Honeywell Transportation Systems CEO Alex Ismail didn't panic when unit sales of his division's top product - turbochargers - took a hard hit in 2009.
He also didn't fret when the global economic crisis caused some of the company's turbo customers to cancel or delay contracts at the start of 2009.
The 45-year-old executive knew that the business's position as the world's dominant No. 1 maker of turbochargers would be safe because of the technology it was developing, the improvements it had made to its production processes and its global reach.
Ismail said that by late-2009 to early-2010 many of the customers that had gone away came back with a different engine or a different platform.
"In the next five years we will be working on 400 new engines, 100 of those projects will happen in 2010," Ismail said.
The unit's 2009 revenues declined more than a quarter to $3.4 billion from $4.6 billion the year before while operating profit was more than halved to $156 million last year from $406 million in 2008. Despite the ongoing challenges, Honeywell Transportation Systems expects sales growth of 6 percent to 12 percent this year.
One of the key reasons for the sales drop last year was reduced demand in Europe for turbocharged diesel-powered cars -- Honeywell Transportation Systems gets about 60 percent of its revenues from its turbocharger business.
Diesel sales in Europe suffered because of government-subsidized scrapping incentives, which encouraged people to trade-in their old cars for gasoline-powered minicars and subcompacts. People stayed away from diesel-powered minicars and subcompacts because they are 2,000 euros to 3,000 euros ($2,510 to $3,770) more expensive than gasoline-powered versions of the same cars.
Honeywell does not reveal how many turbos it makes a year, but Ismail said that before the recession the global total was a little less than 10 million.
"We will exceed that level in the next five years as the industry grows on the back of increased global penetration of turbos, mostly driven by China, India, the United States and a continued penetration of turbocharged-gasoline engines in Europe," Ismail said. "As the global market continues to grow, what you will see is turbo penetration rising from about 24 percent to more than 70 percent by 2020 -- and we will benefit from it."
The reason Ismail is confident is because of the key improvements his division has made. He said that 10 to 15 years ago the company was mostly European-centric and diesel focused. Today its footprint is global and it can apply its turbo expertise to gasoline, compressed natural gas and hybrid powertrains.
A decade ago, Honeywell's turbo business also had very few standardized processes. That changed after it benchmarked Toyota Motor Corp. and Nissan Motor Co. to develop its own Honeywell Operating System.
The results have been impressive: a 73 percent improvement in quality and an average productivity gain of 30 percent at sites that have completed the company's three-year upgrade program.
Ismail has been the driving force behind the changes. He joined Honeywell's turbocharging business in 1999 and led that division until moving to his current job in April 2009.
Ismail has an MBA from the HEC School of Management in France and a degree in finance from France's University of Dauphine.
Honeywell Transportation Systems ranks No. 69 on the Automotive News Europe list of the top 100 global suppliers.
Honeywell Transportation Systems is one of four business units at U.S.-based Honeywell International. The other divisions cover the aerospace and building industries. Honeywell International reported global sales of $30.9 billion last year, down from $36.6 billion in 2008.