JimPinto.com - Connections for Growth & Success
No. 107 : December 30, 2002
Keeping an eye on technology futures.
Business commentary - no hidden agendas.
New attitudes, no platitudes.
- 2003: Happy New Year! Transition to a very different future
- Nanotech & Self-organizing systems - Crichton Novel: Prey
- Cattle clones pave the way for human cloning
- Automation update: Year-end 2002
- Siemens, ABB, Invensys, Rockwell, Honeywell
- Emerson, Schneider - starting new weblogs
- Leadership counts - Jack Welch & Lee Iacocca
- Human cloning - can we change our moral foundations?
- Comments on Chinacosm & Indiacosm
Happy New Year!
The year 2003 will NOT be just any new year. The new millennium
is 3 years old and the world faces an uncertain future as reality
Transition to a very different future
With a congressional majority in tow, the President seems to be
promising a return to the "good old days": terrorists will be
safely neutralized by the Homeland Security behemoth, greedy CEOs
will be banished forever, business will be back in the hands of
selfless leaders and the stock market will be booming again.
Things will right themselves - just as surely as Palestine and
Israel settle together in peaceful coexistence; just as soon as
Saddam proves that Iraq is indeed devoid of weapons of mass
destruction; just as certainly as Al Qaeda terrorists sign a
truce and deliver Osama to world justice; as fast as two million
unemployed return to work in a revitalized economy.
The impending war with Iraq (and now N. Korea) clearly runs the
risk of igniting far greater conflict. How many millions must die
before the paradigm shifts? What is the catalyst that will signal
the recognition that no one is right or wrong?
There is growing recognition that conventional hard solutions are
completely inadequate - tanks and warplanes cannot stop a suicide
bomber. The mass of humanity yearns to renew itself. The time for
transition is near. The change will come when we care enough to ask
each other, "What am I doing that makes you feel you must hurt me?"
With understanding will come perhaps the beginnings of universal
brotherhood of humanity. Can that social wisdom come without pain?
Ever the optimist, I predict - perhaps I just feel - that the
solutions already lie within the problems themselves. Inventive,
innovative, caring, charitable, far-sighted humans will indeed
find a way. The future will be a better place.
I wish you a peaceful and prosperous New Year!
Pinto article: Transition to a very different future
Finding a softer approach for a new century
Nanotech & self-organizing systems
At Caltech over 40 years ago (Dec, 1959) Richard Feynman gave a
talk "There's Plenty of Room at the Bottom" - the challenge of
manipulating and controlling things on a small scale. His talk
started the ball rolling on the science of creating molecular
devices that could compute, assemble and replicate themselves.
This was the concept of Nanotechnology.
Michael Crichton's novel - PREY
In 1986, K. Eric Drexler published "Engines of Creation", the
groundbreaking Nanotechnology book. It described ways to stack
atoms, assemble machines much smaller than living cells, make
materials stronger and lighter than anything dreamed of today.
Nanotech applications included better "skins" for aircraft and
automobiles, tiny devices that can travel along capillaries to
enter and repair living cells, the ability to heal disease,
reverse the ravages of age, make the human body stronger. The
idea was born that we could make machines the size of viruses.
We could assemble these myriads of tiny parts into intelligent
machines, perhaps based on the use of trillions of nanoscopic
parallel-processing devices that would learn from previous
Eric Drexler warned,
"There are many people, including myself,
who are quite queasy about the consequences of this technology
for the future. We are talking about changing so many things that
the risk of society handling it poorly through lack of preparation
is very large."
Drexler's warning is included in the introduction to Michael
Crichton's new techno-thriller PREY. The author of Andromeda Strain,
Jurassic Park and other best sellers, weaves a story about the perils
of Nanotechnology. This is combined with a technically realistic
account of distributed intelligence, self-organizing systems and
emergent behavior - the subjects Dick Morley has been discussing
at his Santa Fe Chaos conferences for several years.
PREY brings to mind Bill Joy's well-known Wired article, "Why the
Future Doesn't Need Us." He warned, "Our most powerful 21st-century
technologies - robotics, genetic engineering and nanotech - are
threatening to make humans an endangered species." Michael Crichton
doesn't allow the reader to relax with the feeling that the danger is
fictional - the book includes an introduction to emphasize the direct
link to reality. Drexler's warning (above) is included, as well as an
extract from a Santa Fe Institute paper by J. Doyne Farmer and
Alletta d’A. Belin, "Artificial Life: The Coming Evolution".
