JimPinto.com - Connections for Growth & Success™
No. 128 : 12 August 2003

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

Click on any item to jump directly to that item

More on globalization - and the corruption of capitalism

After my last editorial on globalization (eNews 30 July 2003) I received a lot of supportive comments, but some protests.

Some felt that I was being too critical of a system that "is continuing, bringing more people to a higher standard of living". Actually, that view is an old myth and more than a decade out of date. In the US, the income of the mid-section of the wage earning population is declining very seriously, while the income of the top 5% is still skyrocketing. More than half of American households are deep in debt, insecure about their jobs or downsized into the temporary workforce, and extending their retirement because their pensions and savings have evaporated.

There was another protest: I was "offering no alternatives". Actually, I am. I'm suggesting that we should correct capitalistic excesses through discussion and understanding at all levels. Let's practice "enlightened self-interest" at the top levels, with a change in the ways executive compensation is established, especially during periods of decline.

The pendulums have already swung way out of whack! Conventional capitalism runs out of steam during a broad decline. Compensation algorithms for top people allow for results to be achieved by ANY means - including short-sighted profit improvements through ruthless cost-cutting and expense manipulation. This is the symptom of a deep-seated disease.

Jack Welch was glorified for transforming GE into a money-making machine, and rewarded with unimaginable millions. Kozlowski of Tyco, and countless others, considers themselves equals, abusing the system with unconscionable greed. In the past, these leaders of our lopsided system were considered heroes. Today, some of them are paraded with perp-walks, but only very few. Enronitis is NOT limited to the high-profile failures. It is quite common for high-level executives to receive significant bonuses and awards while they cut thousands of employees. Read the Montana Power story (weblink below) recently reported on CBS 60 Minutes. American Airlines top-brass during the recent strike. How many examples must I cite?

Even in the staid and conservative automation business, some CEOs and their top level executives continue to rake off high salaries, bonuses and perks, while their businesses shrink. In a future issue of eNews, I shall list the total compensation of some of the CEOs of Automation companies which have declining revenues and profits, but are kept afloat through short-sighted cost-cutting, employee layoffs and job transfers offshore under the guise of globalization. I'll name names.

There is another key point I am developing with these "thought currents": Religion (significantly western Christianity) is ignoring these problems, or at least seems powerless to address them. How many CEOs are lauded by the church for their generous donations? The lavish lifestyles are envied and admired. And it would be unthinkable to censure business decisions that cause hardship to others. Selfish business decisions are never admonished. "Business is business" is an accepted excuse.

These ideas are unpopular and difficult to express. As much as I try, there are those who pick on key words or phrases to misunderstand. Please don't nitpick - share your ideas. My eNews brings a lottt of feedback, which is helping me to work through these ideas to a level that I hope is helpful to some.

Rich Merritt, Senior Technical Editor of CONTROL magazine, wrote this little ditty:

    I want to be a director
    With a great big boardroom seat.
    I want to be a director
    'Cuz six figures are so sweet!
    I want to be a director
    Seize opportunities when they knock.
    I want to be a director
    With a million shares of stock!

Click Facing America's Vast Income Gap

Click The Growing Income Inequality Problem

Click CBS News - Who killed Montana Power?

Click Forbes: Blue-Chip Companies Send More Jobs to India

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Honeywell Industry Solutions - hot or not?

In a recent issue of eNews (24 July 03) we mentioned that Industry Solutions (IS) was one of only a couple of Honeywell businesses that own any bragging rights for increased performance this year.

On that subject, Andrew Bond's "Industrial Automation Insider" (Aug. 2003) had these interesting insights (summarized here):

Honeywell IS was recently named as one of START magazine's "Hottest Companies of the Year". Three months ago Frost & Sullivan named it "Industrial Controls Growth Company of the Year". In both cases it was Experion PKS that was cited as the main reason for the award.

Automation and Control Solutions, of which IS is a part, was one of only two Honeywell divisions to report increased Q2 revenues. ACS revenues were up 4%, but margins were down from 12.5% to 9.6%. The group as a whole raised Q2 revenues by 2% to $5.7B.

