JimPinto.com - Connections for Growth & Success™
No. 291 : 25 February 2011


Keeping an eye on technology futures.
Business commentary - no hidden agendas.
New attitudes, no platitudes.

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Siemens is on the Prowl for Acquisitions

Siemens, the largest Automation company, is no doubt watching its competitors ABB and GE, which both have made recent acquisitions. The "big gorilla" is signaling that it is armed with a huge war chest and is looking to acquire.

After cleaning up and putting Siemens back on a credible growth path, top management says that the company has reached a level of "management maturity" (meaning that it has surplus funds) and can now pursue major takeovers. The company now has an acquisition "war chest" of Ä15.6B (about $21.5B).

Who's on the Menu to be bought for billions? In automation and power markets, there are only a few possibilities.

ABB, GE, or Schneider would strain the budget and stir antitrust problems. Perhaps Honeywell's Process Systems group, which Siemens was toying with when GE became interested a decade ago, and Allied Signal finally ended up with. Emerson's $46B market cap (without any takeover premium) is more than Siemens can swallow.

This leaves Europeans like Alstom and Legrand. And, of course, my own long-forecasted takeover contenders: Rockwell (stuck with no-growth) and Invensys (flailing at a dead-end). And maybe Eaton.

Mind you, buying "deals" is a risky strategy. But then, where can you spend $20-30B in automation and power markets?

Click Siemens Shopping List

Click Invensys stalked by engineering rivals

Click AW, Gary Mintchell - Acquisition Activity Heats Up

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Keeping Motivation Up in a Down Economy

Recessions challenge leadership skills. Some managers simply downsize to meet budgets and outsource to reduce costs, without recognizing the long-term disadvantages and inefficiencies involved.

When cutbacks start, good people quickly leave, reducing motivation and increasing the frustration of remaining employees who are further burdened by trying to take on additional workloads. Managers quickly become isolated and embattled, leaving workers trying to guess what may be happening and who will be next. The frustration quickly becomes unmanageable.

Many surveys have shown that most negative impact on employee morale is caused by lack of honest communications. This is followed closely by failure to recognize achievements and excessive workloads for extended periods. Similar surveys show that the best remedies for low morale during tough times are open communications, personal recognition, rewards for exceptional performance and teambuilding events or meetings.

During lean times, many employees consider themselves actively disengaged - they blame management, consider themselves not involved, don't see a promising future and don't take pride in company achievements. They don't intend to stay and simply drag others down.

Strong management motivates good people to do what it takes to win during hard times. They create mechanisms for the workforce to share their feelings, and provide outlets to release pent-up emotions.

The automation-company Weblogs on the JimPinto.com Web site attract thousands of responses specifically because they are anonymous. Anonymity seems necessary because people believe that they will be penalized by the managers they criticize. Many frustrated employees feel that they have no other way to vent their frustrations and hope that perhaps higher management will heed their criticisms.

The problem is that anonymity generates some bogus complaints, by disgruntled employees and by outsiders simply wanting to cause trouble. I moderate the blogs, eliminating offensive comments and personal attacks. But, itís becoming burdensome for me, and I wish I didn't have to do it.

I encourage the automation majors to do more themselves to utilize the benefits of this type of employee feedback. If your company is the subject of one of these blogs, get in touch. I'll help.

Periods of recession act as litmus tests for management of an organization. The inefficient often succumb. But good companies learn that it's the bad times that make them so much better during the good times.

Click AW Feb. 2011 - Keep Motivation Up in a Down Economy

Click Book - What the Best Companies do to Get Results in Tough Times

Click Employee Motivation Myths Debunked

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Re-emergence of Nuclear Energy

Nuclear plants are the ONLY net-energy-positive way to produce electricity. The waste/pollution problem is trivial when compared to fossil-fuels. Under pressure to reduce the production of climate-warming gases, more and more countries around the world are moving to low-emission nuclear energy as a primary solution. Today, even some "green" environmentalists are embracing it.

After the partial meltdown of the Three Mile Island plant in Pennsylvania in 1979, and the 1986 Chernobyl disaster, the construction of nuclear plants slowed significantly. It's been well over a decade since the last nuclear power plant opened in the US. But now many environmentalists are backing nuclear energy and 53 plants are under construction worldwide, double the total of just five years ago.

Experts point to many improvements in nuclear technology over the past decades, with an 80% drop in industrial accidents at the world's 436 nuclear plants since the late 1980s. The current administration is eyeing federal tax incentives and loan guarantees to fund new nuclear power plants across the US, which could eventually drive down carbon emissions.

In the early 1950s, the dawn of the civilian nuclear power age, nuclear optimists imagined a world powered by tiny nuclear reactors for nuclear-powered cars, airplanes, refrigerators and home heating. Today, in an era of climate change and energy insecurity, the nuclear industry is re-evaluating some of those old dreams. This includes the nuclear battery.

