Will GE buy Rockwell?

GE has publicly stated that it will shrink its GE Capital division, and has just recently struck a deal with Comcast to reduce its stake in media company NBC Universal. CEO Jeff Immelt has spoken emphatically, many times, about the new GE focus on growing manufacturing and industrial businesses.

GE's recent moves have accumulated a war chest, of roughly $25B cash on the balance sheet at year-end 2010. There are plenty of signals that GE is now on the deal war path for industrial companies. Rockwell Automation has been mentioned as a distinct possibility. Buying Rockwell would allow GE to replace its media earnings, and to grow in the automation arena, where the giant is not even a top-10 player.

JP Morgan analysts have calculated that GE will make a $60 per share offer, roughly $8.5 billion, for Rockwell Automation. In response to that news, ROK share prices jumped 3.6% to a new 52-week high of $48.12 on Monday of this week, and continue to trade briskly.

Why Rockwell? Why now? GE sees Rockwell technology as a plus, and its distribution/installed base in North America a competitive advantage. Too, Jeff Immelt keeps emphasizing global opportunities, and GE would boost Rockwell's distribution on a global scale, to compete with Siemens and ABB against whom Rockwell doesn't stand a chance.

Rockwell responded to the prospects of being bought-out by GE with the usual sweet nothings, "We believe that the highest value for Rockwell Automation shareholders will be realized by remaining an independent company and executing our growth and performance strategy." Heck, what would they say? "Sure, we're for sale!"

Hah! What growth and performance strategy? Rockwell has been shrinking and sinking fast, to the extent that one wonders why GE is even interested.

But, what the 500-pound gorilla wants, it gets. GE's entry will bring new life to the stale and stagnant automation business.

WSJ - Is GE Eyeing a Bid For Rockwell Automation?

GE will emerge as next big automation player

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Future of American Manufacturing

Manufacturing drives the engine of the US economy, and is responsible annually for 90% of new patent applications. American manufacturing drives growth and innovation, investment in technology, new products and processes, and provides the world with some of the best consumer products ever created.

But, with all the off-shoring that is occurring today, is American Manufacturing declining into insignificance?

This month, at a program hosted by Maria Bartiromo of CNBC, six of the manufacturing industry's most influential leaders met at Carnegie Mellon University, to answer tough questions and chart a path forward.

The program was labeled "Meeting of the Minds: Rebuilding America" and was broadcast on CNBC on December 2, 2009. I urge you to view the fireworks that ensued (weblink below).

The program panelists included this all-star manufacturing lineup:

• Jeff Immelt, Chairman & CEO, General Electric
• Hilda Solis, U.S. Secretary of Labor
• Bill Ford, Executive Chairman, Ford Motor Company
• John Engler, President, National Association of Manufacturers
• Dan DiMicco, Chairman, President & CEO, NuCor
• Leo Gerard, International President, United Steelworkers

• Are manufacturing jobs in the U.S. gone forever?
• Does an economy that doesn't produce anything have any real value?
• Has "Made in the USA" died?

America must focus its prowess not on manufacturing commodities, but rather on becoming innovators and specialists in new types of high-value manufacturing such as nano-assembly, chemical or bio mechanisms.

Manufacturing once led America to become the richest nation in the world. It's clear that a resurgence of Manufacturing is what is being planned. In America, Manufacturing will become vibrant again.

Rebuilding America - Meeting of the Minds
The Future of "Made in USA"

Automation World - Future Factories

High-value Manufacturing

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Smart Grid Revolution

The products we run with electricity have changed enormously, but the massive grid that delivers power to homes and businesses has hardly changed at all for over a century.

Today, power companies cannot track the electricity they produce and distribute. They don't really know about problems till customers start calling. And steady leaks are a big problem - about 7-9% of power is lost in the transmission wires.

Consumers have similar problems. They only get a glimpse of their energy consumption when the utility bills come once a month. They pay about the same for power any time, ignoring the fact that power is much more expensive during peak times.

The result is an antique grid that is prone to failures - like the 2003 blackout that hit the NE US and Canada in 2003. Our technologies are 21st century, while our power-grid is barely in the 20th.

