Speaker 1:
From the library of the New York Stock Exchange at the corner of wall and broad streets in New York City, you're Inside the ICE House, our podcast from Intercontinental Exchange on markets, leadership, and vision, and global business. The dream drivers that have made the NYSE an indispensable institution of global growth for over 225 years. Each week, we feature stories of those who hatch plans, create jobs, and harness the engine of capitalism, right here, right now at the NYSE. And at ICE's 12 exchanges and six clearing houses around the world. And now welcome Inside the ICE House.
Pete Asch:
The technology in our lives allows people, computers and even the occasional blender to share information. It's where I when I pick up my phone in the morning, the operating system knows which apps it suggests I open. When I walk into my kitchen, my Nest Home stands ready to play my preferred news and music to start the day. Even my car tends to have a good guess at where I might be traveling. We're often more surprised when technology isn't standing ready to assist us than when our Twitter account starts serving up ads for podcasts on the very topic we were discussing over drinks the night before. We talked about how the world's been transformed from passive computing to actively searching of information. The discussion usually centers around the innovators dreaming of what is possible, cloud computing, machine learning and the steady rise of artificial intelligence that helps make complex decisions far quicker than humanly possible.
Pete Asch:
Today, we're turning our attention to the wires, connectors, and sensors that hold our modern lives together and help make everything seem just a little more customized to your own needs. Joining us on the podcast today is CEO of TE Connectivity Terrence Curtin, whose career has quite literally been focused on making the connections that drive the world. Our conversation with Terrence Curtin on producing the connector and sensor that innovative companies need to make their technology work, bringing disruptive expertise to scale and what it takes to lead a global workforce of 80,000. We'll be right after this break.
Speaker 1:
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Speaker 3:
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Speaker 1:
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Pete Asch:
Our guest today Terrence Curtin is CEO of TE Connectivity. That's NYSE ticker TEL. In his 20 years with TE, he has held several leadership and executive positions, including serving as President and CFO. He has been on the company's board of directors since 2016. Terrence began his career with Arthur Andersen, welcome Terrence Inside the ICE House.
Terrence Curtin:
Thank you for having me. It's great to be here.
Pete Asch:
So we're going to dive deep into many of the verticals that your company supports today. But can you just introduce TE Connectivity to our listeners who probably don't realize that right now they're surrounded by your products, which can be found not only across the globe, but also in space as well.
Terrence Curtin:
Well, it's a great thing that you're already teed up that we all are all around all of us. And when you think about whether it's a car, whether it's the plane, you may be traveling on, or things that are in your home, a lot of the electronics can get connected by things called connectors, and certainly where electronics continue to go and sensing what we want. You have sensors more and more in those devices. And at TE, we work with the people that consumers would buy from, to really make sure that technology comes to live for what we as consumers want. And we really do it by innovating around the globe. We're fortunate enough to have 8,000 engineers at TE. And that's really where we focus our engineering effort with the people that consumers buy from, to really make sure that next generation technology that we all want, becomes a more standard in our day to day and it's really making sure those connectors, those sensors really bring that data to life, that power to where you need it most. And really the things that consumers rely on.
Pete Asch:
Some people call what we're going through today as the fourth industrial revolution, right? This connectivity, this cloud computing, and I was thinking about how, when I take my car to the mechanic, I've heard from more than one mechanic complain, I need to be both a programmer and a mechanic these days. And I was reading your own family history that your family actually did the transition from blacksmith to those first auto mechanics about 100 years ago during the second industrial revolution, what brought the Curtin family to Reading, Pennsylvania?
Terrence Curtin:
So, from a family perspective, I'm a Pennsylvania, grew up in Reading, Pennsylvania, and certainly relatives that were immigrants from Germany and Ireland and came to the United States looking for opportunity. And on my father's side, you're exactly right. They were laborers that were a blacksmith that then actually grew into mechanics. And certainly, I was fortunate enough that my family gave me some opportunities I could go to college. I am not an engineer, I am an accountant by background and by degree. And what really was great for me personally, was early in my career, I got to be around companies that helped me excel. And they were typically companies that made things. And that happened in my family, it was probably a little bit more natural for me, as I was exposed to it, to be around engineers. And I'm very fortunate to be leading a company that has 8,000 engineers. I do like what I do and I also love being around engineers, and what we bring to the world.
