JimPinto.com - Connections for Growth & Success
No. 116 : 8 April 2003
Keeping an eye on technology futures.
Business commentary - no hidden agendas.
New attitudes, no platitudes.
- Invensys heading for break-up
- Rockwell & Weidmüller alliance
- War technology insights
- Waging (and defending against) cyber-warfare
- Anti-Spam software
- Protest about the Iraqi war
- Protest about the war-protests
- An enthusiastic Segway user
OK, OK - this issue starts with 2 industrial automation news items.
I'm sorry that I cannot bring up more "good news" about automation
companies, simply because most of the news seems to be less than good.
My commentary on the war brought a lot of feedback, both positive and
negative. The "thought currents" generated were valuable for all
involved, and certainly for me; good discussions always broaden ones
perspectives. In eFeedback (below) I have included two powerful and
polarized viewpoints. You decide which one gets you in your gut.
Tom Friedman (NY Times columnist) has 6 tests to see whether we're
winning the Iraqi war. I've modified No. 3 and added No. 4:
Says Friedman: If we see these things happening, you'll know that
the political ends for which this war was launched are being achieved.
If we don't, we'll know we're lost in a sandstorm.
- Have we occupied Baghdad - without leveling the whole city?
- Have we killed, captured or expelled Saddam?
- Have we explained why we haven't been greeted with garlands?
- Have we found any weapons of mass destruction?
- Have we preserved the territorial integrity of Iraq?
- Has an authentic Iraqi liberal nationalist emerged to lead Iraq?
- Is the Iraqi state that emerges from this war accepted as legitimate by Iraq's Arab and Muslim neighbors?
Tom Friedman's scorecard
Invensys heading for break-up
Now listed in the ranks of "Britain's Most Unloved companies",
INVENSYS has the dubious honor of registering the biggest decline
in the first quarter of 2003 for any of the FTSE 300. The shares
closed this past week at 10.25p, some 80-90% lower than just a few
months ago. On Monday 7 April, the price shares jumped to 12.27,
after the announcement of a London Underground contract worth £850m.
Market-cap was some £400M, about half of the amount that the
infamous Allen Yurko paid for BAAN just a couple of years ago.
Now that investor confidence is lost, analysts predict that
Invensys cannot survive. End-user markets for Archestra and most
other products are weak, and the Iraqi war is affecting buying
decisions indefinitely. Operating margin objectives look too
optimistic and lots of charges need to be taken for restructuring
and the pension fund shortfall.
There are serious debt covenant issues. After being ahead of target
on disposals (the only thing that Rick Haythornthwaite seems to have
been good at) the £1.5 billion debt still needs to be renegotiated;
tougher terms are likely. While three of its banks seem ready to push
for disposal, Invensys is reviewing all three of its main divisions
for disposal. But that is a losing catch-22 battle: only the
profitable companies can be sold, leaving the losers in the "core".
So, the critical bank covenant (earnings to be more than 3.5 times
interest) will likely fail.
Many analysts believe that the break-up value of Invensys is much
higher than the current market-cap reflects. And in the current
economic environment, a dramatic recovery seems unlikely. Update
on results for the past year are due on Tuesday April 15. Rick
Haythornthwaite will have little choice but to admit that Invensys
shares are only worth holding for a break-up. But, perhaps he can
save the day by bringing news of a juicy (juicy?) buyout offer
from Siemens, GE or Schneider.
Hoovers (6 Apr. 03) - Invensys takes drastic step towards break-up
UK Times (7 Apr. 03) Invensys denies sell-off will lead to break-up
Check the news, include your views - Invensys weblog
Rockwell & Weidmuller alliance
After forecasting second-quarter earnings between 22 to 26 cents
per share, Rockwell now expects a ho-hum 24-25 cents. The stock
still fiddles around at about $21, far short of Don Davis' dream
to sell the company for "a number in the thirties".
