Labor shortages across manufacturing, energy, transportation and other industrial sectors are a looming problem for society and driving increased demand for automation, according to Honeywell CEO Vimal Kapur.
Speaking on CNBC's "Mad Money," Kapur said AI is transforming the way companies use operational data, allowing businesses to generate insights, automate tasks and improve decision-making across a wide range of industries.
"The power of AI is going to redefine automation," Kapur said during the interview.
His remarks came as Honeywell prepares to spin off its aerospace business on June 29, a move that will leave it focused primarily on automation technologies. Honeywell's automation operations provide software, sensors and control systems used in hospitals, airports, data centers, semiconductor facilities and liquefied natural gas plants.
Kapur said the company's growing focus on automation comes at a time when employers are struggling to recruit and retain enough skilled workers. He cited shortages of operators and technicians among Honeywell's customers and said demographic trends are adding pressure to labor markets.
"Net workforce is not going to be increasing. It's going to be decreasing over a period of time," Kapur said during the CNBC interview.
The issue extends well beyond Honeywell's customer base. Workforce constraints remain a challenge across several industrial sectors globally. In Taiwan, executives at semiconductor giant TSMC recently identified shortages of skilled workers as one of the industry's most pressing concerns, according to Reuters.
Kapur said AI is making existing automation systems more valuable because they already collect large amounts of operational data. He said that information can now be used to generate recommendations, optimize performance and automate functions that previously required human oversight.
Rather than viewing automation solely as a way to reduce costs, many customers are using the technology to support business growth, Kapur said. He added that companies are increasingly focused on using AI tools to improve operations and expand capacity rather than simply improving productivity.
Honeywell's push into automation comes as companies across industries invest heavily in digital technologies to improve efficiency and manage increasingly complex operations. Demand has been particularly strong in sectors such as data centers, semiconductor manufacturing and energy infrastructure, where operators face growing pressure to maintain reliability while addressing workforce constraints.
Investors have closely watched Honeywell's transformation as the breakup approaches. Shares of the company rose following presentations by its automation division this week, with investors responding positively to the clearer strategic focus of the post-spinoff businesses, according to a Barron's report.
Honeywell has reaffirmed its financial outlook ahead of the June 29 separation and said the remaining automation-focused company will continue operating under the Honeywell name after the aerospace unit becomes an independent publicly traded business.
