JimPinto.com - Connections for Growth & Success™
No. 77 : February 19, 2002

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

  • Automation Update 2002 (3)
    • Major Invensys re-organization announced
    • Yurko re-surfaces
    • ABB - Directors pension fiasco
    • Huber-Mills identifies Danaher as a growth company
  • Nanotechnology - the coming revolution
  • The fully automated factory
  • When the going gets tough
    • How to find a new job - fast
    • Save your company, save your good people
  • Good book: the Invisible Future
  • eFeedback:
    • Clarifying Yokogawa & Johnson Controls JV
    • Tyco's bout of 'Enronitis'
    • Rock & Hammer or Honeyrock ?

Automation update (3)

Major Invensys re-org announced
The anxiously awaited Invensys restructuring plan was unveiled on Tuesday, 19 Feb. 2002. CEO Rick Haythornthwaite, appointed last July to revive their fortunes, is asking investors to wait until 2006 before they see results. The target: turning Invensys annual organic growth rate from negative to 7% growth and improving profits from 8% now to 15% - with a 5 year wait (2006).

Investor response: Shares slid 12%, closing at 97p.

Here is a summary of the Haythornthwaite strategy:

  1. Consolidation into two core divisions, Production Management and Energy Management. Production management includes Foxboro, Wonderware, Triconex, APV, Eurotherm and Baan. Total revenue: £1.6bn, profit 2%.
  2. Energy Management includes Energy Solutions, Metering Systems, Appliance & Climate Controls and Power Systems. Total sales £2.4bn, profit 10%.
  3. The development division may or may not be retained, depending on offers - includes Rail Systems, Wind Power & Power Components, total sales £0.7bn.
  4. Invensys' recovery is to be funded by selling off the Industrial Components and Systems Division, including Rexnord, Flow Control, Fasco Motors, Sensor Systems, Drive Systems, BAE Automated Systems, Energy Storage and CompAir. Total sales £2.3bn. The strategy is based on this raising £1.5bn.
Pinto Prognostications:
  • Haythornthwaite said that "100 managers" were involved - I counted very few, beyond Parthenon the outside "hired-guns". The rest of the company was Haythorn-waiting. The details of how the individual divisions will implement the strategy will follow (May 2002), presumably with local manager involvement.
  • Open house at all the companies for sale. Employees, don't feel bad - you'll probably be better off!
  • Key statement: this "recovery strategy" is worth twice what a break up would yield - there were no significant offers-to-buy.
  • Lots of praise for Emerson and Delta V, as growth & "marketing" models.
  • What's left is Siebe, before the BTR merger. Lord Marshall of Knightsbridge (who pushed the BTR merger and came with it) will be dumped.
  • Haythornthwaite himself won't wait - having orchestrated the strategy, he'll be gone before the year is out.....

Click UK Financial Times: Invensys plans to slim down

Click UK FinancialTimes: Long wait for Invensys to bear fruit

Allen Yurko re-surfaces
The former Invensys CEO, the very same one that drove the company into virtual bankruptcy, has now re-surfaced at Compass Partners, a private equity and investment banking "boutique". His assignment is to look for potential acquisition targets - hmmmm....

The UK Sunday Telegraph reports that Yurko quit Invensys without any severance pay; it did not mention his handsome pension payment, which he had arranged to become fully vested by the age of 50 (about a month after he had made the "arrangement"). Yurko left Invensys at the end of January (presumably with full pay up to that time) - and a couple of weeks later, he turns up at Compass.

Yurko had told friends that he was going off to play golf, and was "wooed" to join Compass by Paul Soldatos of Compass, evidently on the golf course. Apparently Mr. Soldatos had not read the UK newspapers when they reported the mess that Yurko had caused at Invensys.

The newspaper report goes on to say that "Compass is keen to capitalize on Yurko's deal-making experience. He masterminded the £9.4bn takeover of BTR by Siebe to create Invensys and was responsible for many of the smaller deals that enabled Siebe to grow." Nowhere is it mentioned that BTR Siebe had turned sour under Yurko's direction, with a plunge to less than 10% of its former value.

One former Yurko confidante whispered in my e-ear that Yurko had used his pension payments to "buy" a Compass partnership. What happens is - you put some money into the "private equity" fund and become a "partner".

Now, wouldn't it be funny if Yurko uses Compass' money to finance purchase of Baan, or a bankrupt Invensys? That would indeed merit a Pinto poem. Stay tuned...

Click UK Sunday Telegraph - Yurko joins the stampede into private equity

Click Compass Partners website

ABB Directors' pension fiasco
The latest victim of Enronitis may be ABB, now in the midst of an ugly public dispute with ex-CEO and Chairman Percy Barnevik, once considered the Jack Welch of Europe. ABB's board of directors said it would press Barnevik to pay back some of the $80 million pension benefits he received after his resignation as CEO in 1996 (he stayed on as chairman until 2001). ABB is also pushing Goran Lindahl, Barnevik's successor who stepped down as CEO in 2000, to pay back some benefits.

After several quarters of disappointing performance, problems seem to be piling up at ABB. The company had once prided itself on using US-style multi-nationalism to become a model European business. This past week (Feb. 13 2002), a top-level feud became public, even as ABB announced an additional $1.4b in write-downs after taking a charge of nearly $500m just a few months ago.

Click UK Independent: ABB demands Barnevik pay back part of pension

Click Business Week: Huge tremors at Swiss giant

Huber-Mills identifies Danaher as a growth company
Lest we dwell too much on industrial-controls companies that are bumbling and stumbling, let's look at one leader that is doing well - Danaher.