Pete Asch:
What about accounting were you interested in? And how has that background helped you for the success you've had today, leading engineers?
Terrence Curtin:
When I was young, I would say I probably was not the most applied learner. Because I would prefer to be getting out of school and going to do sports. And it would pretty much be any sport, whether it was football, whether it was baseball, also basketball. If I got out of school, it was not to study when I was young, it was really to get involved in sports, I love the teamwork. I also am pretty competitive as well, as you can imagine. So those things were things that when I was young, I was fortunate enough to do well in school, but I would say I probably wasn't the highest applied learner as I was trying to mature as a person. And when I got to college, I did make a choice when I went to college, to get into accounting. I'm not sure there was magic in that. But I did enjoy it. And during my college years, I really think that's when I matured. I got to go to a small liberal arts school in Reading, Albright College.
Terrence Curtin:
And it was the right choice for me as I was trying to learn my whole learning process. And it allowed me to be successful, and really the foundation of how I think today, that's almost 30 years ago. So I've changed a lot in 30 years. But certainly it was a great foundation. And the accounting side of it really was a finance backbone. And like many of our engineers who dream to solve problems, I dream in numbers around, hey, how do we make money? How do we make a difference, and really ensure that we create opportunities for our people. And really that financial background, I think it served me well in my roles here, being somebody who is not technical in the technical business.
Terrence Curtin:
But it's also about, I know who I am. And I make sure I have engineers around me and technical teams around me, that really make sure we can bring the value we need to bring to our customers. So it's been a good balance for me, I'm probably a little bit of a frustrated engineer, I probably should have been an engineer, but I think I'm doing okay with what I've accomplished here. And what we're trying to still accomplish here at TE.
Pete Asch:
The founder of Intercontinental Exchange, Jeff Sprecher, is an engineer turned to finance, so it should be the opposite. And one of the things that he always talks about is this idea that engineers solve problems. And even as your first job in accounting with Arthur Andersen, my understanding is that you were doing that for them, you're going around to different companies coming in and solving problems. And so how did your initial work coming in seeing all these companies in operation prepare you to what you do now, which is oversee offices across the globe? How did you transition from numbers to I need to know more about the overall body of work happening behind the scenes that makes this office or this client tick?
Terrence Curtin:
I was very fortunate. Unlike most students coming out of school, I had dreams of this was what I think my career is going to be. And actually when I got out of college, and I got my opportunity with Arthur Andersen, it was probably more about being in financial services where I thought I'd want to be. And what really occurred was I get exposed to a lot of different businesses. And I learned the businesses that excited me were ones that manufacture and certainly ones that had people that made things and solved problems. So I was fortunate enough getting the opportunity of Arthur Andersen what I thought I wanted to be exposed to from an industry, got a little bit turned when I said, hey, that industry, it just didn't click it didn't get me excited as much.
Terrence Curtin:
And then I think the other thing in my development and I was fortunate that Arthur Andersen was tremendous from a training and development was they threw you into the deep end of the pool quick. Unlike most professional services firms, they threw you in quick. I got exposed with executives that were twice my age to have to present to, you had to lead a global team. Most of my clients were global, and how you had to communicate and almost how we work today, hybrid wise due to COVID, you really had to show that versatility of how do you lead, how do you influence, and I really believe they were foundational things that helped me as I went on. And then certainly, and getting the opportunity to come here 20 years ago, and in a finance role, just continue to development.
Terrence Curtin:
So really pointing yourself in the right direction is how I would probably say my career was, I also joke with our rotational teams that are started with us, I thought I was going to be a partner in an accounting firm by now. And I never achieved that. So it's good to have aspiration, but also make sure what excites you. Get yourself around people that you like to be on a team with to win. But then also, you need to be excited about what your company does. And I think it's one of the things I've been very fortunate about here at TE that I've been given opportunities, but I also have company I get excited about what we get to influence on the world I get excited about, and it does create a lot of great opportunities both for the company and for me.
Pete Asch:
I believe when you joined it would have been Tyco International, which a few years later split into Tyco Healthcare, Tyco International and TE Connectivity, which originally was Tyco Electronics. Going back to that, how was that decision made? And how did that set up TE for its current successful path?