In the meantime, rumors persist that buyout discussions between
Eaton and Rockwell are continuing. In my opinion, acquisition of
Rockwell is simply a matter of time and price; Eaton is still the
most likely acquirer. Stay tuned.
This past week, Rockwell announced that it would acquire the
N. American assets of Weidmüller Holdings - which includes about
175 employees, with US HQ in Richmond VA, and Toronto, Canada, and
estimated total revenues of about $40m. The alliance also included
a brand label agreement, a technology/design exchange and joint
Weidmüller, based in Detmold, Northern Germany, is the largest
manufacturer of IEC terminal blocks in the world. Annual revenues
are more than $ 0.6B, ahead of Phoenix Contact, located just a few
kilometers away in Blomberg, Germany. Rockwell uses a lot of
European-style connectors in its PLC and I/O products. The Weidmüller
alliance with Rockwell will squeeze Phoenix out of one of its largest
A decade ago, Weidmüller partnered with Action Instruments (my
previous affiliation) for European marketing of UltraSlimpak, the
hot signal-conditioner series that was designed and manufactured
by Action, using a Weidmüller package. I have visited Weidmüller
in Detmold many, many times in the past several years and know
them well. The company invested significantly to gain a foothold
in N. America, especially through electronics and industrial
networks. Phoenix Contact also has a similar strategy. Somehow,
Weidmuller never quite succeeded, and Phoenix has a significantly
larger presence in US markets.
In Europe, Weidmüller has the leading market-share, with world-class
production based primarily in Detmold. A large production base in
the UK - located in the Isle of Sheppey, at the mouth of the Thames
- has just been sold to local employees, leaving the Weidmüller sales
company as the only direct presence there. A small special-electronics
UK group never quite got beyond a few million in sales, and this too
has been spun off to local employees, a good move.
Weidmüller is a classic example of the German "mittelstand" - large
privately held companies. The company is still owned almost totally
by Peter Glasel, whose father founded the company over half a century
ago. Glasel, now in his late-sixties, has been hoping to expand
Weidmüller through a public stock offering. But, taking a company
public demands strong growth, which has proved elusive for Weidmüller.
With the sale of Weidmüller's N. American assets to Rockwell, it
appears that Weidmüller has given up on a direct US presence. And
Peter Glasel's plans to go public are also likely on hold.
Rockwell Announces Strategic Alliance with Weidmüller Holding
Rockwell Automation Updates 2Q Earnings Outlook
JimPinto.com Rockwell weblog
War technology insights
MIT Tech Review's Richard Muller shares 6 observations about the war
in Iraq, mostly overlooked in the TV coverage and newspapers.
MIT Tech Review - six observations on Gulf War II
The First GPS War: In the Gulf War a decade ago, Global Positioning
System receivers were too expensive. But GPS was so valuable, that
some soldiers used cheap commercial versions. In the Iraqi war, GPS
has become a key technology. US soldiers are GPS-equipped, and so are
the bombs. Because of precision targeting, civilian casualties are far
fewer than could be expected from the thousands of bombs and cruise
missiles. The difference is GPS.
Facial recognition: Saddam has appeared on Iraqi TV several times.
Was it really Saddam? The world waited while facial recognition
programs analyzed the images. This is a waste of time, given the
limitations of computers. With available technology today, no computer
can match human ability to recognize faces.
- Oil well fires: At the end of the Kuwait war, Saddam malevolently
blew up oil wells and set gushing oil on fire. It was thought that
it would take a decade to extinguish the blazes and the clean up the
pollution. This brought a surge of technological innovation, and the
last of the 732 wells was extinguished and capped by Nov. 1991.
It was thought that this time, the Iraqis had also learned, and would
perhaps blow the wells below the ground, making them more difficult
to cap. But that didn't happen. Only 9 wells were set on fire in the
south, and 7 of those were extinguished quickly. Many were found with
explosives attached but not fired. Why so few? 1/ Speed - getting to
wells before the Iraqis knew what was happening, before they could
act. 2/ Effective building of trust - leaflets distributed, asking
the Iraqis not to destroy their own wealth.