Designed by Hyperion Power Generation, a Los Alamos Labs spin-off, the cheap, small and easily transportable nuclear battery is about the size of a refrigerator, compared with a 50-feet-tall traditional reactor. It produces 25 megawatts of electricity, about 2.5% the output of a large atomic power-plant reactor. This is not quite compact enough for cars, but is being designed to power small towns with fewer than 20,000 homes, as well as military bases, mining operations, desalination plants and even commercial ships and cruise liners.

Click Nuclear power regains support

Click US Nuclear Energy Foundation

Click Time - Nuclear Batteries

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Ray Kurzweil - The Singularity is Near

I've been writing about Ray Kurzweil ever since I read his book, "The age of Spiritual Machines" which predicted that Machines would exceed human capabilities.

In 2005 Kurzweil published his 670-page tome, "The Singularity Is Near: When Humans Transcend Biology" and became the leading futurist to predict the occurrence of a significant evolutionary change. His movies, "Singularity" and "Transcendent Man" are different versions of the same idea. Ray discusses a hypothetical future paradise in which humans will become "more creative and more loving" by adding artificial intelligence to their brains.

This month (Feb 2011) the cover of TIME magazine (21 Feb 2011) featured the headline: "2045 - The Year Man Becomes Immortal". The cover-story shows Ray Kurzweil in front of a theater showing his movie, and the article headlines the definition of Singularity: "The moment when technological change becomes so rapid and profound, it represents a rupture in the fabric of human history".

TIME's coverage of Ray Kurzweil came just a few days after USA Today interviewed him about the Jeopardy match between IBM's supercomputer Watson, which won against two of the game's human champions. The match was reminiscent of the historic chess win by IBM's Deep Blue against world chess-champion Garry Kasporov in 1997. Kurzweil was one of those who foretold computers defeating humans in chess years before it happened.

Ray Kurzweil turned 63 this month (Feb. 2011) and expects to live "forever", his intelligence downloaded to a machine. In the meantime, he is reprogramming his metabolism for extreme longevity by taking about 200 pills a day. He says, "I think I'll make it through to where I could at least back myself up."

I've met Ray Kurzweil a couple of times at Futurist events. I asked him how the tacos we were eating for lunch affected the daily 200 pills; he shrugged.

The problem with Ray Kurzweil's campaign, which critics deride as just self-aggrandizement, is that it diminishes his many significant accomplishments. He's a distinguished MIT graduate, a prizewinning author and scientist who received the National Medal of Technology and has been inducted into the Inventors Hall of Fame. He helped invent the flatbed scanner, developed a reading machine for the blind (now the size of a cellphone) invented and commercialized keyboard synthesizers. About 20 years ago, he changed his job description to "societal visionary".

Ray Kurzweil will either fizzle out (perhaps before 2045) or he will achieve his dream of immortality. What's your bet?

Click Time - 2045: The Year Man Becomes Immortal

Click Kurzweil Book: The Singularity is Near

Click The cult of Kurzweil

Click Will Death Become Obsolete?

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iPad is a new Media Ecosystem

Apple's iPad is not just another computer but a whole new paradigm, a complete media ecosystem.

My own media habits are changing steadily. I find myself using my iPad several hours a day. Instead of watching TV passively, bombarded with frequent, annoying advertisements, I scan the news on my iPad, selecting what I want to read, viewing what I want.

I read articles from the NY Times, the Economist, Fortune, Wired magazine and many others that simply await a finger-touch. I read Kindle books on my iPad too; a bit heavier than my old Kindle, but I prefer the brighter black-and-white text and color interface. I Google search, simply saying (audio) what I'm looking for and browse the web. And, of course, I read and send emails on my iPad - just about as easily as on my desktop. My smaller iPhone is my backup because it's always in my pocket.

The iPad virtual keyboard is good for some typing, but not for composing long emails and documents. But hey, I just bought a new Zagg keyboard which doubles as an iPad cover, with matching metal finish on the outside. Simply take it off and type (Bluetooth link). You can lean the iPad in a slot which gives it the look and feel of a laptop. Hey, I almost bought the Macbook Air...

Of course, the best function of iPad is showing photo albums, moving each picture with a finger-flick and expanding views with 2 fingers. What better way to share photos from my bucket-list trips? Someone said that the hardware disappears, leaving just easy access to the media.

With iPad opening up this new category, everyone is announcing their new tablets, slates and pads - Dell's Streak and Motorola's Xoom, with Microsoft, Amazon and Google also cooking up competition.

