Wharton Aerospace & Defense Report

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Imagine the uses for a fiber that is 15 times stronger than steel and yet capable of floating on water. This ultra high molecular weight polyethylene fiber produced by Honeywell’s Advanced Fibers and Composites division is making its way into bullet-resistant armor to lighten the load for soldiers and is strengthening aircraft as a protective outer skin.

The Wharton Aerospace & Defense Report spoke to Phil Wojcik, the global business director for Advanced Fibers and Composites at Honeywell, about how the company innovates in the materials space, what competition it faces, and how it focuses on developing technologies with commercial and military applications. What follows is an edited transcription.

Wharton Aerospace & Defense Report: Phil, thanks so much for joining us today.

Wojcik: Thanks for having me.

Wharton Aerospace & Defense Report: Could give us a little background of your division?

Wojcik: Certainly, so I lead the Advanced Fibers and Composites business for Honeywell and the product that we make is called Spectra fiber. It is an ultra high molecular weight polyethylene fiber and an interesting thing about it is that its 15 times stronger than steel and yet it floats on water. So what that allows us to do is some really interesting applications. For instance some of the things we do are mostly in the realm of bullet resistant armor. So that is everything from some of the bullet resistant vests that police officers wear, it also goes into some of the vests that soldiers in the military wear both in the U.S. and around the world. We also use that in a number of applications on aircraft on ships on ground vehicles. We also have a bit of the business that goes into what we call the industrial space which includes for us fishing lines, it includes ropes that are used for really demanding applications and it also is used in cut-resistant gloves.

Wharton Aerospace & Defense Report: So when you say demanding applications for some of the commercial items like rope they would have dual purposes for military as well?

Wojcik: To some degree. When we talk about demanding applications in the commercial sense and the industrial side of the business like ropes you could think of things like mooring offshore oil platforms, really heavy things in really demanding applications. We also have some military applications of rope so in the military when you think of Special Forces troops repelling from helicopters; some of those ropes that they use are our material. But most of the industrial business where we deal with tends to go into commercial applications. It is the armor side of the business that goes into what I would consider the most demanding application, which is protecting soldiers typically in combat situations.

Wharton Aerospace & Defense Report: Right, now when one thinks of a company like yours — one in the defense in the aerospace sector — we tend to think of the larger items like airplane motors, electronics. We don’t think in terms of the actual materials that go into making those big items. Could you put this into perspective for us a little bit? How do the products you develop make their way into the various divisions at Honeywell?

Wojcik: When I think of the other divisions at Honeywell we certainly collaborate and do work with the other divisions at Honeywell probably most notably the Aerospace Division. That being said, for the most part our products are used in very different places and very different applications than the products at Honeywell’s Aerospace Division itself. So the work that we do with our customers is channeled into the end uses more so than our sister divisions.

Wharton Aerospace & Defense Report: Right, so would that mean that your materials are also being integrated into defense and aerospace components made by other companies as well rather than just at Honeywell?

Wojcik: Absolutely and if I were to look at the bulk of where our materials go and how they make their way into an end application it would be through customers outside of Honeywell more than our sister divisions. In terms of how we work and how our products get into the market it tends to be in very different places than our aerospace business and maybe a simple way to think about it is that the materials that we make and sell usually end up trying to protect something on the aircraft so it tends to be in the outer skin of the aircraft. The products that our Aerospace Division tends to make are things around electronics and engines and things like that that tend not to be structural components of an aircraft so that is why most of our products get to market through other customers and not necessarily our aerospace division.

Wharton Aerospace & Defense Report: Do other companies come to you with specific material that they would like to see produced or are you producing that and then selling it, making sales pitches.

Wojcik: You know it’s a mix. I mean in terms of customers coming to us, it happens to us all the time, right. As I think about this business it is very much a performance materials business and customers come to us all the time with requirements, and they look to us for solutions that meet their requirements. At the same time we also have a pretty strong R&D capability and we spend a lot of time in the market.

So some of the work that we do is around our ideas in terms of what we think will be products that will meet demanding needs in the market and to that end we will develop certain products from that standpoint versus products that customers ask us for.

Wharton Aerospace & Defense Report: And so how has nanotechnology kind of infiltrated the materials that you develop or the process of developing it?

