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JimPinto.com - Connections for Growth & Success™
No. 76 : February 7, 2002
Keeping an eye on technology futures.
Business commentary - no hidden agendas.
New attitudes, no platitudes.
Contents:
- Automation Update 2002 (2)
- Yokogawa cancels Johnson Controls joint venture
- GE buying Legrand?
- Tyco 'Enronitis' - purchase of Invensys Flow-controls off
- Invensys fire sale of battery business
- Eaton Rockwell relationship heating up
- Web water coolers - gossip and chitchat
- Work, play and romance in the new age neighborhood
- New Book: Flesh & Machines - How robots will change us
- Poem: The perfect funding
- eFeedback:
- OK to download free music? Response from a 'struggling musician'
- Notes on the movie - Beautiful Mind
- Dangers of buying into companies which face extinction
Automation update 2002 (2)
Yokogawa cancels Johnson Controls joint venture
Yokogawa will cancel the joint venture agreement with US-based Johnson
Controls and sell its 45% stake to Johnson for an undisclosed price on
April 3. The JV was capitalized at only $ 6m and generated revenue of about
$220m in fiscal 2001.
The Johnson relationship with Yokogawa was "ugly", reports a knowledgeable
insider. The Japanese JV was profitable in the past, but probably not now;
the US JV was never profitable (possibly because of transfer pricing etc.).
Yokogawa wanted the US JV as an entrée into the US measurement and control
market, which they got. Along with the rest of the Japanese economy,
Yokogawa is hurting and needs cash. The time is right to sell the JV off.
Johnson Controls to acquire remaining JV interest
GE buying Legrand
GE is now studying an offer to buy France's Legrand, the French maker of
electrical products that Schneider was ordered to sell by European
antitrust regulators. Buying Legrand would help GE expansion in Europe
after the EU blocked its $47b purchase of Honeywell last July. The EU
vetoed Schneider's 7 b euro ($6 billion) purchase of Legrand in October,
saying it would stifle competition in the electrical-equipment industry.
Schneider bought 98 percent of Legrand and also took on 1.5 b euros of
Legrand's debt before the EU rejected the takeover. The sale to GE will
fetch about 4.5b euros, or about 1b euros less than it paid. Hmmm.
Invensys - battery business fire sale
To relieve its debt burden, Invensys will be forced to take a $310m
exceptional charge this year after selling its industrial batteries
business for a disappointing $505m. Invensys was forced into the disposal
of one of the company's best businesses because of the group's $4.5b debt
burden - the yucky Yurko legacy. The disposal of the Energy Storage Group
was priced well below the $600m sales it is expected to generate this year.
Debt burden forces Invensys sale of battery business
Meantime, the Tyco acquisition of Invensys Valve Group seems to have been
put on hold after the announcement of the breakup of Tyco into 4 companies.
The possible sale included 12 companies and the price was something like
$700m, with sales about $400m. Now, sale to someone else will probably
fetch a lot less, forcing another write-off.
This week, Invensys stock fell below 100p again as some analysts took on a
dimmer view of prospects. Results of the "strategic review" will be
presented to analysts by CEO Rick Haythornthwaite on Tuesday 19 Feb.
Employees are anxiously waiting to see who is in and who is out
(non-strategic companies will be up for sale).
Pinto Prognostication: Invensys itself, the "strategic core" companies,
will be sold off anyway, sooner or later.
Profit-warning gossip hits Invensys
Tyco gets 'Enronitis' - Invensys purchase on hold
Since taking over as chief executive in 1992, CEO Dennis Kozlowski, the
55-year-old architect of Tyco's growth, has spent more than $50b on
acquisitions. It now transpires that Tyco kept $8b in acquisitions from
public disclosure. This triggered a sharp fall in Tyco stock.
Tyco's Kozloski: Hard man with bite, who never barks
Eaton Rockwell merger repored heating up
An insider reported: "things are getting hot at Cutler-Hammer concerning
the possible Rockwell acquisition." In mid-January, Eaton's Cutler-Hammer
eliminated 20% of their sales force, including their automation group -
rumor has it "to make room for a major control/automation purchase." If you
look at most of the people now in charge at Cutler-Hammer you will see an
Allen-Bradley who's-who.
