JimPinto.com - Connections for Growth & Success™
No. 140 : 30 December 2003

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

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What will Keith Nosbusch do as Rockwell CEO?

Rockwell Automation has named Keith Nosbusch, 52, as president and CEO. He succeeds Don Davis, 64, who will remain as Chairman. Nosbusch remains president of Rockwell Automation Control Systems.

So, how will Keith Nosbusch do as CEO? The following commentary has been culled from discussions with current and ex-Rockwell employees and industry observers.

Pinto perspectives & prognostications:

  • Don Davis has been a very detached CEO, which has been difficult for Rockwell people during the past few years. There was a great need for a hands-on leader who could sell his vision and his strategy. But, Don Davis just didn't connect. Mayfield Heights, Ohio (USA) is the heart of Rockwell's automation business, and he visited there very seldom. When he did show up, he was dull, flat and unimpressive, with the same old message in all his presentations. This usually left everyone in a down mood; most managers wished that he hadn't showed up at all. It seemed that he was working on other things, though no one knew what. Most people felt that all he was doing was working with financial analysts to boost the stock for his own good - his options will allow him to retire rich. This rankled a lot of people as the company was being downsized.
  • Under Don Davis, Keith Nosbusch managed the technology side of the company. He is technically strong, but seems to surround himself with old cronies. He also lacks the "charisma" to energize people during tough times. He is very process oriented, always expecting for management by the numbers. He seems to want to turn Rockwell Automation into one monolithic business, making more use of assets, with less investment in technology. So, the passion to drive Rockwell forward is lost. Under Keith Nosbusch, expect less innovation, with more internal strife to centralize and reduce costs.
  • Rockwell's service business is a mistake, and will continue as a drag. Services take a lot of people with real experience; it is cyclic and employment is not stable. Growth in services takes innovative approaches; but Keith Nosbusch is squeezing out innovators and risk-takers, replacing them with metrics. Meanwhile, many Systems Integrators and Distributors, who have been the bulwark of Rockwell's business in the past, are losing their loyalty and turning to other product sources.
  • The other challenge at Rockwell is manufacturing. Automation suppliers are expected to innovate in their own factories, and Rockwell did this superbly in the past. But now, Keith Nosbusch will continue to reduce capital spending while assets become obsolete. More and more manufacturing is being moved off-shore (China, Korea, Malaysia) or being out-sourced (IO, displays, industrial computers, terminal blocks, sensors). This makes it seem that the company is being hollowed out. Employees are hoping that Keith Nosbusch will reverse that trend.
  • Under Keith Nosbusch, Rockwell will remain a financially driven company. Many remaining employees feel that it is no longer a great place to work. They want Rockwell to take back its leading market position, to compete head to head with Siemens, especially in North America. But, many doubt that Nosbusch can pull it off.
In the meantime, Rockwell shares are trading at a respectable 35+, with a market-cap of $6.5B. This will make it more expensive for Eaton, or others, to make a bid. However, I still feel that a merger or acquisition of some kind is in the offing.

Stay tuned...

Click Rockwell Automation names Nosbusch as CEO

Click Read the Rockwell weblog, and provide your own feedback

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The technology laws

Some technology laws actually are laws, defining how things operate. Ohm's Law relates voltage across a component to the product of its resistance and the current through it. Kirchoff's Laws deal with the sum of currents at any point in a circuit. These are the bedrock of electrical engineering.

But the popular laws, the ones that have become well known in the mainstream, are not really laws at all. They are mostly empirical, rules of thumb.

Like Murphy's Law, which was first formulated in 1949 by Ed Murphy Jr., an aerospace engineer (not the comedian). After a botched test, he declared: "If there are two or more ways to do something, and one of those ways can result in a catastrophe, then someone will do it." Other less verbose, more colloquial and picturesque versions of Murphy's Law soon followed.

Here are the "laws" that define exponential advances of technology:

  • Moore's Law: The number of transistors on a chip doubles annually.
  • Rock's Law: The cost of semiconductor tools doubles every 4 years.
  • Machrone's Law: The PC you want to buy will always be $5000.
  • Metcalfe's Law: A network's value grows in proportion to the square of the number of its users.
  • Wirth's Law: Software execution is slowing faster than hardware is accelerating.
  • Gilder's Law: Bandwidth grows at least three times faster than computer power.