Wojcik: You know for us nanotechnology is and remains a very interesting topic at the same time at least in our market we haven’t seen widespread commercialization of nanotechnology. So for us I would put it that it is still in the R&D stage in some very interesting results in terms of enhancing the performance of our materials of our nanotechnology but they would be early stages and they would be still a fair way away from being commercial.

Wharton Aerospace & Defense Report: Are you talking 5 years, 10 years?

Wojcik: You know it is hard to say given that we are always one break-through innovation away from something really exciting, but if I were to guess I would say it’s probably in the five-year range before there is something widespread and commercial. I think we are really trying to figure out how it fits and how we can get it into specific products and applications.

Wharton Aerospace & Defense Report: Now you have the product and it’s selling well, it’s strong. How do you go about the deciding to improve it still? You must have a lot of different products how do you go about deciding what are the things that need to be improved?

Wojcik: When I think across our entire portfolio, it is less about our material and more about our performance or protection. So from that stand point we are constantly innovating and the way that we think about it is that all starts with the performance requirement. Because most people using our products they don’t care about the materials, they care about what they will do, right. So if you think about this in the vein of a soldier that is in a combat situation, they are not interested in specifically what the material is they are very concerned about how the application is going to protect them from harm. So when think about the new products we think about the entire application. We start to think about things in terms of typically three criteria. How well does it protect someone how light is it and how well will it be able to stand up to the environment that it is in. And then from there we work backwards to design new materials and we also think about not only making material but how someone might use that material, and how someone might manufacture that material in its final end use.

Wharton Aerospace & Defense Report: When you think of that criterion, how do you actually go about testing the new material to see how it will react to the many conditions it could possibly face out there?

Wojcik: Yeah, the testing in this industry is extensive to the point of being exhaustive. So in all cases, when we are talking about armor whether its body armor or vehicle armor etc., there is always a set of ballistic tests that has to be done…and the essence of that is really around asking the question how much material is required to stop a given threat with the goal being you want to have the lightest weight material to stop a given threat. In addition to the ballistic testing there is extensive environmental testing that has to happen. So that would be things like exposure to heat and cold, being exposed to water, being exposed to all kinds of other liquids and then making sure that the end article performs after all that exposure. And then the final thing is beyond any kind of customer requirement.

We go through and test every single lot of our material. We look at it visually, we test the mechanical properties, we perform ballistic tests because in many cases this is going into an application that is protecting someone’s life and limb and it’s incredibly important for us to make sure that it’s going to perform in its use. And to put this all in perspective, you know in some cases there is upwards of 30 tests that have to be passed before some of our material is used in a certain application.

Wharton Aerospace & Defense Report: That is part of the development phase where you continue to test and until something is up to the standards you want.

Wojcik: Yeah I mean certainly if it’s a commercial product and it doesn’t meet our specifications, we won’t even sell that material on the market because this is not something that, when I think about this, [if it’s] as it’s a little bit below the bar so you should be okay to use it. This is being used for people who put their lives on the line every day. So if it doesn’t meet our commercial specs, it doesn’t go out of our factory. When we are developing new materials that can be a pretty iterative process because we are trying to come up with a new material that meets a performance requirement, I wish it were more exact than it was sometimes. There is a fair amount of iteration. So for us when we test we come up with a new material we test it. If it doesn’t work then we have a fair amount of science around how we formulate the material and it will be an iterative process to get it to meet that performance bar.

Wharton Aerospace & Defense Report: Because of the science behind this, do some of your materials fall under export controls?

Wojcik: Yes a fair amount of what we do if it goes outside the U.S. would be subject to ITAR [International Traffic in Arms Regulations].

Wharton Aerospace & Defense Report: And that must be difficult because you are trying to incorporate your products into a commercial product as well military?

Wojcik: The way I think about it is that we have some products that have dual uses for military and civilian. So I think we have been reasonably successful in getting out into the market for those things that are for defense use or for defense application those are covered by ITAR. And our view on that is what we are trying to do is we are trying to grow our business but at the same time our purpose is to comply with all of the laws whether they are ITAR or commerce related or others. So for us it is not something that I look at and think about how do we work around these, for us it’s about it’s about how do we grow a business and remain in compliance with all of the laws because those laws pretty frankly are pretty important. It’s equally important to make sure that the technology and the product doesn’t end up in the wrong hands.