Terrence Curtin:
Well, when you get into the separation of Tyco International, I think the key was, and you still see it a lot today, you need to be focused, especially with how fast the world is going. And I think, the conglomerate days are well over, certainly Tyco International had issues on top of being a conglomerate. I won't get into but you really got into an opportunity where was, hey, you had a healthcare company, you had an electronics company, you also had security and flow company, which was Tyco International then, it really was why do these make sense together? And how do we really make sure each one drives innovation at their own pace for their markets. And then that decision was made well above me. In some cases, I was at the right place, at the right time, to be able to participate in the separation.
Terrence Curtin:
And I was also fortunate enough as our CEO came in, he chose me to be his CFO, as a public company, CFO for the first time. And I think it was another one of those events in my background, we talked about my earlier career, I got put into some positions that I was not a public company, CFO, and got to learn that on the job, like a lot of the CFOs of the world, and really helped me just flourish. And once again, being around a company like TE, I liked what we did. It made that hard work worthwhile. And certainly I think it's been good that that decision was made to split, not only our company, but all the pieces of Tyco, and it's created much better companies than if they stayed together.
Pete Asch:
And you touched on a little bit, it reminds me of a conversation we had a few years ago with Kristin Peck, she's now CEO of Zoetis, but that was part of Pfizer. And I remember for her episode, she talked about the absolute fear, but also excitement of that day after going public or spinning off. And realizing that it was just you. So you mentioned it grew, but how did going from reporting up to a larger company to being the person getting those investor calls directly? How did that influence your career and prepare you to eventually move up to the CEO position?
Terrence Curtin:
I think your perspective that you shared is right on. When you're a division in a bigger company or a segment in a bigger company, there's numerous times you say, "Hey, I wish I just had the ball myself." Other people are making decisions. You may not agree with them, you may question whether you're a priority of the bigger company. And it's one of those things I go back to some of the sports we talked about, was never timed. We would sit there as a team going, why don't they just let us do what we want to do? And then it occurs, and you realize a couple of things. A bunch of the things you always thought you want to do, you got to do. But there were other things that the bigger company did, that you didn't have a lot of expertise in. Like talking to an investor, like getting your own financing.
Terrence Curtin:
These were things somebody else did for you. So when I had the CFO opportunity there were things I really had to grow on. I think I had good finance acumen. There were things that the parent company did and I think no different anytime you have career moves when you go up. There's always going to be things that you do that you never did before. Everybody who's been a CEO, there was a point in time they weren't a CEO. And those types of things are great development opportunities. But I also think it really comes back to, are you focused on the things that you don't know? Where do you need to lean in and learn? Where can you get people around you, that help you get there? And in my case, I had to build a team, because I was in a CFO role that we didn't have. I feel very pleased. And looking back, I built a good team, because it allowed me to work on the things I did not know.
Terrence Curtin:
And as a public company, we had a lot of hard decisions we had to make. We had pieces of our business that we didn't think we should be in. We also had some businesses that were really good, we needed to invest more in, that have gotten us to the position we're at today. And so when we separated, it was really around making sure how do we get to the portfolio we want to play offense with, versus the portfolio we were birthed with as a public company. And it's one of the things probably in the first half of our existence, was focusing on, how do we get to the portfolio we want to win with, which is the portfolio you see of what TE is today, which is very different than the portfolio we have when we separated. And each one of those events, creates exposure, creates some nervousness. And there were mistakes, there's always going to be mistakes, when you're in business, you're making strategic decisions.
Terrence Curtin:
But I will tell you that those decisions were very good, and also put us in the position we are today that we can talk about our focus on electric vehicles and how we make that innovation come to the world. Our focus on how were the interconnects we do around cloud computing are really, we saw that accelerate with what we've all been through with COVID over the past year and a half. And these are the things that we worked hard on, eight, 10 years ago to really make sure we were going to invest in those key areas which have been driving the growth and the performance we're seeing today, but it started on a lot of hard decisions eight to 10 years ago.
Pete Asch:
How do you make sure your engineers stay ahead of the trends and on the cost of where your products will best push technology? The examples you gave, eight, 10 years ago, no one had any idea that's where it's going. How do you make sure that not only you in your role as CEO, with that across the company everyone is not happy with what they're doing today, but always looking at what's next year and what's 10 years down the road?
