In 1991, Larry Bossidy became CEO of AlliedSignal Inc. after a 34-year stint at General Electric Co. He was named AlliedSignal's chairman in 1992. Although Bossidy has not managed a plastics business directly, he has overseen engineering thermoplastics units since 1981. In January, the Wall Street Journal lamented the end of the high-profile corporate leader. But Bossidy continues to buck that trend. He's frequently on the cover of national business publications, and was Chief Executive magazine's 1998 CEO of the Year.
No, I don't think I'm an endangered species. When you take a guy like [GE Chairman] Jack Welch, who has been around for 20 years, obviously his successor won't be as well-known as he is. But if the nation decides to make CEOs high profile, you can be sure his successor will be high profile. So I don't think that will change.
When you have all these cable news programs on, high-profile CEOs are featured on television every night of the week. Not just me, but a whole host of people. You get more credit than you deserve when things go right and you get more blame when things go wrong. That's just part of the territory.
I have been pretty bullish on plastics for a lot of years. I think the new applications are good, I think they continue to find ways to grow and I think the industry is innovative. I often wondered whether there would be more innovation in the steel industry — if they'd take back some things that went to plastics. But it doesn't seem to have occurred that way.
We have a small engineering thermoplastics business, but between nylon and nylon films, now, I suppose we're close to $700 million in sales. Which in the scheme of things is small. But we've made some nylon film acquisitions in the last couple of years.
We're still interested in expanding our product basket in plastics. Plastics is a market of interest, because among other things, it has applications not only in the United States, but in Europe and Asia, so it will give us some worldwide growth. Those are the kind of markets we're chasing.
We'd like to move up the value chain from nylon. We have an interest in some of the properties that might be for sale. And I think we have some chance of success in the next year or so to add to our offering.
There's a number of high-heat materials that we like, which I think might have nice market applications down the road. We were interested in Ticona for a while, but they're taking that public, so that doesn't look as though that will happen. But while that opportunity is no longer viable, there are others out there that we will have some interest in.
You know, nylon is a wonderfully versatile material. But on the other hand, I think we could be advantaged if we had more to offer than we do now.
[Some rival ETP makers have shifted gears in recent months, announcing plans to invest in life-science businesses].
When you look at some of the life-science opportunities, you're impressed by the fact that they're very vague. And while I wouldn't doubt that that's going to be a very big business at some point in time, I think it's a long way away.
So while there have been a lot of announcements by chemical companies that they're going to abandon all else and travel after life sciences, I don't think at the end of the day that will happen.
I think people with solid positions in engineering thermoplastics — and I define that as being ABS and up — are not going to desert that channel. They'll continue to invest in it.
Ge Capital experience
When I was at GE Capital Corp., I looked at a lot of transactions, and a lot of proposed transactions, in a lot of different industries. And you do form biases as to what you like and what you don't like.
I look at price, opportunity for growth, current margins and the extent that there are synergies that justify the price. And I also have an opinion about how the companies are going to fit with AlliedSignal. And while some don't think culture matters, I do.
When I look at the plastics business, I think we want to be fundamentally well-positioned. In other words, we want to have the basics in a cost position that allows us to compete. Second, I want to see the applications, because that gives you some idea as to how fast you can grow.
And third, I look at the marketing role. If you look at GE Plastics way back, it was essentially a marketing company. They made a lot of difference by virtue of emphasizing that particular strength. In this case, marketing means finding new applications. All three factors are important in terms of how successful you are going to be.
Overseas opportunity
I love Latin America. I spent some time down there. At the same time, when I was with GE, we'd make money for four years and give it all back in the fifth. I guess I can say nothing has changed.
I do feel pretty good about Mexico. And I continue to feel good about Asia, despite the troubles that have occurred over the last 18 months.
Asia Pacific and India are going to be big growth markets, and I'm convinced we ought to be a part of it. Can you predict exactly how they'll develop? You can't. But at least there's sufficient potential to suggest that you ought to be there.
The potential is still enormous. There are not many businesses that you can just participate in on one continent. You must be a worldwide player or you give advantage to other competitors who are worldwide players.
I think you have to follow global customers to begin with. Then obviously, if you're going to have a beachhead, you want to extend your positions as broadly as you can.
We've done a couple of deals in Asia already. I do think there are opportunities to do more. I don't know that you're going to be able to buy companies at low prices now, but I do think that you have opportunities to talk about things that you couldn't have talked about three or four years ago.
So you may not get a bargain, but you at least may have the opportunity to do a deal — maybe a purchase, maybe a joint venture.
I was a big supporter of NAFTA. I think trade between the United States and Mexico has been wonderful, as we expected it to be. The Canadians have participated also about the way that was expected.
You know, it's disappointing to see the elite pockets of opposition arising in the United States to abolish free trade. You don't have to go back too far to recognize what happened the last time —when was Smoot-Hawley, 1929?
You have to have free trade. You have to make sure that it is free — in other words, that we have the same opportunities in other countries that they have here. That certainly remains imperfect.
I hope that at some point we get fast-track [trade approval] again. It's essential. I think it will resurface, and we will get it at some point in time. Whether we'll get it in the Clinton administration, I don't know.