Wharton Aerospace & Defense Report: Commercially airlines have been cancelling or deferring orders during this recession [although some orders have been picking up at recent air shows] and I just wanted to ask you how you see this presenting new business opportunities in terms of marketing your product for this next generation of airliners which are going to be lighter, stronger and more fuel efficient. Do you see that as a business opportunity?

Wojcik: Well I see the drive for lightweight as a huge business opportunity although if I reflect on our products, we sell very little into commercial aircraft. The vast majority of our business on the aircraft side goes into defense and on that front there is a huge need for enhancing the protection while reducing the weight. So for us if I were to boil down the focus of just about all of our R&D efforts into one sentence, it would be: increasing the protective ability of our products while lightening the weight, which has huge opportunities not only in aircraft but also in ground vehicles, naval vessels and most importantly, body armors on individual soldiers. Because if we think about our soldiers — they’re in some pretty demanding environments. There is a lot of weight they are carrying around, in hot environments, in high altitudes and taking that weight off is incredibly critical for them being effective.

Wharton Aerospace & Defense Report: That’s a huge issue with body armor— just in terms of body armor and the gear that soldiers carry can add up to a hundred pounds.

Wojcik: Clearly body armor is a portion of that. You know I have spoken to many former soldiers and they were talking about carrying around a hundred pounds, right. Now these are people that are you know 160 pounds carrying around an extra 100 pounds on their back in the heat, at altitude, and they need to move around very quickly in a very dangerous environment. So you can understand very quickly how critical lighter weight is.

Wharton Aerospace & Defense Report: In terms of new materials, one of the expensive aspects of owning any kind of product, whether it is a ship, or an airplane, weapon, body armor, etc., is maintenance. How are some of your products helping to reduce that operating costs?

Wojcik: I think there are a couple of things to it. One is the materials that we have are made out of polyethylene, which is a pretty inert product. Things like corrosion, and water, and grease don’t tend to damage it. So one of the big benefits is that our products last very well in service, it’s not like metal, which tends to corrode or rust. They hold up very well and they are very resistant to environmental and chemical things. The second thing is really around this benefit of weight and how it translates into maintenance. If we are reducing the weight that means that whatever the equipment is, let’s say an aircraft, it can carry more payload. The weight savings that we provide translates right into additional payload. So we tend to see some pretty big savings if each of the individual aircraft can carry additional payload. You can actually reduce the number of aircrafts to carry out the mission because each of them can carry a higher payload.

That has huge dividends not only from the standpoint of being able to procure fewer aircraft. It also has tremendous implications on maintenance and logistics because since there are fewer pieces of equipment there are fewer spare parts and a lower need for transportation of all those things. So from what we have seen, the lighter weight has huge benefits from procurement to maintenance to logistics and all the way through the whole system.

Wharton Aerospace & Defense Report: Materials like composites and fibers are playing a huge role in our economy, whether its defense or commercial. I want to get a sense of who you consider your biggest competitors and how are you differentiating yourself and your products from what they are producing?

Wojcik: If I were to reflect on that there are clearly a lot of good and formidable competitors. I think if I were to pick the top three, the three that would come into mind would be DSM, Dupont, Taigen and maybe the fourth one would be all the other materials out there, right? Because as a composite maker sometimes I am competing with people who make similar composites and sometimes I am competing against someone who makes a different material and [I’m] trying to get them to switch to my material.

So that is how I would view the competitors out there. In terms of what makes us different. While I think all the competitors that I named are very high performing, very respectable companies, we are not the biggest in terms of the share of capacity. What we really try to focus on is pushing the state-of-the-art forward in terms of the lightweight and higher performance. So I think the things that make us interesting are really not only about our current product portfolio but a lot of things that we have in the works to really change the equation around weight and protection and really drive some very different things in terms of planes that are flying and soldiers that are on the ground, and finding a way to do that with dramatically less weight.

Wharton Aerospace & Defense Report: Is there anything else that you would like to add that I haven’t asked you about?

Wojcik: No, I don’t think so. I think you have brought out a lot of very interesting and relevant points, in terms of all the things we go through everyday.

Wharton Aerospace & Defense Report: Thank you so much.

Wojcik: Thank you, it’s a pleasure.