as the turnover rate for these employees has been about one-half that of the overall workforce.
David may have been generous, but he also expected a lot from employees. For example, he constantly asked questions. "He's like a college professor, and you'd better have done your homework," one UTC senior executive told Industry Week (January 1, 2003). "It's not that I want to know everything myself about everything. It's that I want to cause others to know everything," David explained in the same article.
Although he was famous for his brevity and clarity, David had an uncanny ability for intellectual discourse, perhaps inherited from his father. He was known to break into erudite discussions of various subjects. At one UTC board meeting, for example, he related Boyle's law, the 17th-century mathematical equation governing the behavior of gases, to the development of fuel-cell technology used in some of the company's products.
David was always highly competitive. "Someone once said that business is bloodless warfare. I confess that I like to compete and I like to win," he is quoted as saying on the United Technology Web site. Given his nature, it is no surprise that he was an avid sailboat racer. In 1999 David and his 50-foot sailboat, Idler , led the U.S. team in competition for the America's Cup, coming in third. When asked by the New York Times in 2000 whether he ever just went for a cruise in a sailboat, he replied with one word, "Boring." David was also a proficient golfer, making Golf Digest 's list of Top 200 Golfing CEOs in 2000.
David was accused of being overly focused on the company's shareholders and, admittedly, stock prices were one of his biggest focuses. During his tenure, he improved the company's products, executed share buybacks, cut costs, and acquired several synergistic businesses because he wanted to maintain a yearly 15 percent growth in earnings per share. In 2002 David boasted that the company had provided a 448 percent total return to shareholders since he had taken over. UTC had even beaten out General Electric.
Part of the success of UTC can be attributed to its strategic acquisitions. In October 2000 David put in a $40 billion bid to acquire the aerospace and materials company Honeywell International. The merger would have significantly enlarged UTC's business and provided a much-needed boost to its aviation-parts business. But David was outbid (by $5 billion) by Jack Welch, General Electric CEO (although the deal was later rejected by European regulators). Never one to be a sore loser, David was reportedly nothing but gracious when he ran into Welch in Florida just a few days after his failed bid.
In August 2004 David launched another acquisition bid, this one successful. UTC acquired Chubb, the London-based electronic security and fire-protection company, for $1 billion. David said Chubb would fit well within UTC's other building services ventures.
In 2003 the commercial aerospace industry was still suffering the repercussions of September 11. However, thanks to the success of its elevator and other service divisions, UTC was able to meet its earnings projections, and David remained ever hopeful that the aerospace industry would make a comeback.
David always shunned the spotlight, and he complained that CEOs get too much publicity. "You put your head down, do good work, and good things will happen," he told BusinessWeek (January 12, 2004). His quotes were rarely big news, and David shied away from the headline-grabbing theatrics of some of his fellow CEOs. David also passed on the traditional corporate monarchy. Instead, he favored a more decentralized structure in which every employee has a voice and openly encouraged disagreement among the ranks.
In the early 2000s, when the CEOs of Tyco, Enron, and other large corporations were facing legal troubles for serious violations, David earned respect for his firm commitment to corporate ethics. In January 2003 Industry Week recognized David as CEO of the Year. He insisted that his company keep a spotless record, making no exceptions. In fact, his motto regarding UTC's financial statements was "What you see is what you get" (London Sunday Times , April 28, 2002).
David was also a staunch advocate of social responsibility, stating that despite his interest in shareholder value, he was more concerned that his employees work in a safe and healthy environment. He was also a firm believer in corporate responsibility when it came to environmental protection. In 1998 he announced a UTC global conservation program that planned to cut the company's energy and water consumption by 25 percent within a decade. The move was a reflection of the company's commitment to reducing greenhouse emissions at its facilities worldwide.
As 2004 got under way, David described business as good. During the company's annual meeting, he said, "You can hear the cash go by the door" ( Milwaukee Journal Sentinel , March 22, 2004). At that time UTC was operating at more than two thousand locations in 180 countries, with revenues of $28.2 billion.
However, as UTC moved forward, the 62-year-old David was forced to contemplate another venture, his own retirement. According to company rules, he would have to retire at age 65, but first he would have to find a successor. As of 2004 he was working with the company board to identify an internal candidate. David once told Worth magazine that he planned to learn Spanish and French after he retired.
As chairman of the U.S.-ASEAN Council of Business and Technology, which promotes trade with Southeast Asian countries, David consistently promoted his belief that international growth depends upon continuing foreign investment. In 1996 he was even prepared to defy U.S. sanctions against Burma because he believed financial involvement would be more effective than sanctions in bringing about change in the Southeast Asian country.
David was a member of the board of directors of Citigroup and the board of trustees of Carnegie Hall. He also sat on the boards of the National Minority Supplier Development Council and the Institute for International Economics and was a member of the Business Council and the Business Roundtable.
A longtime supporter of the arts, David sat on the board of the Bushnell Center for the Performing Arts in Hartford, Connecticut. He was president of the board of trustees at Hartford's Wadsworth Atheneum Art Museum until he resigned in December 2002 because of a disagreement over organizational leadership. David continued to support his alma mater, the University of Virginia, acting as chairman of the Darden School Foundation Trustees and donating $10 million to the graduate school, one of the biggest donations in the school's history.
See also entries on The Boston Consulting Group, Otis Elevator Company, Inc., and United Technologies Corporation in International Directory of Company Histories .
"The Best and Worst Managers of 2003—The Best Managers: George David," BusinessWeek , January 12, 2004, p. 60.
Deutsch, Claudia H., "Even His Soufflés Can't Relax," New York Times , November 19, 2000.
McClenahen, John S., "UTC's Master of Principle," Industry Week , January 1, 2003, pp. 30–33.
O'Connell, Dominic, "Giant U.S. Engineer Sees No End to Growth," Sunday Times (London), April 28, 2002.
Torres, Carlos, "Demand for Durable Goods," Milwaukee Journal Sentinel , March 22, 2004.
United Technologies, "Executive Bio: George David, Chairman and Chief Executive Officer." http://www.utc.com/profile/facts/executives/david.htm .
"United Technologies Axes Jobs at Several Units," Airline Industry Information , October 17, 2001, p. 60.