Terrence Curtin:
Well, one of the things that we spend a lot of time is on where do we point our engineers. And it is about being as global as we are. It is about making sure our engineers are at the engineering centers of the world. And it creates some synthesis that we are basically in where the architecture is being designed. We're in with our customers. And that allows us a pretty good bird's eye view about where those steps are going and the problems that need to be solved. So that we have our 8,000 engineers and of those 8,000 engineers, about 2,000 are in the United States. Another two to 3,000 are in Europe, the rest are in Asia, is really making sure how will we add the engineering nodes of the world in those key applications, like the ones I talked about, I know we'll talk about more, to really make sure where those architectural bets need to be made to make sure that technology comes to life and what sensing and what connecting technologies are needed.
Terrence Curtin:
And that is really a key part of how we make those decisions. Because our engineers at any point in time, those 8,000 engineers are working on about 10,000 projects across our engineering enterprise. And it is very important that we get that feel from the customer and that it is more kickback than just technology out. And it's really something that I think our teams do well. And we're extremely paranoid about to make sure we don't get it wrong.
Pete Asch:
After the break, Terrence Curtin, CEO of TE Connectivity and I discuss how TE believes connections should go beyond technology in our world and how companies and people are interacting. That conversation is coming up right after the break.
Speaker 6:
As the gold auction and also the LBMA gold price is, the world's price for gold, particularly gold which is delivered in London. Four banks would travel to a room next to the Bank of England twice a day in order to run an auction verbally. And it worked like that for about 100 years, when some of these firms moved out to Canary Wharf, they decided that actually it was too much to be sending people to the room. So they moved it to a phone call to buy and sell in establishing a price. IBA took over the auction in 2015. And we moved it to an electronic auction on the web ICE platform so it's fully audited to proper electronic liquidity window or market, buyers and sellers can come together, is still run as an auction in rounds of 30 seconds.
Speaker 6:
And the final price we use is the benchmark for the entire gold market. It's been extremely successful since we took over. Volumes have increased and they pretty much more than doubled. We've actually nearly tripled the number of participants that we have as well, and we publish the data transparently on our website so anyone can come and see what actually happened in the auction. We introduced a centrally cleared model with ICE as the central counterparty, because that makes it much easier for new firms to join, because up to 79% of the volume has gone cleared. This is kind of the pattern that ICE has seen through how different markets have developed. But normally that's takes 10 years, whereas actually it's taken 10 weeks in the auction.
Pete Asch:
Welcome back, before the break Terrence Curtin, CEO of TE connectivity, that's NYSE ticker, TEL and I were discussing his career and TE's launch as a public company. So I was listening to an interview you did a few years ago, and what you cited a stat that the modern car has over 2,000 sensors and connectors. A number I'm sure that's even increased I think in the four years since you did that interview, there's been a lot of discussions around shortage of micro trips and other supply chain issues affecting the ability for the large auto companies to get their products to market, have those issues affected TE as well?
Terrence Curtin:
Well, when you look at it, you're right. When you think about the proliferation of the car, electronics in the car, the compute that's required in the car, and realize it's not just the infotainment items we all rely on. It's the safety items, it's the efficiency items that you also have that really make sure some of the fuel consumption that is so important. It's needed for all of it. And that the car has become a computer. And it's pretty amazing in how reliable it is. To your point, I would say a couple of things. There certainly have been supplied shortages of semiconductors. But it's also an element of broader than that, just as the world stopped for a little bit in COVID and car manufacturers in the western world were taken down. We've all been challenged, and how do we reboot our global supply chains and automotive industries just in time supply chain?
Terrence Curtin:
So we have been impacted from a supply chain element as the whole system gets up and running. We had been impacted from semis in relationship to some of our sensor products. But I will tell you the the problem we're all dealing with is that the consumer showed up and wanted more vehicles, vehicles with more features, more electric vehicles. And let's face it, those types of technologies, as they push forward, are always going to use more chips. And because the vehicles getting smarter, so clearly a challenging supply chain time, post-COVID I think we all our customers, ourselves, it's come back more than we expected and the consumers really showed up. And it's something I feel pretty confident that we're going to get fixed, it's just going to take a little bit longer. But the need for more intelligence, more distributed throughout the vehicle. And throughout a lot of the devices in our lives are very important. That's what we help to do here to make sure that all gets connected and get sensed. Really make sure whatever feature a vehicle wants or any other device needs, we play a role on it.
