JimPinto.com - Connections for Growth & Success™
No. 55 : August 5, 2001

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

  • Invensys: Yurko's retreat - Depends on what IS is
  • Invensys - for sale
  • Honeywell - re-org after GE
  • Market for MEMS - cell phones
  • Printable batteries
  • eFeedback:
    • The meaning of silence
    • Marketing in industrial companies
    • Definition : "knacker's yard"

Invensys : Yurko's definition of what IS is

Apparently, Allen Yurko's full-scale retreat from the bloody corporate battlefield was summed up perfectly at last Wednesday's annual meeting, when he marched onto the podium to the strains of Tchaikovsky's 1812 Overture. (The piece was written to commemorate the disastrous retreat of Napoleon's bedraggled and downtrodden army from Moscow.)

In an interview with the UK Sunday Telegraph, a still unrepentant Allen Yurko brazened it out. He kept defending his strategy - merging with BTR and buying BAAN - with an arrogance reminiscent of the Clintonesque "depends on your definition of what IS is". Yurko on the merger with BTR : "The BTR deal was the smartest thing I have ever done." (Hmmm... that's not very smart.))

Recognizing how important BAAN was, perhaps "it should have reported directly to me." (That is an unfair slap to Bruce Henderson and others, who ran it admirably well, given the circumstances. Perhaps if Yurko had run it himself, it would not be in its present recovery mode...)

Yurko: "I do not accept that I have ever changed strategy." (Hmmm... in a fast-changing environment, that's a stupid statement.)

Yurko keeps falling back on his biggest excuse - that the US industrial economy is bleak - ignoring that fact that he had kept pushing his managers mercilessly for profits and cash-flow, which was a short-sighted palliative and would merely heighten their plight.

Yurko : "My mistake was believing things were going to get better way too soon, but that was my guidance." (Hmmm... who exactly was giving him guidance? People who worked with him report : "He'd never listen!")

Yurko summarizes: "I do not expect sympathy. I am not expecting people to give me high marks. I do not want the tone of this to be that I am feeling bashed. I am a big boy. I wanted to do the right thing and am not asking for special consideration." (Hmmmm... Who is offering sympathy? Who is giving him high marks? His pension of $500k/year or $7.5m immediate cash-out was "special consideration" indeed.)

One senior cohort reported: "Allen seemed sad, during a lunch last week". I must admit I couldn't stop laughing.

Click Read for yourself : Telegraph Interview with Allen Yurko

Invensys for sale

The UK Observer reported on Sunday (29 July '01) that Invensys "is putting itself up for sale". The newspaper quoted senior company sources as saying the board was interested in attracting bidders. "If there is a sensible offer made for Invensys or any part of it, we would definitely consider that very seriously."

The unofficial price tag was set at 8-9 billion pounds - compared with market-cap of 2.9 billion pounds (on Friday 3 August '01, the stock closed at about 82p, compared with 400p when this mess started). Underlying message : Invensys is for sale - make an offer.

One Invensys employee from Australia wrote this : "I hear that INVENSYS can be bought for 8-9 billion pounds. I wonder how much they expect to get for me?"

Click Financial Times Market-watch - Invensys keen to sell up

The new CEO, Rick Haythornthwaite (45) will be paid about $1m per year (a cut from Yurko's salary of $1.2m). No one knows yet what Haythornthwaite's incentives are, for saving (or selling off) Invensys. His biggest claim to fame is that he sold a cement company to its major competitor.

The new million-$ man, wrote this to his new employees (extracts from his memo):

    "I took this job because I am convinced that there are fundamental strengths in the Group and its people which are just waiting to be released. My first impression is that Invensys is a good company, with the potential to be an even better one. We have a strong base on which to build: strong market positions, advanced technologies and good relationships with our customers."

Hmmm... Haythornthwaite seems to be rehearsing his pitch to possible buyers.

    "My first priorities will be to stabilize the business, build confidence in Invensys' future with the financial community and develop my understanding of the Group as rapidly as possible."