The "smart grid" brings networked intelligence, allowing power companies to monitor distribution and respond rapidly to changes. Consumers can use intelligent appliances to control how and when they use electricity for power-hog appliances, which shrinks power bills and smoothes demand.

The smart grid incorporates the use of superconductive transmission lines for less power loss, and keeps track of all electricity flowing in the system. It also integrates alternative sources of electricity such as solar and wind.

Building the smart grid brings the power distribution into the Internet age. Information is used to optimize power usage, making the entire system operate much more efficiently and reliably.

People's homes will have more detailed information through energy-monitoring tools and web-based programs that give a real-time view of how much energy is being used, which appliances consume the most, and how homes compare to others.

When power is least expensive a smart grid could turn on home appliances like washing machines, or factory processes that can run at arbitrary hours. This will allow energy bill savings of as much as 15%.

How Big Is the Smart Grid market? Utilities will need to add an aggregate of nearly 40 gigawatts of clean energy generation by 2030. To get all that power to customers, total investment of $2 trillion into transmission and distribution networks will be required. And that's just the additional clean power - there will be even more investment in the software, hardware, and wireless networks to enable the power grid to intelligently manage all the additional capacity.

Smart meters can cost anywhere from $100 to $300 per meter to install depending on the sophistication of the meter. So, say 40 million smart meters will be installed; that could costs $4 billion.

Historically the investment into smart grid technology has been minimal, but venture capitalists have recently started to pump money into the sector. Look for lots of startup companies and new growth.

US Dept. of Energy - The Smart Grid

Newsweek - Plugging Into the Future

Smart Grid Q&A With Industry Expert

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Howard Bloom's new book - Genius of the Beast

And now Howard Bloom has just published a new book, "The Genius of the Beast: A Radical Re-Vision of Capitalism". It's an iconoclastic, big-picture view of the transformation of mankind by its machinery.

I'm still reading this new book, but I've gotta tell you, it's changed my views on Capitalism. It shows how and why boom and bust are inevitable in the cycles of existence; why greed and compassion cannot be blamed - they are simply the expected cycles in the mechanisms of growth in human society.

"Genius of the Beast" rewrites the history of Capitalism. It describes the connecting science, technology, emotions, business and society, and proposes a next-generation of capitalism for western civilization - an evolutionary imperative that Howard Bloom suggests can lift us from economic crisis and dramatically upgrade our ability to empower our fellow human beings.

Says Howard Bloom, "What is the beast? It's Western Civilization. And the beast's metabolism is capitalism. Capitalism - a word that has become, to many, a curse. But beneath their surface, capitalism and the Western system hide astonishing abilities...."

Bloom seeks to reveal the deeper meaning beneath what we've thought of as crass materialism. He probes the mystery of how our obsessive making and exchanging of goods and services upgrades the nature of our species, endowing us with new powers.

Bloom's new book has given me a fresh new view of Capitalism as a self-organizing system that goes through boom and bust as part of the essential living "genetic" algorithm. Greed cannot be blamed, and the re-action towards populism and egalitarianism is inevitable. They're all just part of the re-positioning mechanism that optimizes progress.

Howard Bloom writes easily - it's like talking with him. Read his book!

Review and buy on Amazon.com - The Genius of the Beast

Howard Bloom - Global Brain: The Evolution of Mass Mind

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Jim Pinto Speaking engagements

What I enjoy most of all are my speaking engagements. What's nice about being a speaker is that I speak for an hour, and I'm done. All my knowledge, background, experience and insights are focused on delivering a valuable message to an audience that is tuned in to attention. It's stimulates the juices!

The more I'm paid, the more valuable it becomes, to my audience and to me. I've gotta tell you, some of my best thinking comes while I'm delivering a speech, and in the Q&A and inter-action that follows.

During past years, I have spoken at events all over the country and the world. In the past 12 months, I've visited Australia, England, France, South Africa, India and, of course, several major cities in the US and Canada. The more I travel and speak, the more insights it gives me into the wonderful variety of ideas and experiences that relate to the places I visit, the people I meet, and the variety of topics we discuss. It stimulates my eclecticism.

Because I'm typically engaged for the day, sometimes just an hour, I can speak my mind. I tell my audience exactly what I think, without fear or favor. I'm not just a consultant that tells the client what they wish to hear. I have no hidden agendas.

