Honeywell's 2025 Strategy: Navigating Divestitures and Deepening Focus to Lead the New Era of Industrial Automation with AI and Localization as Dual Drivers

As we move into 2025, global industrial automation giant Honeywell is demonstrating a series of clear and decisive strategic shifts. Through a bold divestiture to sharpen its focus on core operations, a wave of major product launches centered on AI and sustainability, and the continued deepening of its "East for East" strategy, Honeywell is actively reshaping its future. The company's goal is clear: to emerge as a more focused and competitive leader in global automation.

I. Major Strategic Reshaping: Sharpening the Automation Core to Pave the Way for Becoming a "Pure Automation Enterprise"

In a move that sent ripples through the industry in July, Honeywell announced it was evaluating strategic alternatives for its Productivity Solutions & Services (PSS) and Warehouse and Workflow Solutions (WWS) businesses. These units, which serve the transportation, warehousing, and logistics markets and collectively generate nearly $20 billion in annual revenue, were once key components of the company's diversified portfolio.

This action is not an isolated event but a pivotal step in Honeywell's recent series of portfolio adjustments. Chairman and CEO Vimal Kapur made the strategic intent unambiguous: this move "marks an important milestone on our path to creating a pure automation company and succeeding after the planned spinoff of Aerospace next year." The goal is to shed non-core assets and concentrate all resources and energy on its three core automation domains—Building Automation, Process Automation, and Industrial Automation—which are seen as having strong, long-term structural growth potential.

To fuel this focused growth, Honeywell appointed industry veteran Jim Maser as the new President and CEO of its Process Automation business in the same month. Maser's deep background in energy services signals Honeywell's strengthened commitment to driving automation and digital transformation within the energy sector.

II. The New Technological Frontier: AI-Powered Evolution from "Automation" to "Autonomous" Operations

While streamlining its portfolio, Honeywell is simultaneously firing on all cylinders in innovation within its core technologies. The central theme is leveraging Artificial Intelligence (AI) to propel industrial operations from basic "automation" toward more advanced "autonomous" functioning.

Revolutionizing Life Sciences Manufacturing: In April 2025, Honeywell launched the cloud-native AI platform TrackWise® Manufacturing, designed to transform manufacturing in the life sciences industry. This platform tackles long-standing industry pain points—like inefficiency, errors, and drug launch delays caused by heavy reliance on paper-based processes—through AI-assisted workflows. It aims to deeply integrate the "Quality by Design" philosophy into manufacturing, helping pharmaceutical companies bring products to market faster and more safely.

Upgrading Industrial Cybersecurity: At its user conference in June, Honeywell unveiled AI-based solutions for "Cyber Proactive Defense" and "OT Security Operations Centers." These solutions utilize behavioral analytics to establish security baselines for industrial control systems, proactively identifying and mitigating potential cyber threats to provide forward-looking protection for critical infrastructure.

Expanding the Digital Twin Platform: The capabilities of its Digital Prime digital twin platform have been expanded, integrating three core functions: solution enhancement support, enablement services, and panoramic assurance. This platform allows users to fully test and modify engineering projects in a virtual environment, thereby reducing downtime and increasing output upon physical deployment. It serves as a critical tool on the path to autonomous operations. A Honeywell survey underscores this trend, revealing that a striking 91% of energy sector decision-makers believe AI has the potential to enhance energy security in the near term.

III. New Growth Engines: Deepening "East for East" with a Flourishing Wave of Localized Innovation in China

Honeywell views China as a core engine for its global innovation and growth. Its actions in 2025 strongly demonstrate its commitment to deepening its roots in the local market.

Hosting the First China Growth Summit: In early July, Honeywell chose Shanghai's Pudong district to host its inaugural global Growth Summit. The event, attended by over 250 guests, focused on discussions around automation, energy transition, and the future of aviation. This choice clearly signals the company's intent to place the needs of the Chinese market at the heart of its global strategy.

Launching "Created for China" Products: At the third China International Supply Chain Expo, Honeywell premiered two automation products developed by its local Chinese R&D teams:

Smart Shipping Solutions: Covering ship-shore collaboration, fleet management, and energy efficiency optimization, these directly address the sustainable development needs of China's intelligent shipping industry.

Efficient Smart Operations & Maintenance Module: Developed based on the Building Performance Suite (BPS) platform, it focuses on asset management, automated inspection, and predictive maintenance for complex building operations scenarios.

Additionally, Honeywell released a white paper titled The New Engine for Intelligent Manufacturing, exploring the path to lean digitalization in China's chemical industry.

Gaining International Recognition for R&D and Manufacturing Capabilities: Six automation products (such as the RAEGuard energy storage gas detector and the HF700 series of fixed scanners) researched, developed, and manufactured in China won the prestigious 2025 Red Dot and iF Design Awards. Notably, over half of these award-winning products achieved complete localization across design, R&D, and production. This proves that Honeywell's China team not only serves the local market but also possesses world-class innovative capabilities.

Strengthening End-to-End Supply Chains: The Nanjing facility of Honeywell's Smart Industrial Technology Group, one of its largest global sensor production bases, achieves an impressive output rate of "an average of 9.5 sensors per second." This complete local value chain—from R&D to manufacturing and service—significantly enhances the resilience of Honeywell's supply chain.

IV. The New Future Landscape: Where is the Automation Giant Heading?

Looking ahead, Honeywell's strategic blueprint is coming into clear focus:

A More Focused Portfolio: Following the disposition of the PSS/WWS businesses and the spinoff of its Aerospace segment, a "new Honeywell," sharply focused on its core automation arenas, will emerge in 2026.

A Smarter Technological Path: AI will be deeply integrated into all its products and solutions, becoming a universal enabler for helping industrial customers achieve safe, reliable, and efficient "autonomous operations."

Deeper Local Synergy: China will continue to serve as a key source of global innovation. The "East for East" strategy will deepen further, with localized products and solutions not only serving the Chinese market but also radiating their influence globally.

In summary, throughout 2025, Honeywell is accelerating its journey toward an AI-driven future fueled by deep local innovation through a decisive "streamlining" initiative paired with a concurrent technological "strengthening" plan. In a complex global industrial landscape, this automation giant is working diligently to transform itself into a more agile and powerful leader.

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