Honeywell in Control

For most of its history since 1885, when the company was formed to make a newfangled thermostat, Minneapolis-based Honeywell Inc. has stuck pretty close to the home furnace. More recently, it has considerably broadened its territory. Since 1961, sales have more than doubled; they topped $1 billion for the first time last year. Beyond home thermostats--now only one of thousands of items that Honeywell sells in 57 countries--the company is busy manufacturing automation systems, defense gear, and industrial control equipment. It brings out about three new products weekly, and last week outdid itself by introducing ten new products, including storage disks for computers.

Even the thermostats are not what they used to be. For Pittsburgh's U.S. Steel building, due to go up in 1970, Honeywell is building a data center that will not only control temperature but switch lights on and off, monitor security guards and sniff for smoke. After working hours, it will flood stairwells with inaudible sound waves, which, when disturbed by an intruder, will trigger locks in exit doors and touch off an alarm.

One-Upmanship. Not too long ago, Honeywell itself was somewhat out of control. It decided in the mid-1950s to plunge into the computer business and, like many other companies, underestimated the costs and complexities of that highly competitive market. Elaborate studies showed that Honeywell could get by with spending only $10 million on computer research and development, and start earning profits on computers in 1957. In fact, Honeywell had to sink $300 million into computer R & D, and did not turn the profit corner until 1966.

The man who got the computer division moving was James H. Binger, 52, Honeywell's chairman since 1965. He did it partly by a shrewd bit of one-upmanship over I.B.M., the industry's long leader. In 1964, when I.B.M. was readying its System 360--a highly advanced computer group to replace its popular 1401s--Binger saw that if users of the 1401s switched to the 360s, they would be forced to "reprogram." That is, they would have to overhaul their information-handling procedures, a costly and time-consuming task. Honeywell then rushed out its own Series 200 computers, which were similar to I.B.M.'s 360s but had two advantages: they came to market nine months sooner, and enabled users of the 360s to move to them without reprogramming.

Two Leaders. Today, Chairman Binger runs Honeywell in a two-man management with his onetime law-school chum, President Stephen Keating. Binger came to Honeywell via Yale ('38) and the University of Minnesota law school. A spartan man, he regularly beats his juniors into the office in the morning, though he has no need to run. Wealthy beyond his own Honeywell salary ($147,000) and stock (worth $3,200,000), Binger is married to Virginia McKnight, only child of William McKnight, the retired chairman of the 3M Co., whose worth has been estimated at $400 million. Nevertheless, Binger likes to indulge a strong streak of austerity by putting the touch on friends for $10 contributions to a local polo team, to which he contributes a classy two-goal rating.

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