CEO Dave Cote claimed that during the quarter, cumulative orders for Experion PKS climbed above $240M. But Honeywell claimed $200M worth of orders for Experion PKS in Dec. 2002. This raised widespread skepticism in the industry about the claimed order rate.

Honeywell showed Andrew Bond a breakdown of what made up the 200M, albeit some four months after the original claim. So if Cote is now claiming $240M Experion PKS orders for in July 2003, and $200M was previously claimed in Nov. 2002, Andrew Bond asked: Was only $40M booked in the 8 months from Dec. to July, an annual rate of $60M?

Honeywell's response: $40M worth of Experion PKS orders were booked since Nov. 2002. Receiving orders is not a linear process, varying month to month. 158 Experion R100 systems were shipped since release in Jan. 2003, some of which are upgrades from existing PlantScape.

Andrew Bond then asked what others had been suggesting: that the current figures have only been achieved by slapping an Experion PKS label on anything and everything. Does the $240M include orders for other things, or are these accounted for separately?

Honeywell's response: PlantScape, TPS and TotalPlant Alcont orders are counted separately, not included in these figures. This $240M reflects projects based on Experion PKS only. It truly reflects growth and acceptance of the new platform for new business, and not follow-on business, which is a much larger number. There is rapid acceptance of the new platform for new projects and major expansions.

Andrew Bond completed his commentary with the observation that the real crunch will come in Nov. 03, when Honeywell will report what the total Experion PKS orders have been over a full 12 month cycle.

After reading this Automation Insider report, an industry analyst (too close to be named) responded:

If $40M & $240M referenced were for US orders only, not worldwide, then CEO Cote missed a great opportunity to promote the success of Experion. Assuming the rest-of-world orders equals the US number (very conservative, since most suppliers acknowledge that the US is the weakest market), Cote could have quoted a much more impressive number. Why didn't he?

Someone from Honeywell could easily clear up the question by announcing worldwide Experion orders. They have not been shy about releasing these numbers in past press conferences and webcasts. One would think they would jump at this chance to strike fear into the hearts of competitors by announcing numbers around $0.5B.

Does anybody know the real story?

Click More detailed account on the Honeywell weblog

Click Read Andrew Bond's Industrial Automation Insider

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More on wireless sensor networks

I continue to be excited about the growth potential of sensor networks. Read this new (July/August 2003) MIT Tech Review article. It provides a good description of several sensor-net applications.

The ultimate vision for sensor nets is to make them smart, autonomous, and self-aware. With the vast amount of data that can be collected, there is a danger of being inundated with too much. The solution for sensor networks may be a new breed of search engine that is like a Google for the physical world.

Imagine logging onto the network and typing in, "Does my lawn need more water?" The sensor network would examine figures from moisture sensors around your home, and send back a prompt reply. At warehouses, managers could quiz shelf-mounted sensors about inventory trends, while guards in secure facilities could program smart networks of motion sensors to sound alarms when they notice suspicious patterns of movement.

Click MIT Tech Review: Casting the Wireless Sensor Net

Click Pervasive Wireless sensor networks

Click Ember's wireless sensor networks

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Robotic futures

Microsoft might be on the verge of its best office invention yet: a self-charging robot slave that goes to meetings in your place. Imagine the possibilities that Robie the Robot could create. You can control the robot from a personal computer, using its two-way audio and video technology to participate by proxy. You also could send Robie out to the water cooler to talk shop with co-workers' Robies.

Robie isn't even close to being sold at stores, but it was one of dozens of inventions on display at a research fair Microsoft hosted for hundreds of university faculty visiting the company recently.

Even today, look at the robots around us: automated gas pumps, bank ATMs, self-service checkout lanes - many service jobs are already being replaced by machines.

Fast-forward another few decades. It doesn't require a great leap of faith to envision how advances in image processing, microprocessor speed and human-simulation could lead to the automation of most current low-paying jobs.

Marshall Brain (yes, that's his name) founder of HowStuffWorks.com has written a couple of essays about robotics in the future, well worth reading. He feels that it is quite plausible that over the next 40 years most human jobs will be displaced by robots.