- The Sand Blizzard: After the great Iraq sandstorm, the helicopters
could still fly and equipment still functioned. The US had prepared
for sandstorms, but no one could be certain the gaskets and bearing
seals would do the job. That they endured one of the greatest
sandstorms in years is a truly remarkable technical achievement.
- No Chemical Warfare: Most people seem to believe that the Iraqis
really do have chemical weapons. If they do, why haven't they used
them (yet)? Chemical weapons are tricky and unreliable. They work
best against a concentration of unprotected people, as in the Kurdish
villages devastated by chemical attack in 1988. During a ground war,
chemical suits hamper movements; so they are not used unless a
chemical attack is believed imminent. In close-in combat, both sides
must suit up, and with more training the US has a clear advantage.
Saddam reportedly believes that it was fear of chemicals that kept
the US out of Baghdad in 1991. The Iraqi military may have similar
hopes now. The United States has (as of today) held back from the
perimeter, wary of launching an attack that could trigger chemical
use and harm both soldiers and nearby civilians. For this reason,
the US military will be cautious about entering Baghdad before
- North Korea: Kim Jong Il is watching closely, thinking hard
about the depth of his tunnels, his personal safety, and the
vulnerability of his command, control, and communications networks.
What probably frightens him more than the technology is the
demonstrated willingness of the US to attack, even with UN
opposition. The North Korean dictator will tone down his
belligerence, and hopefully will back down.
Technology providing war insights
Waging (and defending against) cyber-warfare
Instead of fighting Iraqi sandstorms, battling troops and worrying
about biological and chemical attacks, some people suggest that
computer viruses, worms, and electronic pulses could do more damage.
Cyber warriors may already be invading Iraqi computer networks,
shutting down utility grids, stopping or intercepting communications,
and jamming radar. Other weapons, including e-pulse bombs and
microwave lasers, may be silently and bloodlessly knocking out
computers all over the war zone. Security experts are speculating
that this is ongoing, but nobody confirms that such a virtual war
is actually under way. US capabilities and tactics surrounding cyber
warfare are top secret. Administration guidelines on when and how
the US would engage in cyber attacks are still being developed.
Cleary cyber-attacks can come from both sides. The US stands to lose
more than other nations by legitimizing cyber attacks, even during
wartime. The country would be severely damaged if communications,
power grids, 911 emergency systems, and air traffic control systems
are down, even for a short time. Information attacks could be more
crippling than any physical invasion. This continues to be a key
concern and focus for Homeland Security efforts.
Is the U.S. Waging a Virtual War?
Cyber-Attacks by Al Qaeda Feared
Bush orders guidelines for cyber-warfare
The two serious problems with email are virus infections and spam.
Most computers now have anti-virus software (Norton or McAfee)
installed that minimizes virus problems, though it does not
What to do about spam? Junk mail arrives regularly, incessantly,
inexorably, flooding everyone’s Inbox. Most service providers offer
some type of Spam-elimination. Indeed, this has become the focus of
major TV advertising campaigns by AOL and MSN recently - the MSN
butterfly mercilessly ejects a long line of spam vendors.
Indeed, increasing numbers of JimPinto.com eNews emails are being
rejected by company mail servers, with a return message that some
specific word is "objectionable". I send a separate email to the
intended recipient, being careful not to use suspected words. The
usual response is that it is difficult to talk corporate systems
people out of filtering. So some change to a private email address.
Until recently, there didn't seem to be a foolproof way to eliminate
unwanted e-mail. As quickly as systems managers added filters
(catching specific words), spammers come up with new ways to spell
v!agra, $ex, and f*ck. But smarter filtering techniques - from
rules-based analysis to artificial intelligence - are yielding good
results. Wired magazine published a list of the most effectives ways
to eliminate spam. Here's a summary.