Pete Asch:
Assuming that the short term issues clear up, what is your outlook for the automotive industry in general? I mean, is that demand here to stay? Or is that just pent up two years that will fade over time?
Terrence Curtin:
What's interesting about the global auto picture is, the global auto picture back pre-COVID was a little bit of a slowing environment. And right as COVID came around, you really start to see parts of the world accelerating. And you also saw the trend around eVie accelerating. So really COVID hit, slowed some things down. But we're still below where car production was just back in 2018. And I think once the supply elements come into play from the chips and the other shortages and certain other key materials, you are going to continue to see an acceleration of auto built globally. And we need to get through the supply elements. But the other thing that we've been excited about is just the eVie adoption rate, because during COVID, while auto production went down, the number of electric vehicles globally went up.
Terrence Curtin:
And in some ways, we always joke in TE, the electric vehicles stood the test to COVID. And you look here today, there'll be about nine million electric vehicles sold on the planet. Just three years ago, about three million. And so it's tripled in a time where auto production is still not even back to peak levels. And what's great when you're seeing all the features car companies are coming out with. And we're in the middle of that, as that whole architecture of the electric motor gets designed. We get to work with all our global OEMs to work on how do they launch those vehicles, whether they're a new entrant, like the ones we know, so well, whether it's our traditional car companies that are accelerating very fast to bring their scale.
Terrence Curtin:
And it is something that we've been investing in well over 10 years, with some of our Asia customers around battery powered vehicles and hybrid vehicles. But it's really nice to see the global adoption continuing to pick up by the consumer. And we get really excited that that's going to be a bigger business opportunity for us, and that we get to play a role in how that is real for the world.
Pete Asch:
Yeah, I mean, I think one of the things we're seeing at the New York Stock Exchange is the funding of that. I mean, over the last two years, the number of particularly spat combinations of eVie manufacturers has really gone through a hyper growth. Take us, part of the expression under the hood a little bit, you have this eVie come to market, they raised millions, sometimes hundreds of millions of dollars, is that then when they reach out to you and start saying, hey, help us make this better? I mean, where do you fit in this process? How does TE get involved?
Terrence Curtin:
So the first thing that I think is special about TE that makes us very differentiated is we're essentially on every car in the planet with how broad we are, and also how global we are. We've been working on eVie challenges and problems for well over a decade. So if somebody gets a startup, we would already be working with them. And in some ways, they would be looking for us to get our engineering knowledge about how the car's infrastructure works. How does power flow through a car? And when you get into an electric vehicle, one of the things that is very important for everybody to understand, it's a completely different power infrastructure. If you take your traditional combustion car, you typically run on what we're used to the 12 volt battery system that's been around a long time that everything hangs on, that system comes over to an electric vehicle, but then on top to really get the power that you need to drive these electric motors, as well as to make sure you can charge that car, you're dealing with things that are up to 800 to 1,000 volts, which is very different than the 12 volt.
Terrence Curtin:
And that create very unique engineering challenges. Certainly we all know about how does range get solved with battery technology? How does things get faster charged, they're the things that our teams are working with the OEMs of the world, whether they're a startup, or somebody that's been making cars for over 100 years, and trying to solve those challenges. And it's one of the nice things that you see in the auto world is you have new entrants, and you have traditional players and they're pushing each other. The traditional players typically know the scale game, the new entrants are bringing in new ideas. And as this architecture is really coming together. And guess what? It's still being developed as we speak. And it's something that really puts good pressure on the competitive space. Because we have to realize these vehicles have to be at a cost point that people can afford.
Terrence Curtin:
And we're not there yet in total, but it's where some governments around the world are stepping in to help to make sure that adoption occurs for the sustainability goals we all have together around the planet. But a startup to your question, we would be working with already, because they want to make sure the quality of the product that they're coming out with when they have that initial launch, a consumer has very high standards from a quality and a feature set. And if they're not meeting it, that startups really going to struggle, being a successful company.
Pete Asch:
I want to get sustainability in a second. But one thing that came to mind when you're talking is how do you allow conversation to happen not only between, you have some engineers working for one car manufacturer and others for another car manufacturer, but how do you sometimes realize, oh, wait, this team working on the European Space Exploration, they actually might be working on something that we can use in this startup in Wichita, Kansas. How do you make sure that your own company has that shared communication connectivity, for lack of a better term?