Click IEEE Spectrum - The 5 Commandments

Click Murphy's Technology Laws

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The law of media oscillation

How do you get your news? Newspapers? (My grandfather said, "It must be true, I read it in the papers".) Time or Newsweek? (I know someone who said, "I don't know what to think, I haven't read TIME yet.") We all recognize that these print media are owned by large corporations, with significant bias.

Or, do you watch your news on TV? If you're one of the few who don't have cableTV, then you get your news from the major networks. Or, with cable, you have FOX News, CNN or MSNBC - repeatedly broadcasting the same stuff, their talking heads providing endless opinions.

Political labels are over-simplified. To demonstrate fairness, weak opposition is trotted out and shouted down. Discussion is reduced to cheerleading and attack in the simplest possible terms. Subtle nuances are completely lost in the noise.

As part of the push for the broadest possible public appeal, celebrity gossip replaces factual news. Disasters take precedence, the gorier the better. Entertainment, propaganda and advertising alternate with frequency calculated to maximize the viewing audience and advertising revenues. Truth and Justice are irrelevant. Genuine public-interest programs are relegated to secondary public-TV stations.

Technology guru George Gilder writes (summarized here): "Television is not vulgar because people are vulgar; it is vulgar because people are similar in relatively lower-level ways - prurient interests, morbid fears and anxieties, shocks and sensations. Because TV appeals to the lowest common denominator, it causes the culture to become depraved."

Which brings us to the "Law of Media Oscillation". The TV news process demands a series of sine curves to keep everyone interested. Up one week, down the next. The only safe prediction is that a static, unchanging political narrative is impossible, because it's boring. Stuff happens in war, politics and the celebrity scene. When it doesn't, the media half-consciously rearranges all the atoms of emphasis and particles of story choice to make it optimally interesting to the broadest possible audience. The truth is irrelevant.

Click Newsweek - The New Law of Uncertainty

Click Gilder - Life after television

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More on American energy independence

I've had a lot of response on the issue of American energy independence. Most people recognize our over-dependence on foreign oil, but still think that alternate sources of energy are too far in the future. Let's be clear - this issue is important, not only today, but in the near and far future. Clearly we must begin - the sooner the better.

A key point that was perhaps missed in my previous summary is this: Renewable energy looks expensive until the price of the US military protection of imported oil is considered by comparison. US taxpayers spends billions every year to pay for military hardware, considered an investment in America's security. The same argument can be made in favor of "investing" in a national renewable energy infrastructure. The hardware is expensive, not the energy created by the hardware.

Several people have pointed out that most energy sources are "energy inefficient" - the cost to produce is more the energy derived. Interestingly, some people compare oil to a "battery" that was produced over hundreds of thousands of years, and can now be used by extracting the stored (and limited) resources.

Many experienced people insist that the ONLY energy efficient source available today is Nuclear - which can easily serve all requirements for the foreseeable future. The problem is safety - the dangers of radiation exposure and contamination, which is widely misunderstood.

A nuclear power plant has the lowest environmental impact of anything available today, for the amount of energy produced. The energy density of nuclear fission (energy available per kg of fuel) is the highest of any option today. This reduces both the use of natural resources, and the impact of resource extraction. Clearly, a major investment in clean, safe nuclear fuel must be a major objective on the road to energy independence.

Here are some additional weblinks for those who would like to pursue this important subject further.

Click The Real Price Of Gas

Click Nuclear Power - A Clean, Safe Alternative

Click "Global Warning" movie - produced & narrated by Leonardo DiCaprio

Click Visit the American Energy Independence website

American energy independence is a political choice, not financial or technological. This website includes a link to help you find the email address of your elected representatives in congress, with a suggested letter expressing support for Energy Independence:

Click Take Action - via the American Energy Independence website

Please send your comments, feedback and suggestions to Ron Bengston:
Click Ron@AmericanEnergyIndependence.com

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Exporting jobs to stay competitive

In today’s global markets every business is pitted against worldwide competitors with consistently improving productivity, better performance and shrinking prices.

