We think it is very positive that GE could move so quickly when the stakes were
so high, and we believe they were high. The future value-added in airplanes is
what was at stake and GE’s move was just as defensive as it was offensive. …
Defensively we believe GE decided it simply could not let UTX dominate all the
value-added in airplanes. Had UTX bought HON, the new company would
dominate every system in the airplane, plus have a good position in engines (Pratt
& Whitney). … GE would have been left with only engines and no other aircraft
systems. GE has dominated the engine business in recent years, winning some
60% of all orders in the 1990s. However, the proposed HON/UTX combination
… could have begun a long-term reversal, slowly eroding GE’s lucrative engine dominance.