Terrence Curtin:
We basically made sure our innovation teams have forms that are allowed to share. Because there are elements like you mentioned, some of the things that we brought to the electric vehicle space were things we did in the aerospace and defense world. And it was something that our aerospace engineers worked on. Might have been a space application, might have been something that was in a high power aircraft. Actually, our automotive team took it over and automotivized it, got it to a different price point, also got it to the materials. And the environment is very different. Taking something engineered for space and putting in a car will not be affordable, it will have exotic materials. So that's something we do very well. Once a year, we also have a technical conference, where we get our engineers together that they do show off their ideas, where do they feel they're taking the technology, and also areas they think could be shared across the organization.
Terrence Curtin:
So it is something from a community around innovation, we do expect our engineers to participate in, they do share white papers with each other to really say, hey, what are the innovations they think could be used in broader application maybe then were they designed with a specific customer, but I think it's an important part of a community that allows us to play offense and leverage our greater know how to make sure it's shared for the benefit of everybody in TE.
Pete Asch:
What is One Connected World? And how does that help you decide how to respond to sustainability and other issues?
Terrence Curtin:
One Connected World is our report on ourselves and all the things that we're committing to. And let's face it, over the past few years, there's been a lot of discussion around ESG. Our One Connected World report is what we're holding ourselves accountable to. And when you think about sustainability, because we're there, there's an element that is we get to impact sustainability in two different ways. Number one, which is a lot of this discussion that we've been through is how do our engineers help our customers make things more sustainable for the planet, and make a difference on the planet. And that's something we talk a lot about. And that is something that really gets our engineers excited, certainly ties into why TE exists and our purpose. The other element is, what about our impact on the world within TE?
Terrence Curtin:
And what we do in One Connected World, we share not only some of the innovations that help the world and make things more sustainable in the world better. But then we also sign up to our commitments about what is TE's impact and how we manufacture, how much energy do we use, how much waste we generate, as well as recycle and our goals around those. And certainly our water usage, and it is something, having a company that's full of engineers, they like to solve problems. And that's one of the things I think is really great. And if you even take tea today, while we have 140 manufacturing sites globally, we're getting close to a third of them run on carbon free energy sources, between renewable, maybe nuclear, and they're things that are about and we're going to continue to accelerate that.
Terrence Curtin:
And One Connected World lays out what we're signing up for, to really make sure not only do we do the innovation part around the electric vehicle, or where we help our customers with renewables, or how we help data centers use less power. But we're also signing up for how are we going to have less impact on what our plants do in the use of electricity, greenhouse gas, emission, water and recycling, and that's what we issue once a year. It's not just sustainability, it's also what we're signing up for societal impact, and where we get focused on. And then certainly one of the things that I think goes without saying is, from a governance perspective, I feel very good about where we're positioned there that we also highlight how our board acts, and also the governance tenants that we have as a company too. So it touches upon all elements BSG. But we call it One Connected World is our name for it. And yeah, certainly our employees love that's called One Connected World.
Pete Asch:
And one of the things that you mentioned, like governance idea, and I imagine with COVID, it's probably gotten even more complexes, you're overseeing footprints and all these different areas, how do you make sure to manage specifically with COVID-19, but also, in general, the different rules and requirements in place for the last two years combat the virus, but in general to make sure that a company is acting to fit the cultural norms of that area?
Terrence Curtin:
One of the things I think with TE is while we are a big global company, if you got to see our people around the world, you would say we totally reflect the local culture you're in. And COVID has been a challenge for all of us, and it's still amongst us. So let's face it, depending where you said is how COVID is impacting you. And one of the things that I think was helpful for us, even in this challenging time was we started to feel the impacts of COVID. Not in March 2000, but in January 2000, because of our large presence in China. And a lot of the things that we learned as we were combating COVID because there's two faces of tea. There's employees that can work at home. Most of our employees can't work at home, they might be in a factory. They may be engineers in testing labs that you can't take a testing lab at home. And one of the things we had to do to make sure we can keep our operations running, we also had to come up with many ideas around how do we keep our employees safe, where they did have to continue to work through the pandemic in our sites.