Here is that quote:
"Within fifty to a hundred years a new class of organisms is likely
to emerge. These organisms will be artificial in the sense that
humans will originally design them. However, they will reproduce,
and will evolve into something other than their initial form; they
will be "alive" under any reasonable definition of the word. The pace
of evolutionary change will be extremely rapid. The advent of
artificial life will be the most significant historical event since
the emergence of human beings. The impact on humanity and the
biosphere could be enormous, larger than the industrial revolution,
nuclear weapons, or environmental pollution. We must take steps now
to shape the emergence of artificial organisms; they have potential
to be either the ugliest terrestrial disaster, or the most beautiful
creation of humanity."
PREY is the story of a cloud of nanoparticles that has escaped from
the lab - self-sustaining, self-reproducing micro-robots. The cloud
is intelligent and learns from experience. It is "alive" and has been
programmed as a predator. Humans are its prey. It defeats efforts to
kill it - through self-organizing, emergent behavior and genetic
algorithms, evolving swiftly and becoming more deadly with each
passing hour. The story is fictitious, but the underlying technology
This is a good book - read it!
PREY (A novel) - By: Michael Crichton (Pub. Nov. 25, 2002)
Santa Fe Institute abstract: Artificial Life - The Coming Evolution
Eric Drexler's groundbreaking Nanotech book - Engines of Creation
Cattle clones pave the way for human cloning
In the world of big-money cattle exhibitions, the bull Full-Flush
is a celebrity. He has the wide rump, the meaty back and long neck
that impress cattle judges and professional breeders. Many of his
35,000 calves have won state fairs and national stock shows.
Now Full-Flush has been cloned, with 5 genetic copies. This is the
latest of 300 cloned cattle worldwide, an unmistakable sign that
cloning is no longer a scientific oddity. It is poised to become
a real business.
The FDA still bars the sale of meat, milk and other products from
cloned animals. They are testing to see whether cloned foods are
identical to non-cloned products and equally safe to eat. The
agency could start to approve cloned products for sale within
months, certainly in 2003.
As the year turns someone has already announced the birth of the
first human clone. At least a couple of clones are expected to be
born in January 2003. The New Year will bring several more, perhaps
Many people worry that human clones will have defects. But those
fears will quickly fade as the practice continues and procedures are
inevitably refined. Whatever your social, moral and ethical position
on this major change in human society, human cloning is fast becoming
President Bush has come out strongly against human cloning, and will
ask the Senate to approve a US ban. However, that will simply drive
US research offshore, and will benefit medical research in other
countries (notably China).
Stay aware as this important new revolution unfolds into the reality
of the new century.
LA Times - Success Breeds Imitation
Bush: Human cloning 'morally wrong'
The Human Cloning Foundation
Automation update - year-end 2002
The industrial automation business is still "on hold" - a reflection
of an economy with an uncertain future. Most companies are still doing
incremental cutbacks to "meet budget". Their plan is to survive, with
very little thought for future success.
Here we'll provide a few Pinto perspectives and prognostications on
some of the automation majors that we have covered during the past
couple of years.
Still the largest industrial automation company. German-based with
good central management and a good financial position. To increase
market share, primarily in the US, they are still looking to make
acquisitions. They really don't know how to change their acquisition
strategy, inevitably forcing new companies to meet the German mold.
But, they are still looking at anyone who is available, which (in a
declining market) is almost everyone.
Siemens - American Managers View
The second largest industrial automation company, though they may
already have lost that rank. The company is ailing badly from the
CE asbestos fiasco. But it is basically well managed and will survive
to win another day.
ABB is still suffering from indigestion from the multitude of
acquisition made in the past few years, and so probably won't
do much more than recover during this coming year.
The ABB Blahs
In a waiting mode to find the best acquirer. The next 30 days
(Jan. 2003) will tell whether Eaton (Cutler Hammer) has acquired
Rockwell Automation. If this does not happen soon, the future is
Whither Rockwell Automation?
"Successfully" divested all their good companies at a reasonable
price, to pay off debt. This would have been OK if the "core
businesses" were doing well enough to justify the still-remaining
debt-load - which they are not.
Invensys had a bad first-half, with CEO Rick Haythornthwaite under
fire for bad cash flow. His poor excuse (quote from an interview
published on the Invensys website):
"The first thing we've done is
we've changed quite a bit of the leadership. I have a senior team
of 17 people. 14 of them are new. The next layer, the Chief Operating
Officers, have actually already made 12 new appointments."
The UK financial markets will not allow Rick Haythornthwaite any more
excuses by year-end. The banks have forced the divestitures, and they
will force cash flow to fit, or he'll be gone and Invensys will be for
sale. It is unlikely that anyone will be willing to buy the "group"
that remains. So, there will be piecemeal scrambling.
