InThisIssue
The Top 10 List:
Our Changing Market Profile
This year, ITT Industries celebrates its 10th year as an independent company. In each issue of extra throughout 2005, we will look back at the dramatic and successful evolution of the company over the past decade.
ITT Industries has been a multi-industry company throughout its 10-year history, but the pieces that make up the puzzle have changed significantly. In 1995, ITT Industries was primarily an automotive supplier. Today, it features a much more balanced portfolio. Based on revenues, ITT Industries market profile has changed greatly over the past decade (see sidebar box for charts).
The biggest transformation came in an 18-month period between spring 1997 and fall 1998. First ITT Industries purchased Goulds Pumps, which made the company the largest pump producer in the world and propelled it to a leadership position in the Fluid Technology arena. Next, it bought Kaman Sciences Corporation. Now part of the Systems Division and the Advanced Engineering & Sciences business, it's advanced information technologies and capabilities have contributed greatly to the growth of both businesses, and to the impressive growth of the Defense operation over the past few years.
But the seismic shift came in the summer of 1998, when ITT Industries sold its Automotive Brake and Chassis and Electrical Systems units. This business built anti-lock brakes, traction control systems and chassis systems for the world's biggest auto manufacturers. It represented $4 billion in annual revenues, or almost half of the money coming into the company at the time.
It was a bold move that has proved to be prescient. The automotive market continues to be flat, and the auto businesses that ITT Industries retained -- KONI shocks, Fluid Handling Systems tubing, Galfer friction material and brake pads -- are succeeding through innovation and operational excellence efforts. Meanwhile, water/wastewater and high-tech defense systems are both growth markets.
Based on revenues, ITT Industries market profile has changed greatly over the past decade. In 1995, the company generated 67 percent of its revenues from automotive-related businesses, 15 percent from defense and electronics, and 18 percent from fluid technology. Next year, estimates are that the company will generate 38 percent of its revenues from defense-related business, 37 percent from fluid technology, 15 percent from its automotive and leisure marines businesses, and 10 percent from its connectors and switches segment.
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