Terrence Curtin:
And one of the things I'm very proud of that we did was, a lot of our knowledge sharing about what we learned in China and Indonesia. We moved around the planet, as the pandemic, and COVID moved around the planet. And it was something that I feel gave us an advantage. It also gave us very high marks from our employees, how we were proactively keeping them safe, and a time where we all know COVID can be isolating, can be overwhelming. And we're asking people to change routines, that in some cases were routine for decades. I truly believe it was a good mix of how do we keep our employees safe? And even as we asked our employees every year, how are we doing to keep you engaged, it was one of the things they came back to us and gave us very high marks on as a global team of hey, you kept me safe, you kept me up to date.
Terrence Curtin:
And as vaccines become available around the world, we're trying to help our employees get vaccinated if they want to make that choice, but certainly not everywhere in the world has vaccine access. The other thing that I would say to your question, which is more around how do we manage the different cultures of the world is, our teams reflect those cultures. And when you think about our global businesses, we are typically organized into 11 main businesses, they are typically based upon market, whether it be automotive, whether it be medical, whether it be industrial equipment. And those teams reflect the cultures, and the people aware that innovation and engineering is done. And that is something that gives us a very good cultural flavor, a very global cultural flavor. And I think with technology that's very important. The technology we have in our logic due to global developments and to get to scale. And it's something that has served us well, both from a people development, as well as served our business well as these technology trends continue to go global. And we get to bring the innovation to the world.
Pete Asch:
And speaking of that innovation, I think for listeners at home, a great way to kind of see what TE covers is actually go to your Twitter feed, first five or six tweets really highlight practically every major innovation industry that you can think of, you're touched on from transportation, aerospace, energy, what are some of the areas that you're seeing the biggest innovation in currently, and what is the most exciting possibility across those 11 fields that you'd mentioned?
Terrence Curtin:
Clearly, we talked about the one and when you get a mega trend that totally takes a key part of an industry and changes it, it is around transportation, and what we're seeing around the electric power train. If we would have went back five years, we might have talked a little bit more about electric powertrain and autonomous driving. But I would tell you, it's full steam ahead around the electric powertrain. So clearly, that's number one. But what I would also say is great about that is you're also seeing those powertrain elements get into the heavy trucking transportation space. And you're also seeing the emerging technologies around electric flight. Now, electric flight is much more nascent than an electric vehicle from how does that grow. But I do think you're seeing that technology is going to have a very long runway, but certainly a lot of questions to be answered. So we get excited about those.
Terrence Curtin:
The other element that I would tell we're excited about, we play a key role in, is the role we play in medical. I mean, clearly, health is so important for all of us. And at TE we sit there and go, how do we make health create better outcomes more accessible? And what we've been very focused on is what happens around interventional procedures. And this is where we partner with the largest device makers of the world, which are the who's who, that are really bringing therapies, but how do we bring our sensor knowledge, our connectivity knowledge, to really make sure you can do procedures that get patients back quicker, better outcomes. And that can be any interventional procedure, whether it's be on the brain within the heart. And it's something we've been investing in and really working with our customers on.
Terrence Curtin:
And what we get excited about, not only is the procedures and the outcome is, every minute, there's about 120 patients in the world, being worked on with a device that has our product in it. And those types of things, I still think there's a lot more to do there. And also how does that get more global? There's another one we probably don't talk as much about but it is something in addition to what we talked about in transportation is very important. The last one I would mention, which is one that accelerated clearly during COVID time is, what we all use from a bandwidth perspective. And we realized it beforehand with the devices we use, but how important the bandwidth and the cloud data that we all use. And certainly there's questions around cybersecurity, and that such that still need to continue to be worked to accelerate, but our role is really around how do you make that bandwidth reliable, and at the speeds that really make sure we can have every type of meeting, we want to have in parallel, whether it's video, or voice, that really doesn't break down on us.
Terrence Curtin:
And we get to work with the cloud providers of the world to really work on them with that infrastructure. And that speed and that is another big thing that when we sit there, high speed, that when I started 20 years ago, is very low speed today, and high speed that we're even working on today is just impressive. And we're going to continue to play a key role in that, as we make sure as that technology moves, we need to make sure the interconnects and the connected systems that we provide for that, really make sure it doesn't create any choke point on.