But, it's probably too late - Apple's new iPad is already in production and will launch next week - March 2, 2011. It is thinner and lighter, with more memory and a more powerful graphics processor, though the display resolution will be the same. And it will have at least one camera on the front for features like video-conferencing and Face-Time calling.

In the first quarter of 2011, Apple's sales jumped to almost $27B, with record earnings. They sold 7.33 million iPads during the quarter, almost as many as the 2 previous quarters combined. Total iPad sales to date are about 15 million units. Long term estimate are 33.7 million iPad units for 2011 and 40 million for 2012. For Apple, the IPad business has become almost the same size as the Mac.

Questions: My old PC desktop and laptop are still functional, and I have all my "stuff" on Outlook gigabytes, plus who-knows-how-many gigabytes worth of archives. Shall I go through the arduous process of transferring all that to an iMac desktop? And dump my laptop for a Macbook Pro? I'll have to spend the next weeks (months) learning the slick Mac interface, transferring all my stuff, and fiddling with files and programs that don't transfer.

And then, what will I do with my functioning-well desktop and laptop? Should I buy something I don't really need? Hey, what's Apple doing to me?

Click Apple Sells Almost 15 Million iPads to Date

Click Apple's New iPad in Production

Click Apple's iPad 2: The waiting game ahead of a potential sales boom

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eFeedback

Wing Eng [engw@shaw.ca] originally from Hong Kong, now living in Canada, provides further reviews of China's growth:
    "I have a more cynical theory relating to how China operates. To avoid the path of 'degeneration', the Chinese government has engineered a master-plan, not obvious to the outside world, since media access is largely restricted to the prosperous new growth regions.

    "Chinese rural communities are still very much subsisting at the 3rd world level. Rural citizens are mostly farmers, with little hope to move upwards economically.

    "Infrastructure, including education, is lacking for these areas, so younger people cannot find better jobs unless they go the new economic growth zones (mostly along the coast). When they do so, they are precluded from bringing children, since children are not given education & medical access in large cities. Thus children are left back in the rural areas in the care of elderly family members. These rural migrant workers also have restricted hopes of growth because they end up living in employer-owned housing, and they work the low end-manufacturing jobs which are dead-ended affairs with no chance to accumulate wealth. Much of their wages must be sent back to their villages to support other family members. When they finally become older, or sick, or maimed, they have no recourse but to return to the village, no richer than when they started years ago. Their children will grow up to face the same vicious cycle. Thus a continuing supply of cheap labor is achieved.

    "I do realize that there is some unrest in the migrant worker ranks now, as witnessed in the suicides in the Apple iPod factory, and the walk-out in the Honda plant. However, I wonder if any critical mass can ever be achieved to break this cycle. Historically, the communist government would tolerate a certain level of 'noise', but when it gets beyond an unwritten threshold, they can quench it with brutal and massive force.

    "Competitiveness aside, how long can the co-dependency between US & China continue? The insatiable consumption of Chinese goods by the US creates massive $ cash reserves in the hands of the Chinese. They, in turn, cannot afford to allow the US to fail, or else their largest market will collapse. They hold huge stakes in US Treasury Bonds and are buying up unprecedented numbers of Western businesses & natural resources. The Chinese Communist government has never demonstrated any real humanity when dealing with serious issues."

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Bob James [bobarc6364@sbcglobal.net] on the subject of engineers re-engineering themselves:

    "Engineers and scientists have convinced themselves that they must read material very slowly and precisely, essentially reading every word by agonizing word. This basically prevents many of them from reading material outside their own narrow field.

    "Because they have been trained to be very careful in their reading and not miss anything, they have in many cases developed reading habits that are not conducive to re-engineering themselves

    "Here are some statistics from classes that Advanced Reading Concepts conducted recently for engineers and scientists: The average beginning reading speed for 173 participants was 240 words per minute and 77% correct answers. At the conclusion of the 12-hour class, they averaged 1,528 words per minute and scored 86% comprehension.

    "Most indicated that with their new skills they could now consider actually reading material that had previously gone unread because of time constraints, mind wandering, or lack of concentration resulting in low comprehension or recall.

    "My suggestion for some of your eNews readers is that the key to re-engineering themselves is by taking a speed-reading class!"

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My positive comment about GE's Jeffrey Immelt being appointed to the President's Employment Advisory board brought a storm of protest. Fred Mudge [allswellx@aol.com] complained:

    "I've read your eNews for a long time and usually thought that you were right on with your judgment and opinions.

    "But when you said that Immelt was a great pick, wow! Immelt and GE have off-shored many jobs and shuttered many American factories. Why couldn't Obama find a great American leader that has stuck to their convictions and held a strong US base? Immelt and GE that have left the US every chance that they get?

    "I had to let you know that I think that you missed one here. But one miss in many years isn't all that bad; keep up the good work."

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