Hmmm... It will be interesting to read Haythornthwaite's words when he announces to the same employees that they've been sold off.

Click Invensys Chiefs come under fire

Pinto Prognostications:

I had ONE nameless email feedback - "Give the Yurko and Invensys bashing a rest. Every major industrial controls company is suffering from poor sales." When I asked the person for a name (which I would have kept confidential, in any case), there was an ominous silence.

In the meantime, I have received a lotttt of appreciation, especially from employees: "Pleeeease continue - we get very little feedback internally; everyone is paranoid about what is going on."

All things considered, I'll continue to provide a summary of new-news, sprinkled with some of my own prognostications.

Click Read the whole background & story The Invensys decline

Honeywell re-organizes after GE exit

If the GE deal had been approved, GE was going to break Honeywell Industrial Automation &Controls (IAC) into 3 different parts 1) Systems, 2) Products, 3) Services. After John Weber had gone (deposed IAC chief, fall-guy for Bonsignore) Ron Sieck of Sensors & Controls (S&C, former Honeywell Microswitch core, based in Freeport, IL - near Chicago) was given the top IAC job on an interim basis, pending the GE merger.

Now that the merger is off, chief Larry Bossidy has initiated a re-org, with a public statement that "red vs. blue" attitudes will not be tolerated. Bossidy seems to be bringing in ex-Blue (AlliedSignal) folks for most of his top jobs. He has a one year contract and wants a team he can work with.

Kevin Gilligan, who was running Honeywell Home & Building Controls, is now running all of the "old red Honeywell" (with the exception of the aerospace stuff). This is now the combined "ACS" (Automation and Control Solutions) which now includes IAC, which itself had included S&C.

Gilligan is NOT highly admired, even among his own troops. He has done nothing substantial with either products or systems for years. He is keeping his Home & Building Controls leaders and bringing in some new blood to head up the projects pieces. Combination of the service businesses makes sense, as there is lots of synergy there and should have been done long ago.

Insiders report that, with all the changes and uncertainty, everyone is still "a little jerky".

Pinto Prognostications:

The Honeywell prize (which both GE and United Technologies wanted) was Avionics, which is now run independently and Bossidy will sell it separately.

No one really wants the rest. Honeywell IAC (like Foxboro at Invensys) may be better off consolidated with Siemens, Schneider or Emerson. Investment has languished and these companies will need a lot of new developments and leadership to thrive again. In both cases, the problem is that the financials have been fiddled, making a lot of write-offs likely.

Cash coverage is unhealthy and that means, as separate businesses, they'll have to sell assets for liquidity. This makes purchase by independent asset-sellers the most likely scenario. In spite of Bossidy's one-year timeframe (similar to Haythornthwaite's at Invensys) both companies will be accepting offers from all reasonable buyers for any or all of the pieces. The next few months will be interesting.

GE, Tyco, Emerson and others are certainly "looking" at both Honeywell and Invensys. My own opinion is that they will wait for the pieces they want to be available separately.

Let me give my friends at Foxboro, Honeywell IAC, Eurotherm and others some comfort: the strength of your companies is in your middle management and installed base. Whoever acquires it will be looking for the key ingredients that make a difference - YOU, the management that can help make your company a success.

Click The complete Honeywell Saga

Cell-phones - big market for MEMS

Five years ago, the average cell phone contained about 500 individual components. Now, the number had shrunk to about 100. Integrated components cost less to produce, making a single product with integrated subsystems cheaper. Integrated components are smaller, save wiring and board space, and reduce assembly cost. Fewer components mean fewer reliability problems.

When new third-generation (3G) cell phones arrive, the desire for multi-band, multi-protocol phones, with features such as GPS, inertial sensors and biometric authentication will add a lot of new components - and users will expect the form-factor (size, shape, battery-life, etc.) to remain unchanged. But, some of the additional components are not small and flat, so integration becomes difficult.