Web water coolers
Have you read the book: The Cluetrain Manifesto? The book heralded the end of secretive
goings-on at the top - the advent of open person-to-person email between
employees, customers, competitors, vendors - anyone who was interested.
Nothing a corporation says or does can remain hidden anymore.
Water cooler chitchat is only as good as the people gathered around. The
same is true online and web sites dedicated to inside-company scoop, gossip
and rumors are only worthwhile if people log on and indulge in free-for-all
banter about their bosses, salaries and co-workers.
We did find some sites where employees dwell on industry issues and
workplace woes. Some live up to their tell-all potential.
Go lurk...
The best of the water coolers
The Cluetrain Manifesto
Work, play & romance in the new age neighborhood
The removal of travel and communications restraints in the new age
re-defines the neighborhood, workplace and playground. The Internet now
shrinks the world to a global village and vastly expands participation.
Today, people are working, playing, socializing and romancing in a global
village.
You might enjoy my new article on this subject, published in the popular
webzine Spark Online, February 2002.
Read Pinto's "New age work, play & romance"
Take a look at the popular webzine Spark-online
New book: Flesh & Machines - how robots will change us
The world of HAL and Data, of sentient machines, is fast approaching.
Indeed, in some ways it has already arrived, as humans incorporate bionic
technology and as humanlike machines increasingly take on the work of
humans.
MIT professor Rodney Brooks has been involved in this transformation for
decades. Read his new book (just published - Feb. 2002) !
How Robots will change us
Ray Kurzweil's review of Rodney Brooks' book
Poem: The Perfect Funding
During these days of the dot.com demise and stock market decline, funding
of new tech-ventures is difficult, if not impossible. Indeed, new
terminology has arisen - the "down-round" - new investors coming in at a
significant discount from earlier funding, something unheard of in the
past.
But, one high-tech entrepreneur found funding for his high-tech venture in
San Diego - beyond his wildest expectations. You might enjoy my poem
describing the process, published in the popular San Diego magazine The T
Sector.
Poem - The Perfect Funding
Popular San Diego magazine The T Sector
eFeedback
Regarding the free downloading of music and software through P-to-P
programs like Morpheus, Henry Swanson had expressed an opinion that
struggling musicians and software developers deserve to be paid for their
work.
Jonathan Point from Australia [jonpoint@start.com.au] gives us the
'struggling musician' view:
"My years of battling with multi-national music corporations has taught me
many things:
- Music corporations are in business to make money - nothing to do with
making music.
- No 'struggling' musician ever lost money because someone copied their
music. Unless you are a current top-40 player (not a big number out of the
thousands of musicians), you don't get much from sales. You do get paid a
measly retainer, preventing you from undertaking work with anyone else!
- The only way that anyone can hear what's current is to hear it. The
record company don't advertise because they haven't picked it as their
flavor of the month. If record companies spent a little on lesser
musicians, they'd have more successful artists; but the short-term profit
wouldn't be there.
- Profit belongs only to the wholesaler (technically the record company)
and retailer. I know many people (big names from the past) whose music is
still heard around the world, but they only get a few dollars per month.
"So, as a 'struggling musician', I implore everyone to go out and listen,
download, share and compare all the music you can. It's the only way you're
gonna hear it! Of course you won't hear this from any 'major contract'
players because their contracts forbid them even to admit that it is
possible to access their music except via the 'proper' channels."
Byron Goldstein [tek_experts@hotmail.com], from the previous
marketing/advertising/pr agency for Eurotherm BI (before Invensys), wrote
regarding the movie "A Beautiful Mind" :
"I too enjoyed the film. Good acting, interesting subject matter, great
presentation. However, it was a little bit Ron-Howard-syrupy... And, it
was not entirely factual, according to Nash. OK, so it wasn't a
documentary. As a film it was good. But we should not be mislead to think
that it totally factual. If you want to read a contrary review, see the New
Yorker - sometime in the past few weeks."
Neil Brown [neil.brown@rtel.com] from Real Time Engineering Ltd. in
Scotland commented on the "automation majors":
"I have been warning clients (several of whom should know better) about the
strategic dangers of buying into technologies and/or vendors that face
imminent extinction. My own views are in line with yours, but perhaps a bit
more radical. If you look at the history of digital businesses, it's all
brutal. Volume brings cash, allows product development spend, leads to
volume. Often, there is only one winner (e.g. Microsoft), seldom more than
two or three."
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