Edson Spencer, Honeywell CEO Who Gave Up IBM Fight, Dies at 85

Edson Spencer, who as head of Honeywell Inc. first battled IBM’s dominance of the computer market in the 1980s, then gave in and focused his company on automation and aerospace technology, has died. He was 85.

He died on March 25 at his home in Wayzata, Minnesota, after battling progressive supranuclear palsy, a neurodegenerative brain disease, his daughter, Linda Spencer Murchison, said today in an interview.

In his 34-year career at Honeywell -- known as Honeywell International Inc. (HON) since its acquisition in 1999 by AlliedSignal Inc. -- Spencer rose from an aeronautical engineer to the company’s chief executive officer from 1974 to 1987. Midway through his tenure, Honeywell’s top competitor in mainframe computers, International Business Machines Corp. (IBM), settled a long-running antitrust investigation by the U.S. Justice Department that had constrained its growth.

IBM’s “power wasn’t recognizable before then,” Spencer told Computerworld magazine in 1986. With the antitrust case behind it, IBM invested in new factories and took on Japanese competitors, “and the government permitted them to go after new market share without fear of antitrust reprisal. That’s when the name of the game changed, and that’s the point at which we had to redirect our own strategies.”

Honeywell, he said, had become “the freewheeling entrepreneurs who are charging off in our own direction.”

‘Outstanding Opportunity’

Within a year after that interview was published, Honeywell, then located in Minneapolis, spun off its computer unit into a venture shared with NEC Corp. of Japan and Groupe Bull SA, France’s state-owned computer maker. As part of the restructuring, Honeywell pledged to eliminate 4,000 jobs, the Associated Press reported. It also purchased the Sperry Aerospace Group, maker of electronic gear for military and commercial aircraft, from Unisys Corp.

In a statement at the time, Spencer called the purchase “an outstanding opportunity for Honeywell that positions us for the long term in a market that is expected to have significant growth for the next 10 years, commercial and military aviation.”

Today, Honeywell’s aerospace unit, which makes cockpit controls and auxiliary power units, is the second-largest of the company’s four divisions, behind automation and control solutions. It had $11.5 billion of sales last year, or 31 percent of total sales of $36.5 billion for the company, now based in Morris Township, New Jersey.

Railroads, Meat Packing

Edson White Spencer was born on June 4, 1926, and raised in Chicago, the son of William M. Spencer, chairman of the North American Car Corp., which leased and operated railroad cars, and the former Gertrude White. His maternal grandfather, F. Edson White, worked his way up to the presidency of the Armour & Co. meat-packing business and served on the board of Chase National Bank.

Spencer attended Hotchkiss School in Lakeville, Connecticut, and was an usher at the 1947 wedding of his classmate and friend, William Clay Ford, grandson of the founder of Ford Motor Co., to Martha Parke Firestone, daughter of the president of the Firestone Tire & Rubber Co. and granddaughter of its founder.

After being discharged in 1946 as an officer in the U.S. Naval Reserve, he graduated from Williams College and earned a master’s degree from Oxford University, which he attended for two years as a Rhodes scholar, according to his resume on the website of the Hubert H. Humphrey School of Public Affairs at the University of Minnesota, where he was a former chairman of the Deans Advisory Council.

Climbing Honeywell’s Ladder

He worked for Sears Roebuck & Co. in Sioux City, Iowa; La Crosse, Wisconsin; and Venezuela before settling in Minneapolis in 1954. After joining Honeywell in 1954, he worked as regional manager for Honeywell Asia based in Tokyo from 1959 to 1964, according to a death notice in the New York Times.

He became an executive vice president in 1969 and was promoted to president and CEO in October 1974. After stepping down as CEO in 1987, he remained chairman for another year.

U.S.-Japanese relations were among his passions, and he served on the U.S.-Japan Business Council and the Trilateral Commission, according to the notice.

Spencer and his wife of 62 years, the former Harriet McClure Stuart, were founders and longtime supporters of the Yellowstone Park Foundation. In addition to Murchison they had three children: Douglas Stuart Spencer and James McClure Spencer and Edson W. Spencer Jr., founder and chairman of Affinity Capital Management in Minneapolis.

To contact the reporter on this story: Laurence Arnold in Washington at larnold4@bloomberg.net

To contact the editor responsible for this story: Charles W. Stevens at cstevens@bloomberg.net

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