Pete Asch:
There's the innovation of solving a problem that hasn't solved before. And that's really cutting edge technology, usually very expensive. And then there's how do you get innovation across the profitability? Right? The bottom line isn't always the balance sheet, but you need to make things accessible to the end customer. When you think about how you're organizing the company, how do you balance those two things, you want to make sure you remain cutting edge helping your clients solve the hardest problem, but also helping them make sure that they're putting their investment and knowledge into things that can create an actual usable product?
Terrence Curtin:
Yeah, I mean, I think the first thing is we're very fortunate, we spend about $700 million a year in research and development. In our business models is very important that we do experiment. And most of the things, even the things we talked about today, they don't start as the most profitable product, you need the innovation, you need the scale. And the electric vehicle market, even if we'd sit here today, what the electric vehicle market is today at nine million units, is still only about 10% of the total market. And we get excited thinking about, hey, in five years, when it becomes 30 million to 85 million units, or whatever it is, we think through how do we get to scale that to make that profitability, and it is something that is part of our business process, you need to both manage the current and your legacy portfolio, while also making those bets that drive the growth.
Terrence Curtin:
And in some cases, they won't be as profitable as the old. But it's our job to really make sure we make those trade off decisions. And we expect our teams and the board expects me, that we're going to be placing those bets on the future while managing the current as best we can. Because we also have to realize it needs to be innovation that a consumer can afford. And in some cases, we all get into a little bit of a dilemma where we have great technology, but it's unaffordable. Our job at TE and I think any other company is how are we going to get that technology to mass adoption. And even some of the examples we talked about, that's what we signed up for, to really make sure we bring scale. So it has an impact on as many people in the world as possible.
Pete Asch:
As we wrap up, I mean, 2022 is amazingly just around the corner, and it will mark TE Connectivity's 15th year on the New York Stock Exchange, how has that exposure and frankly, the scrutiny of being a public company helped shape the company's growth? We've been talking a lot about ESG driven a lot by investor interest, but also real world, how has that been?
Terrence Curtin:
Being on the public markets gives us a lot of choices and access to capital that had been wonderful for TE. If you take me and my role, I've only ever known to be a public company executive, both from the CFO side and the CEO side. And that public access is very important. And it's something I don't think we've ever taken for granted. I think the other thing is when people talk whether it's short term or long term is I think you have a responsibility to your stakeholders. And in our case, it's customers, it's our owners, and it's our employees. That's who we focus on. You have to manage the short term and the long term. Pete, in this day and world, you have to do both. And you have to keep those stakeholders. So one of the things I think when you think about, you talked about One Connected World is, One Connected World is not a new document.
Terrence Curtin:
It's a document we've been doing for a long time. I think it's the 10th year of that report. And it's something that's always been our orientation. And so maybe we're a little bit unique in how we thought through it because we've always had that orientation. But I think having the stakeholders in front of you, especially in a time like COVID where you have to make a lot of choices because it is a little bit bouncier than we normally have, with a lot of things that are cycling in different ways, you need those elements to really make those trade offs to make sure you're going to be here decades from now. And I think, being a public company has been good for us. I've never regretted it.
Terrence Curtin:
And I think we've done some pretty unique things from being a public company, how we reshaped this portfolio. And we're excited about all the markets we talked about where they go forward. And we still have a lot more opportunity in our business model of driving more value for our owners as well. So it's been great being part of the stock exchange. We're pretty looking forward to driving more value across.
Pete Asch:
Looking forward to driving more value. Thanks so much Terrence for joining us Inside the ICE House.
Terrence Curtin:
Thank you for having me and I appreciate this discussion.
Pete Asch:
That's our conversation for this week. Our guest was Terrence Curtin, CEO of TE Connectivity NYSE ticker TEL. If you like what you heard, please rate us on iTunes. Other folks know where to find us. Got a question or comment you'd like one of our experts to tackle on a future show? Email us at [email protected] or tweet at us @icehousepodcast. Our show is produced by Kenny [00:45:03] production assistants from Stephan [Caprils 00:45:05] and Ian Woolf, I'm Pete Asch your host, signing off from library of the New York Stock Exchange. Thanks for listening. Talk to you next week.
Speaker 1:
Information contained in this podcast was obtained in part from publicly available sources and not independently verified, neither ICE nor its affiliates make any representations or warranties expressed or implied as to the accuracy or completeness of the information and do not sponsor, approve, or endorse any of the content herein. All of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell or a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some portions of the preceding conversation may have been edited for the purpose of length or clarity.
