Growth & Success eNews No. 47, June 18, 2001

JimPinto.com - Connections for Growth & Success™
No. 47 : June 18, 2001

Business, marketing & futures commentary.
New attitudes, no platitudes.
Stay e-tuned....

Contents:

GE dumps Honeywell
Dick Morley : e-quick manufacturing predictions for 2020
5 Questions for Gordon (Moore's Law) Moore
Web Predictions
eBook : David Bell - Cannibal Economics
eFeedback
- Rockwell talking with Schneider & Siemens
- Engineers contempt for the Unabomber
- Freedom of the Internet

GE dumps Honeywell

The $41 billion merger of General Electric and Honeywell has been all but called off after GE refused the European Commission's demands to cut the size of the combined company. GE (represented by Jack Welch himself - his last hurrah before he exits center-stage) said Friday (15 June '01) that they won't make changes to a divestiture plan that was rejected by EC officials.

Honeywell said it still wants to merge with GE, but announced it was now considering its future as a stand-alone entity.

Pinto prognostications

At the end of trading on Friday (15 June '01) Honeywell stock closed at $38.80, down about 20% from the previous week (before the announcement that the merger had run into problems). GE closed at $48.81, down only slightly over the same period, after going up a bit. Evidently the stock market favors GE backing off the merger, while it considers the future of Honeywell uncertain.

GE wanted to buy Honeywell primarily because of the Avionics business - with Honeywell IAC as a poor relation. I have suggested previously that, if the Honeywell acquisition went through, GE would sell off IAC, probably to Siemens.

When GE recognized that Honeywell's condition was not as healthy as anticipated, they needed to find a way to back off from the deal. And this is the face-saving way for Jack Welch. Recognize that making a "low ball" offer (to the EC) is simply GE's way to back out of the deal, without making it look like Jack Welch is "welching".

With the relatively poor shape it is in, Honeywell cannot continue alone. This whole downhill slide started after the merger with Allied Signal which didn't yield the promised results. So, Michael Bonsignore, Honeywell CEO (the person primarily responsible for the mess) worked a deal with United Technologies, which then brought Jack Welch and GE into the game. Unwilling to start a bidding war, United backed off. (Read the whole story on JimPinto.com via the link below).

Now United may come back, though their offer won't be as good as their previous bid. Like GE, they want the Avionics business. Unlike GE, they have very little industrial automation business and will seek to divest IAC and other pieces.

The Europeans, Siemens or Schneider, will make a bid that would easily be approved in Europe and the US, because it is well recognized that Automation is in a merger/consolidation mode. Both Siemens and Schneider do not have any Avionics business and will divest that valuable piece.

Who knows, perhaps KKR or Warren Buffet will make an offer for both Honeywell and Invensys (also in similar trouble), to piecemeal them off.

Read Friday 15 June '01 News story:
GE Refuse to Meet European Union Demands for
Paring Down $41 Billion Proposed Merger:

See the previous JimPinto.com story Will GE Dump Honeywell?

Dick Morley : eQuick Manufacturing predictions for 2020

Famed technology guru & PLC inventor Dick Morley is co-author (with Patricia Moody) of the book: The Technology Machine - How Manufacturing will work in the year 2020.

Recently, Dick was e-asked what manufacturing will be like half-way to that date: 2010. Here is his spontaneous e-response:

In 2010 - Not much change.
2020 - A lot! (Commercial: Buy my book)

Middle Management Shrinks.
We won't have
- Draftspeople
- Bookstores
- Small "veggie" stores
- Telephone receptionists
- Last bastion - middle management & meetings
Modeling will determine decisions
- Simulations: City, business, education, buying, marriage, grad-school
Production will be at the end-point of consumption
Personal factories (ala personal computers)
Note : It's not the computer revolution, but the personal revolution
Fedex and Amazon win
Futurists (as usual) are too conservative
We cannot surf the back of the wave
- Backs are: personal computers, dotcom, bandwidth
- Fronts are: Intuition, Agents, dissing of urban fables in business, replicators for local and personal use, lower populations

Visit Dick Morley at his Barn in New Hampshire

Get yourself a copy of Dick Morley's book
The Technology Machine: Manufacturing in the year 2020

5 questions for Gordon (Moore's Law) Moore

Gordon Moore and Bob Noyce co-founded Fairchild Semiconductor in 1957 and, a decade later, they co-founded Intel, which now has $34 billion in annual revenue. In 1965, Gordon Moore formulated what has since become Moore's Law : the power of a silicon chip will double every 18 to 24 months, accelerating the pace of technological change.