This is where microelectromechanical systems (MEMS) comes into play - relays, tunable capacitors, inductors, filters, microphones, reconfigurable antennas, local oscillators, resonators, switches, and programmable phase shifters. MEMS shrink the components to be compatible with standard semiconductor processes. This lowers cost, reduces board space and power-use. So, cell-phones become the next big market for MEMS.

Click MEMS revolutionize handset components

Click Excellent MEMS website: Dynamic Silicon,

Printable batteries

A new type of low-power battery that does not require a case and is thin enough to be printed on paper will soon be commonly available.

The battery relies on a mixture of chemicals to produce 20 milliamp-hours at a voltage of 1.5 volts for every square centimeter that is printed. The battery material is about 0.5 mm thick and would, if mass-produced, cost just a few cents per square inch. It consists of three different layers - conventional zinc manganese-dioxide components as anode and cathode and sandwiched in between, the cell's chemical power source - which remains a closely guarded secret.

The developer, Power Paper from Israel, claims the material is non-toxic and non-corrosive, making the battery safe to use without any casing.

Click New Scientist Printable Battery

Click Power Paper website


In the most recent eNews, I wrote:
    "The strategic marketing people at some of the troubled companies have been strangely silent. It's almost like a radar - one can actually sniff out stupidity by the lack of noise..... "

Jake Brodsky [jBrodsk@wsscwater.com] responded:

    "This is strangely similar to how US Navy used to track the newest generation of Soviet submarines: find a body of water where the noise they'd expect wasn't there. The Soviets made no masking noises, probably figuring that it's better not to make any noise than to deliberately make noise and remove all doubt.

    "Of course, if you DO make marketing noises, it better look just like real marketing or the BS detectors will start going off and you'll look even more stupid."

An experienced industrial automation marketing person sent this:

    "I have worked for 27 years in marketing and strategic marketing positions at Foxboro, Texas Instruments, Siemens, Elsag Bailey and ABB. The "strangely silent" marketing people are kept quiet because of the current wave of management. At the risk of over-generalizing, the 1970's saw a wave of sales types at the top; the 1980's saw a wave of operations types at the top; the 1990's saw a wave of finance/accounting types at the top. The current wave is a mix of operations types.

    "The theory is that a company will find their sweet spot, shift to another through strategic acquisitions etc., and have enough discipline in sales, R&D, operations and sales to implement the strategy."

Don Caffee [valpers@yahoo.com] was curious about the Times UK mention of Invensys being sold off at "knacker's yard" prices. He sent this:

    "I asked some of my friends in the UK what the term "knackers" meant. In case you don't know, he says "knackers" is an old English word meaning "Knackers Yard" - a place where old horses are put down when they are past their useful life. His remark: Not a bad description, eh!"

JimPinto.com eNews - on the web

If you've missed a couple of issues of eNews, or wish to refer to earlier items, please note : You can see ALL past issues online at :

Click Click here to see the Index of ALL past JimPinto.com eNews

eSpeak to me

If smell something fishy in your pond, please e-let me know and I'll check it out. Please send your tips and alerts, your news, views and stews. I'd like to e-hear from you.

If you have comments or suggestions for Growth & Success News, please contact me directly at : Click Jim@JimPinto.com

Subscribe or Unsubscribe

If you got this eNews through someone else, you might like to subscribe for a regular free copy, direct to your own email. Just click your mouse on :
Sign up for regular hot news, views and stews

Or, if you're lazy, simply send a blank email message to :
Click Sign-up@JimPinto.com
with subject line : "sign me up for JimPinto.com E-mail news".

To be removed send a blank email message to
Click eRemove@JimPinto.com with subject line "Remove".

Stay in e-touch!


Return to eNews Index Return to eNews Index

Return to Jimpinto.com Homepage Return to JimPinto.com HomePage

If you have ideas or suggestions to improve this site, contact: webmaster@jimpinto.com
Copyright 2000 : Jim Pinto, San Diego, CA, USA