Invensys in decline
The Honeywell group overall is doing reasonably well. Honeywell
Industry Solutions (IS) has a new manager who seems to be trying
to right the ship. The specter of an acquisition by Siemens remains,
though GE may be coming back into the game. GE had made a lot of
smaller industrial-automation acquisitions at a fairly high price;
if they are interested, they'll win the bidding.
Look for some changes to occur within the first few months of the new
year. Some people even think that Honeywell may buy Foxboro, with the
pig+pig strategy. If nothing happens, I'm not sure how Honeywell IS
can continue to soldier along. CEO David Cote has his "hard ass"
reputation to protect.
Background - Honeywell for sale - GE buys then abandons
Other majors: Emerson, Groupe Schneider, etc.
Emerson is very well managed. They recently sold Intellution
(no growth and profit) to GE. Delta V remains a flagship product
with good technology plus excellent worldwide sales & marketing.
They'll continue to buy strategic pieces to strengthen their
France-based Schneider is doing fairly well. They recently moved
all Modicon (and others) manufacturing to Europe, leaving some
Engineering, Sales & Marketing behind (a typical European NIH
strategy). Schneider was stopped from buying Legrand, but has
recently made some good acquisitions to strengthen its hand.
They'll be a prominent bidder in any US sell offs.
In the past we have written items on most of the automation majors,
with linked weblogs for open commentary. We currently have no weblogs
on Emerson or Schneider. But, don't let that stop you. Send me
(direct email) your comments and feedback on these (or other)
companies, which will stimulate the start of a dedicated weblog.
If you don't comment, don't complain!
JimPinto.com weblog index
In the last issue of eNews, someone suggested that several well-known
executives did not deserve their adulation (or their high pay)
because dedicated employees made sacrifices and did much of the work.
Bud Keyes [Bud.Keyes@EmersonProcess.com] disagreed:
"I disagree relative to both Lee Iacocca and Jack Welch. Both have
big egos but this is often part and parcel of a man with confidence
In the recent eNews item on human cloning, I suggested that every
aspect of human life will need to adapt - theology, ethics, moral,
legal, societal. Wayne Williams [TWW99@aol.com] responded:
"Chrysler was in incipient bankruptcy when Iacocca took over.
The government made a loan (a sales job in itself for which he
should be credited) and he paid the loan off and made Chrysler
positive. I personally think he deserved every nickel he got
and more. It was flat miraculous!
"Similarly Jack Welch made GE into the company that it is today with
his insightful, rigorous and demanding management style and detailed
approach to business.
"Yes there were many people who helped; but without those leaders,
neither company would be where they are today. The failings of both
Jack and Lee was not to bring a successor and strong leaders on behind
them soon enough. We are now seeing problems at GE due to lack of
control and detailed involvement from the top. Bad things are now
happening that would not occur under Jack's watch. He is missed."
"The problem is that some things should not change. Societal mores are
not necessarily the guiding light. Our legal system, based on the old
English concept of natural law, maintains that there are "absolutes"
and we must hold to them regardless of pressure from the masses, with
changing times or geographical locations.
Responding to recent eNews discussions, Albert P. McCauley, Jr.
"Regarding the concept of cloning humans. Although we are reaching
a technological possibility, that does not mean we should change our
moral and theological foundations. That would be like stating that
since we have the capability to produce near-human likenesses on the
screen, yet they are not actual human actors, then any level of
perversity is legal.
"I believe the real driving force behind human cloning is the
'affluent society' pushing for a nursery for body parts. Create the
baby - then harvest the necessary parts from it to salvage the life
and/or lifestyle of those who have enough money to afford the
procedures. Notwithstanding my belief that Almighty God rules in
the arena of the creation of life, this is yet another problem
in the focus of money and technology on cloning.
"We are moving at break-neck speed towards a world that is
elitist-controlled, while leaving millions upon millions of people
in poverty, disease, and famine."
"Chinascom and Indiacosm are inevitable. The problem is that US
engineers are losing jobs because of the cost advantage provided by
the lower living costs in these two countries. China and India will
establish a cost level such that the US cannot compete. If we are more
ingenious we can - but our companies are managed by accountants whose
only skill is cooking the books.
"I received an advertisement from an advisory service run by Daniel
Ascani, typical in its hype. He makes a prediction that China will
demolish every stock market in the world when it collapses. He states
that an avalanche of failed state-run companies, and the resulting
failure of banks with skyrocketing debits caused by the state run
companies, will produce unemployment and civil unrest. If this were
to happen I believe that China could revert to strict communism and
the intelligent engineers and software people could wind up in
re-education camps. Newsweek, October 28, 2002 presents a somewhat
"We have exported our knowledge and skills and perhaps now our only
hope now is to export our poor management."
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