Business

Wednesday March 12, 2008

Honeywell Aerospace shifting operations to Prai

By DAVID TAN



PENANG: Honeywell Aerospace is shifting a substantial portion of its activities to the Prai Industrial Estate.

US-based Honeywell Aerospace is a leading provider of avionics and electronics, consumable hardware, engine controls, environmental controls, landing systems, power systems, propulsion engines, aerospace services and space products and systems for the aerospace industry.

In an internal company memo dated Feb 28, a copy of which was made available to StarBiz, Honeywell said it had approved a plan to move most of the avionics integrated supply chain activities, including computers, platforms, displays and radio frequency, to a new facility in Penang.

Remaining in Deer Valley (in Phoenix, Arizona) will be the production of sensors, air data and the McDonnell Douglas MD-11 computer line.

A source from the Malaysian Industrial Development Authority said the investment in Penang was expected to run into hundreds of millions of ringgit.

According to the memo, the decision was based on a thorough analysis of data, which indicated that Honeywell Aerospace could produce high-quality parts at significantly lower operating costs by relocating to Penang.

“The decision was made for business reasons and is not a reflection of performance. The move is a proactive step to keep our business competitive and strong,” the memo said.

It said the shift of operations to the Penang facility would be completed in 24 months, beginning immediately with a planning phase followed by the first product moves in Deer Valley in the first quarter of 2009.

“Honeywell will continuously evaluate and adjust staffing levels based on the needs of the business throughout the transition,” the memo said.

Construction of the facility in the Prai Industrial Estate is expected to start this year.

The new facility is expected to create more than 400 highly skilled jobs.

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