Just last week, I spoke in Houston, TX at a meeting of international capital analysts organized by JP Morgan-Chase. The subject was industrial automation, and all the majors were there to pitch: Rockwell, Invensys, Emerson, Siemens, ABB and the like.

I met the analysts separately to give them my own, direct opinion about automation industry prospects. After they had sat through endless hours of mind-numbing Powerpoint presentations, plans and projections from CEOs and marketing Veeps, they were anxious to hear my unvarnished views. Which I gave.

My JP Morgan host provided this feedback, "Jim, I really enjoyed your presentation and so did the clients I spoke to. They like that you have an opinion and clearly state what your views are, which is refreshing, particularly after a day of rather dry meetings."

Hey, if you're organizing a conference, sales meeting or industry gathering, I'd like to be considered as your keynote speaker. I'll help you pick a topic to suit your meeting theme. Here are the popular favorites:

• The global future of industrial automation
• Global manufacturing - Benefits and Problems of Offshoring
• Futures - new century predictions & prognostications

Jim Pinto - 1 minute sales pitch (video):

Pinto Topics, Testimonials and recent speaking events

Jim Pinto - speaking engagements (video):

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eFeedback

"Those who believe that government is the answer to our economic problems tend to apply the 'corruption' label to corporate lobbyists and their attempts to sway the government with campaign contributions. On the other hand, those who believe that free enterprise and personal liberty are the answer to our economic problems tend to apply the 'corruption' label to elected officials who ration access and votes to their largest campaign contributors.

"Let me suggest that the root of the problem is neither corporate nor government corruption. It's the result of the growth of government. As we have allowed the size and power of government to grow unchecked, we are 'shocked' to learn that corporations have hired lobbyists to prevent that power from damaging their economic interests. We are also shocked to observe that politicians see these lobbyists as a source of funding for their campaigns.

"If the American public wishes to have government solve all economic and social problems, then it must accept the corruption that accompanies the concentration of so much economic power in one institution. Less corruption is possible only if we restore the balance of power between government and private enterprise.

"Amendments to our Constitution must provide for: 1) Term limits for members of Congress; and 2) Prohibiting contributions to elected officials by any citizen. This would not be a cure-all, but it would indeed be a step in the right direction."

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Suzanne Lovell [suzanne.lovell@gmail.com] comments on Downsizing:

"Your piece on layoffs really resonated. I recently returned to work with the same company after a year off - a year which saw 3 rounds of layoffs, a reduction in working hours and an increase in responsibilities.

"I see around me constantly the emotional fallout when a company handles poorly the need to reduce the work force. My colleagues are highly educated, committed professionals, long used to giving extra to the clients they care for and, through them, the company.

"Now, however, there is an edginess to interactions with management and the rate of turnover is impacting the ability to fulfill the corporate mission. No amount of rah-rah messages from on high seem to make any difference."

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Bob Szoke [rwszoke@marathonoil.com] is currently NOT a member of ISA, after many years of membership:

"ISA is no different from most volunteer based organizations. Every election is for those who are willing to 'try' and do the job, with the best of intentions. Or it is a beauty contest, for ego gratification and a line on a resume.

"ISA has consistently had good people in management positions. But, as Glenn Harvey stated, there is no innovative thinking. Your other management article said, don't play for the future by using today as a starting point, because you are only extrapolating; determine what the future should look like, and find the best way to get there.

"Unfortunately, the ISA membership is probably the worst group to ask 'what is the ISA of the future?' because the bulk of those who are left are 'status quo' people. The innovative and progressive have left long ago to find more fitting forums where they can bounce around their ideas.

"The paradigm of learning, advertising, marketing has changed in the past 30 years. ISA has not. Why go to the ISA website to find something when a Google search is much quicker?

"When was the last time ISA was marketed to the managements of manufacturing or engineering companies? They all know UL, IEEE, AICHE, ASME; but when you mention ISA they get a blank look. This makes discussing S100, S84, and any other standards much more difficult; getting money to attend shows is impossible; training dollars, don't go there either.

"Great strides have been made in recognizing ISA as a standards-writing organization. Unfortunately, the political forces (marketing lobbyists) have cause substantial disruption of the processes. When standards are written by those who support their own interests, the process gets corrupted to the point of irrelevance."

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