Security firm CipherTrust combed through more than 250,000 junk emails
for Wired and identified the top 25 subject-line words and symbols:
- Blacklist: A real-time blacklist identifies the IP address of the
spam sender's computer, then advises its subscribers' ISPs to block
mail from that address. This method is effective, but it inevitably
leads to a cat-and-mouse game between spammers and blockers. The
spammer simply changes to another client or server.
- Distributed identification: A community of users flag spam for one
another. When enough recipients object to a particular message, it's
automatically transferred to everyone else's spam folders.
- Profiles: Heuristic analysis software looks for invalid message
IDs, bugs, and other telltale spam traits - as defined by an evolving
set of rules - and develops a numerical score for each incoming email.
If the score hits a designated limit, the email is blocked. Of course,
some good messages get flagged too.
- Filtering: Bayesian filtering, the most promising new technique,
doesn't adhere to any particular set of rules - it learns and
re-learns how to spot spam by scanning the mail you've read and the
mail you've rejected. The filter calculates probabilities based on
each e-mail’s most unusual characteristics. Before long, it 'knows'
what kind of email to deliver, and what to toss. This 'artificial
intelligence' filtering eliminates more than 99 percent of unwanted
messages. It is already popular in the open source community and will
soon be adopted commercially.
- Labels: More than 25 states already require senders to label spam
as spam, and legislation is being proposed to fine spammers. This is
similar to proposed stiff penalties for telemarketing calls to numbers
on a prohibited list.
Fwd, Free, Get, FREE, $, !, SPAM, You, Your, Norton, Credit, Save,
000, Now, Check, Year, Make, Sale, Money, DVD, just, now, Lose,
The top 25 phrases in body text:
opt-in, now!, offers, most, partners,
999, fulfillment, yamato, naviant, partner, removal, recurring,
mailings, free!, assistant, enjoy, grocers, mailing, subscriber, cash,
sun, rewarding, buy, today!, marketing
Wired: How anti-spam software works
SpamCop claims to catch 80-90% of unwanted mail
SpamNet, an Outlook add-on claims 90% effectiveness
SpamAssassin - rule-based spam-filter
Merle Borg [firstname.lastname@example.org] wrote about the war in Iraq:
"Combating terrorism with bombs demonstrates the ultimate arrogance
and the ultimate ignorance of power.
After an insightful and valued email exchange, I promised John Wilson
[email@example.com] that I would publish his passionate protest
against what he considered was my 'anti-war propaganda':
"I was too young to be held responsible for our blunder into Vietnam,
but I was in favor of kicking Iraq out of Kuwait and for going after
Osama Bin Laden. In the past week however, I have ended a forty year
membership in the Republican Party, I have taken part in my first
anti-war rally, and for the first time this gray haired, patriotic
American finds himself filled with dull anger, shame, and
disillusionment. This one happened on my watch. This is my country,
my party, my generation. I don't know if I'm angrier with them or
with myself for letting it happen in silence. I am ashamed of us all!
"Your term 'techno-human' illustrates the external power of technology
in war. Ever since stone and wood were fashioned into spears, superior
technology has translated into superior military might. Boundaries
change. Nations rise and fall. But the real changes happen inside.
Technical superiority somehow translates into moral and intellectual
superiority, and justifies the use of that power for any end. 'Shock
and Awe' is the result. In Joseph Conrad's 'Heart of Darkness', Kurtz
went to Africa carrying the torch of civilization and ended up
uttering his famous postscript, 'Exterminate all the brutes.'
"Morality aside, the modern world can no longer afford this kind of
thinking. Any country or group of dissidents today can create weapons
of mass destruction. The technology and the information are there,
and cannot be put back in the bottle. Any attempt to squash terrorism
with bombs, instead of dealing with the underlying reasons for hatred,
effectively multiplies and spreads the terrorism. For every person
killed, two more terrorists are created. To do this without U.N.
support weakens and possibly destroys the last, best chance of dealing
with terrorism. I fear for us all.