At 72, Gordon Moore calls himself an "accidental entrepreneur". Since '97, he has been chairman emeritus at Intel and retired at the end of April 2001. In a recent telephone interview he spoke about the implications of high-speed technology. Good stuff - read it!

Five Questions for Gordon E. Moore
Technology Intensifies the Law of Change

Web predictions

"The problem with today's Internet is that it's dumb, boring, and isolated" according to Forrester Research. "News, sports and weather imparted on static Web pages offer essentially the same content presented on paper, which makes the online experience more like reading in a dusty library than participating in a new medium. Now that the novelty has faded, business executives and consumers are going back to reading newspapers and watching TV. Ultimately, the Net hasn't truly become a part of our real worlds."

What's coming is "executable applications which will give users tools to experience the Net in more entertaining and engaging ways. For example, imagine a corporate buyer navigating a virtual marketplace with a game-like user interface - buyers could simply shoot out the deals they don't want. That's a far cry from today's Web."

Also coming, "an extended Internet will emerge through Internet devices and applications that sense, analyze and control the real world. With cheap chips and a worldwide Internet backbone, nearly every device that runs on electricity will have an Internet connection, through both wired and wireless networks."

By the year 2010, there will be 14 billion Internet connections - up from the 100 million today.

Read this interesting Forrester forecast

eBook - David Bell : Cannibal Economics

Midst the cacophony of accelerating global change, the collapse of the old icons of society and the economy, this new e-book detects the strains of a new, robust and burgeoning world order. David Bell is excited and in tune. He is a prophet of the inevitable decline of old hierarchical mechanisms, an enthusiastic seer of the rise and spread of self-organizing principles.

David Bell's book uses chaos and complexity principles to make sense of all the noise in the present-day economy. He writes in a style that makes you think he is talking to you - at once fast moving, but easy to understand. He starts with graphic examples of the recent decline in the stock market, where trillions of dollars of market-capitalization of technology companies that came from nowhere, seemed to disappear equally suddenly. He debunks old economic theories by reviewing how they originated, and why the basis on which they were built are no longer valid. Indeed, he makes it evident that the old economy can no longer continue to survive, and must inevitably succumb to new realities.

You can read this book on your desk-top or laptop computer, your PDA and an eBook.

Get your copy of David Bell's Cannibal Economics

eFeedback

About the possibility of Rockwell being sold to Siemens, Paolo Pozzato [paolo_pozzato@libero.it] e-sent this tidbit from Italy:

"In Italy rumors are more favourable to Schneider instead of Siemens these days. It's difficult to imagine the deal, if done by Siemens, to be approved by antitrust authorities. Rockwell's A-B and Siemens would make the PLC world's monster. No competition anymore."

Regarding my suggestion that we might get some insights from reading The Unabomber Manifesto Jake Brodsky [jbrodsk@wsscwater.com] responded:

"Kaszynski is guilty of elevating certain concerns over others beyond all reason. Look where it took him: random bombing of people he barely knew.

"Unless I take interest in the thoughts of a madman, I see no point in reading Kaszynski's diatribe. And I certainly wouldn't bother quoting such drivel to prove a point, other than how madness works.

"We can't turn back the clock. We can't even stop it. Bill Joy and others can say what they like about humanity becoming obsolete. And they may be right, for all I know. The point is that we can't stop the need for steadily improving AI models. We can't stop the need for more information and possible cures for genetic diseases.

"We can, however, work out a political and legal platform of what we should do with this information and how we respond to the actions of others. But we will never get there by spreading fears of the unknown."

In previously e-feedback, Doug Bailey wondered whether the freedom of the Internet needs intermediaries, such as scientific journals, to validate content. Lou Heavner e-responded, bringing up Napster as free content, but with the possibility of spreading e-virus.

Jeff Dean [jeffdean@execpc.com] e-commented:

"The trouble with the Napster analogy is that if a nasty virus were hidden in a "free" music file, it wouldn't be the mp3 format - Napster would not get the bad press. It would be Microsoft, WinAmp and RealMedia (makers of mp3 players) who would be lambasted in the press for creating software that allowed the virus to execute at all, forgiving the fact that it got there while the user was violating copyright laws.

"Just because you pay for something does not make the information any more valid. While the more astute may be able to discern the difference between Scientific American, The New England Journal of Medicine, Omni Magazine, and Hank's Science Stuff, a significant portion of the population will read and lend credence to any blather they find regardless of source, cost, or significance.

"I would say the solution is not to pre-qualify the information - but rather to educate those willing to learn and accept that there will always be those willing to buy beach-front property is Arizona."

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