With the recent lack of growth, US automation suppliers are looking to maintain or increase profits through the only means available - reducing costs through offshore outsourcing. Beyond just labor, knowledge work such as design and engineering services are also being outsourced.

This trend has already become significant, causing joblessness not only for manufacturing labor, but also for traditionally high-paying engineering positions. Supposedly innovation, the true source of value, remains; but that too is in danger of being dissipated - sacrificed to a short-term search for profit.

For the US, the choices are clear: Move strongly to maintain a lead in technology innovation. In the face of slow growth, this means a strong commitment to a high level of investment in R&D, plus continued stimulation of an education and business infrastructure, which the world recognizes as the basis of our leadership.

My new article on this subject was just published in the December 2003 issue of Automation World.

Click Jim Pinto: Exporting jobs to stay competitive

Click Automation World - exporting jobs to stay competitive

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On the subject of energy independence, Michael Tsoukias [zibbo@ev1.net] wrote:
    "The safe nuclear option is the only road to true energy independence. The US is falling behind every day, after being the leader in this field, and despite having 20% of our electricity coming from nuclear energy (plus a lot of naval reactors). The big drawback is not capital expense, nor even safety (the safeguards and remedies are known). The problem is political.

    "Today, France is the world's nuclear energy leader - over 75% of their grid is nuclear. To operate a nuclear-based energy economy requires a highly educated and trained population pool - not merely high school or Community College, but Masters and PhDs by the tens of thousands. This needs decades-long education planning, not slogans.

    "In the US, our technical education system is creaking, because we turn out lawyers and MBAs by the hundreds of thousands. We think it is cheaper to import engineers and scientists and doctors from India and China, as we import laborers from Central America. This hastens the proletarianization of the professions, leading to a declining, caste-centered society.

    "In the past, the job of the Congressional Science Advisory Office was to give the latest valid scientific advice to members of Congress. It was closed down, supposedly to save $10 million a year. We can only guess (and tremble) at how much legislation is based on technical ignorance."

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Richard C. Wargo [rwargo@specllc.com] on the rise of Wal-Mart:
    "Well, in the minds of the typical American consumer, it's everyone out for themselves. "Why should I care about the suppliers, I just want the lowest price for adequate quality." Obviously, one cannot deny the economic power of Wal-Mart. But remember the people that make the decisions there are not making decisions for the good of anyone other than themselves. It's what makes capitalism so great. All those selfish economic forces pulling in all different ways. A dynamic balance, if it is working properly. This appeals to the innate sense of selfishness and greed in all of us. Communism failed because the underlying ideology was altruism, a totally irrelevant concept if you are starving.

    "Quite frankly, until the whole world reaches a relatively uniform level of prosperity, I don't see the underlying problems going away. Years ago, it was our turn to be the industrial giant, providing products at a lower cost than others. Now it is someone else's turn. It's hardly surprising. Of course, it doesn't help when the government jumps into the fray with inducements to increase consumer spending, all to keep the economic wheels turning, no matter what the systemic cost. All this so that some people can pretend that they are in charge."

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Jiri Baum [mailto:jiri@baum.com.au] on electronic voting:
    "One of the things about a voting system is that not only does it have to give the right answer, it must be seen to give the right answer. Even the possibility of fraud is a big problem, regardless of whether or not it occurs.

    "The likes of Diebold machines fail this test. The only public scrutiny they're subjected to is a quick functional test. It would not take a genius to add a 'bug' to the program which reassigns a small percentage of the votes under voting-day conditions, and it would be practically undetectable.

    "One solution is to add the receipt printers and have voters deposit them in a traditional ballot box, but it increases cost. (Essentially, the machine will then be a very expensive variant of an exit poll.)

    "Another solution is to make the voting software Open Source, as it is here in Australia in the electronic voting pilots. Diebold would still make their money, since they produce the hardware and the consulting to make it work. But, any interested citizen would be able to obtain a copy of the code and check for any discrepancies. Few would actually do so, of course, but it only takes one person finding a problem, and the specter of scrutiny alone would serve to keep the manufacturer fair."

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