Danaher (DHR)- $4b sales, market-cap $ 9.5b, is currently trading near its 52-week high. 1/3 of Danaher is tied up in things like hand-tools, which it sells to Sears, while the other 2/3 are generally categorized as "industrial controls".

The well-respected Huber-Mills Digital Power Report (an affiliate of George Gilder) highlights Danaher as "a central player in the emerging industrial universe of digital motion". According to Huber-Mills, the blandness of the "industrial controls" label obscures the technological revolution unfolding beneath.

Danaher is now moving rapidly into the transportation sector, the universe of electrically powered motion, which is now changing in truly fundamental ways. This is a new universe of digital, electro-motive transducers and actuators that will propel the next great productivity boom in the US economy. This is technology that moves "stuff", not information. Electronic motion control brings quantum leaps in flexibility, precision, efficiency and reliability to applications as diverse as robots, wheelchairs, life-trucks and packaging machines.

Click Danaher website

Click Huber-Mills Digital Power Report

When the going gets tough

Now it's happened to you. After umpteen years working there, you have been laid off. Let go. Sacked.

You knew it might happen, but you didn't really think it would happen to you. Maybe this isn't the first time. Maybe you've been whacked before. You still didn't think it would happen to you. Not again. You've worked overtime. You've worked nights and weekends. You busted your hump for that job. For what?

Okay, take a deep breath, and start the next part of your life.

Thus starts this excellent article by my friend and marketing sage Walt Boyes. Whether you need it right now, or not, read it!

Click Walt Boyes: How to find a new job - fast

Now, let's look at the employer's side - the decision-making process that good managers must go through to serve the best interests of the company. Whether you're a supervisor, a department or general manager, a vice president, or a CEO, if you have people working directly for you, you're in the hot seat.

When your company does not meet projections, the simple decisions come first: Cut out frills and all unnecessary expenses. But if the decline continues - if growth becomes shrinkage and profit becomes loss - then some really tough decisions come front and center. This is where good judgment is crucial.

Find your keepers, and keep them at all costs. Your company will benefit through good work and loyalty. Work hard for your best people, and they'll work hard for you.

Click Pinto InTech article: Save your company - save your good people

Nanotech - the coming revolution

Nanotechnology - manipulating matter at the atomic scale - is the next big revolution, an "inflection point" which will change everything! It is developing to the extent that practical applications are coming within the next few years, and certainly with the next decade.

As Nanotechnology advances into practicality, achievements transcend and unite such diverse sciences as physics, chemistry, biology and even computer science. Self-assembly and programmable medicine promise to transform entire industries. At this early stage, what separates promise from hype? Find out in MIT Tech Review’s Focus of the Week.

Click MIT Technology Review - Nanotechnology Focus

Click Nature: Carbon nanotubes assemble themselves into electronic grids

Fullyautomated factories - futuristic? Or today's reality?

The promise of remote-controlled automation is finally making headway in automated factories and processes. The vision of powerful super-robots without people to tend them required networked intelligence. This is now well developed and widely available. Fully automated factories are quickly becoming an accepted fact.

Click AutomationTechnies.com, Feb. 2002 Fully Automated Factories

Good book: The Invisible Future

The Invisibe Future - The seamless integration of technology into everyday life. Essays, edited by Peter J. Denning (Pub. Oct. 2001)

Leading visionaries discuss the future of information technology - how will E-commerce and E-consumers interact in 2020? What will the relationship between man and machine, man and information, and information and machine mean for future generations? Elite group of 17 business and academic leaders answers these and other strategically critical questions. Includes never-before published essays by: Rodney Brooks, Michael Dertouzos, Alan Kay, Ray Kurzweil, Bob Metcalfe and more.

Easy, entertaining and worthwhile - read it!

Click Look at "The Invisible Future":


Following my comments (eNews 7 Feb 2002) on Johnson Controls buying the Johnson-Yokogawa Joint Venture, Wayne Lukehart [Wayne.Lukehart@EmersonProcess.com] provided this clarification:
    "The Johnson-Yokogawa JV in the US (separate JV from the one in Japan) was dissolved several years ago with Yokogawa buying out Johnson. The news referenced is only for the Yokogawa-Johnson joint venture in Japan with Johnson buying out Yokogawa."
Regarding Tyco's recent bout of 'Enronitis', Mike Willey [mwilley@gfgroup.net] comments:
    "I lived in New Hampshire in a neighborhood with several of the Tyco execs back in the early 1990's. They were always very aggressive people. Later, as a Division President for Emerson Electric, I could never understand how any of the Tyco execs could really know their consolidated financial state. With continual acquisitions being integrated into the company, there was never any time when the financials would have been stable enough to really know what is going on. As in most of these cases, when business is booming it can hide a lot of bad decisions/transactions. These issues have now come home to roost."
I've been having a lot of feedback on the activities brewing around a Rockwell & Eaton (Cutler-Hammer) merger - with no denails of any kind from either Rockwell or Eaton management. Bob Nickels, [bob.nickels@honeywell.com]came up with a cute name :
    "Say - do you REALLY think there is anything between A-B and C-H? I kinda like the new name possibilities - 'Rock and Hammer' maybe?"
Amusingly enough, the earlier talk of a combination of Honeywell with Rockwell brought up the possibility of 'Honeyrock'.

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 2000-01-02 : Jim Pinto, San Diego, CA, USA