"The world breathed a sigh of relief when communism fell, and another
when common markets and free trade agreements were hammered out. But
after this war, the world will be left a meaner and more dangerous
place. The proud Muslim and Arab peoples now will have split-screen
scenes pumped at them every evening: Israeli tanks in Palestine and
US tanks in Iraq.
"Bush has his war. I have my regrets. The soldiers of this world have
my condolences, and the children of this world have my heartfelt
"Let us be of one accord, let us stand proud, and let us be the human
shields of prayer, encouragement and support for the President, our
troops and their families and our country, as well as belief in the
freedoms we uphold as righteous.
Over the past two years, eNews has often featured 'Segway', Dean
Kamen's 2-wheeled Human Transporter. Now I'm jealous! My old friend,
Don Ross [firstname.lastname@example.org] from Portland, Oregon, just bought
a Segway. Here is his initial report:
"I feel this war is completely justified. How many scuds need to land
on YOU before you realize that Saddam Hussein is also a terrorist?
He is in complete violation of many UN resolutions. The peaceniks
should 'put a cork in it' until the story is played out. If you can't
wholeheartedly support the President and our troops, at least keep
your mouth shut for the time being.
"Certainly people have the right to protest and rally for or against
a cause, but in this case are they justified? Should the media even
cover the protests? If the reasons we're over there are proved wrong,
the liberal media will have plenty of opportunity to criticize. Will
all the pundits be quick to print retractions for all of the discord,
once chemical weapons are found?
"The premise that war under any circumstances is wrong is pure folly.
The sad part is that, once again, the USA is forced into a position
of being the global police force. The impotency of the UN was finally
seen for all its shame. After years of making resolution after
resolution calling for disarmament and disclosure by the Iraqi
leadership, the USA stepped in to enforce the resolutions. Only after
Saddam is brought down will there be any hope for the Iraqi people.
"Evil is evil, and anyone that feels Saddam's regime has any benefit
for the Iraqi people is ignorant. Ignorant of his terror, murder, hate
for America, and the theft of the country’s untold billions of dollars
in oil revenue that has been squandered or put towards his own
"Please realize that the reasonable and normal Iraqi people will
benefit greatly once a new and reasonable government is established.
Only then will Iraq be able to flourish with free prosperity for all
"I have been following the news on 'It' since the beginning and have
be fascinated by it. I have only had use of my Segway for 2 days and
the weather has been quite rainy, not a surprise in Portland. I am
still in learning mode, so have not used the key which allows maximum
speed. It is quite intuitive, but I still feel I want to get very
familiar before I max out.
"As an example of uses, I have delivered a book to the library
(1 mile), visited the post office (1.3 miles) and gone to Safeway
shopping (.7 mile). If the weather is decent I soon expect to use
it to reach light rail (2.6 miles) and proceed downtown, where I
will use it to meet my son for lunch (.8 mile).
"I did use it yesterday to go to Home Depot, about 1.2 miles. The
weather was cool and a little wet but it was still useful and
enjoyable. I'm about to leave for the post office again now. I am
still using the 'Sidewalk' key, which limits my speed to 8 miles per
hour. It is intended for more congested areas, but I'm using it until
I feel more natural in my operation. The learning key limited speed
to 6 mph. The final key, which I will move up to, is 12 mph.
"It is very fun to use and attracts a lot of attention. People
are truly fascinated. I get horn honks, thumbs up and many 'Wow!'
expressions. Most people are aware of it from television but have
never seen on in person.
"As far as practicality, I think it has a fairly large footprint
that would make it difficult in downtown Portland with very narrow
sidewalks. Right now it attracts attention so people move out of the
way, but with many in use it could be a problem. The one I have is the
first model, designed more for commercial use. There will shortly be
a new model that is smaller, lighter and cheaper designed for public
use. That may be more practical for general sidewalk use.
"I think the Segway falls in between the hype and the skepticism.
It is great fun and useful, but does have limitations. It can be
dangerous if used improperly. Anyway, these are my thoughts after
2 days of use."
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