According to Brain's projections, laid out in his essay "Robotic Nation", humanoid robots will be widely available by 2030. They will replace jobs currently filled by people for work such as fast-food service, housecleaning and retail sales. Unless ways are found to compensate for these lost jobs, Brain estimates that more than half of Americans could be unemployed by 2055.

Click Marshall Brain essays - Robotic Nation, Robots in 2015

Click Take a look at Marshall Brains Howstuffworks.com

Click Inventions' wonderful world on display at Microsoft fair

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Industrial automation inflection points

A few decades ago, industrial automation involved a lot of proprietary knowledge. At the turn of the century, most commercial advantages have melted away through rapid and widespread global dissemination of this information.

DCS, PLCs, PC-based SCADA and controls drove growth in the past, but they no longer shape the future. Now we need new technologies to replace them, products and systems which will provide the same functions - cheaper, faster, better.

During a decline, good companies should be looking for revenue growth through significant new technologies that can change the rules of the game. New products that provide an order of magnitude improvement in performance or cost-effectiveness. New growth and success will result only for leaders who work with technology that is revolutionary enough to cause significant change. Look for inflection points - the technologies that bring 10X improvements.

For industrial automation, new inflection points will arrive in the next few years. This is where the growth and success will occur, from which new instrumentation and automation leaders will emerge.

My new article on this topic was published by Automation Techies.com, August 2003. Take a look.

Click Automation Techies.com - Inflection points

Click Industrial automation inflection points

Click Strategic Business transformation

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Geoff Kneen [Geoff.Kneen@atkinsglobal.com] from the UK, wrote about the problems of funding retirement for baby-boomers, and Iraq reconstruction:
    "I think it worthy of note that the UK is in the same situation as the US on both of these counts. We cannot fund our retiring masses, and our taxpayers will be hit for reconstructing Iraq. Also, like the US, we paid with troops lives. In the UK this problem is running a little deeper, with the suspicious death of an individual 'involved' in a dispute between our government and the BBC.

    "In truth, our issues lies between the fact that we are neither European, nor American, and we play footsie with both. The big problem may come when one of the two wants to jump into bed with us, and finds that we were just a tease.

    "With the huge amounts of national debt in the western world, the downturn in the economy and the war on terrorism, I fear the complete collapse of capitalism and commercialism that has existed throughout my lifetime. What lies beyond?"

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Bob Holland [bobholland@charter.net] was stimulated by my discussion about globalization:
    "Your lead editorial on Globalization has left me reeling. As a former Peace Corps volunteer, I have seen globalization from the perspective of its potential to increase world understanding. I have wondered (with some scorn I admit) about the motives of the demonstrators at the World Trade Organization meetings, who have seemed to me to be nothing but incoherent Luddites.

    "Lately, however, I watch the world descend into increased Balkanization, mass atrocities, disease, famine, religious fanaticism, and more. Especially, I watch my President throwing our national resources into efforts to support growth in corporate profit-seeking, at the expense of morality, and at the expense of most Americans. He panders to those in the top 5% income bracket, and particularly those in that bracket who espouse corporate and personal greed as being somehow virtuous.

    "I cry for people everywhere in their desperation. But also, for the first time in my life, I'm worried about the future prospects for my own family. Our Constitution is being eroded. Somehow, we must return to its values."

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Rudolph Bosch [rjjbosch@hotmail.com] considered himself an "Old Age Liberal" and wrote on Liberal extremism:
    "Everyone, regardless of their position on the scale of extreme left, to central, to extreme right, feels they are correct and stand centrist. Even though they may publicly accept the (press) label of liberal or conservative, these labels tend to divide us. Is that a plan? And by whom?

    "Where are you and I? What is our actual position? I suppose only God really knows. At any rate we should be OK as long as we are willing to pass ideas back and forth. So again thanks for your ear and your replies and your enews.

    "Let me quote Dale Carnegie's How to Win Friends and Influence People: 'The only time it is impossible to reason with someone is when they have taken an emotional stand on a product, or an issue.'

    "We all need to be aware of this very correct observation, and stand guard. Extreme Caution: nothing provokes an emotional stand like politics!

    "Yes, liberal extremism does exist right along with conservative extremism! Both forms are blinding. Stay open!"

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