JimPinto.com - Connections for Growth & Success™
No. 45 : May 31, 2001

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

  • Whither Rockwell Automation?
  • Neo-Luddites - Bill Joy & the Unabomber
  • Extropy-5 conference - shaping things to come
  • Patterns of success & failure on the Internet
  • Phil Cerasoli's Poems
  • eFeedback
    • V-shaped Economic Recovery
    • Stock market short or long-term
    • Free online access to scientific information

Whither Rockwell Automation ?

Recent results for Rockwell: Sales $ 6b, market-cap $ 8.4b, recent stock price $46.50, price to book 3.02, price to sales 1.42, price/earnings 18.91 - not bad !

For the six months ended March 31, 01, revenues fell 1% to $2.29 billion. Net income from continuing operations fell 26% to $140 million, with results reflecting "a slowdown in the economy, and increased interest expenses."

With the spin-off of Collins (the avionics business), Rockwell Automation is essentially Allen-Bradley and Reliance and a few extra pieces. Revenues will be $ 6b less $ 2.9b Collins = $3.1b. I asked some senior Rockwell Automation insiders for their "deep throat" comments, and this is what I received:

  1. With the spin-off of Collins, why does Rockwell need a corporate staff that was given long term contracts when they moved from California to Wisconsin? Meantime, our contacts at Collins report that rumors are flying about a 10% layoff across the board.
  2. Don Davis likes "running" AB again, but he is so out of touch that he is not even close to the same Don Davis he once was. At 61, some feel that he is ready to make a move towards the exit pretty soon.
  3. Regarding the move to "Services”: Don has always said: "Show me a service business that has predictable revenues and gross margins, and I'll show you a service business I like." His heart (wallet) is still firmly that of a hardware gross-margin man. But, the truth about the products business is coming home to roost - declining margins and tough market conditions.
  4. Most Allen Bradley & Reliance customers - Systems Integrators, Distributors - are scared to death about the competitive move on to their turf.
  5. The emphasis on systems and services is driven by survival - and the consultants. There is a fight going on internally amongst the 3 business units as to who will be investing - or rather, cutting - less. So far, Ron Wichter, Senior VP Software & Services Group (ex DEC) seems to be winning. Several people report that he is "rattling lots of cages" right now. The new service culture needs lots of time (which they don't have) to be embedded in our core business method. It will need vision and determination to see it through.
  6. The real market value of ROK = AB+REL will be known when Collins starts trading (end of June ’01). That could cause an interesting price dip for ROK and make an acquisition more realistic. Rockwell Automation is ripe for acquisition by any global automation company which believes that the installed base, plus distribution, would be an asset. Siemens seems to be ready and waiting.

Click Latest Rockwell financial profile

Click Rockwell Corporate website with press-releases

Click Rockwell Automation web site

Neo-Luddites - Bill Joy & The Unabomber

Many influential figures oppose the development of powerful new technologies. In his by-now famous article "Why the Future doesn't need us" Bill Joy, chief scientist, co-founder of Sun Microsystems, co-author of the popular Java programming language, writes eloquently, "Our most powerful 21st-century technologies - robotics, genetic engineering, and nanotech - are threatening to make humans an endangered species". Bill Joy is joined by various "ethicists", including Prince Charles, in calling for a technology moratorium.

Bill Joy's article was written after reading Ray Kurzweil's book "The Age of the Spiritual Machine" (JimPinto.com eNews 1 Jan 2001 ) which posed "The New Luddite Challenge". The term comes from 19th century Britain, where imitators of Ned Ludd (who accidentally damaged a weaving machine) went around intentionally causing damage to the machines which they felt would destroy the local economy. The "Luddite" movement has lived on as a symbol of opposition to technology.

In Ray Kurzweil's book, which provides some powerful arguments against unrestrained development of technology, you recognize only after you've read some of the text, that Kurzweil is actually quoting Theodore Kaczynski - the Unabomber - whose bombs killed three people and wounded many others during a 17-year terror campaign.

Kaczynski, a Harvard-educated engineer, is now in jail awaiting execution for his murderous activities. But, that does not dismiss his arguments against technology. The full text (some 250 paragraphs) of Kaczynski's "The Unabomber Manifesto" was published in many US National Newspapers. While it does ramble off on "anti-leftist" and other tangents, some sections are eloquent, sensible and remarkably lucid. Read it - or at least parts of it - for yourself.

The question remains: Where is technology leading? Artificial intelligence, robotics, genetic engineering, nanotechnology and other accelerating advances will change Life as we know it. Will those changes cause our downfall? Or, will the improvements and advancements that have already brought significant agricultural, medical, economic and sociological improvements continue to benefit humanity?

Click Bill Joy's famous article in Wired - Why the Future doesn't need us

Click Full text of The Unabomber's Manifesto

Click Links to Ray Kurzweil's book - The Age of Spiritual Machines

EXTROPY-5 is near!

Powerful emerging technologies such as artificial intelligence, bioengineering, super longevity and nanotechnology do have dangers as well as enormous potential for good in transforming the human condition. The Extropy Conference: Extro-5 - "Shaping Things to Come" - will take place in San Jose, CA. June 15-17, 2001. This will bring together several high-powered thinkers to examine the impact of advanced and accelerating technology, to anticipate and proactively address potential problems, to look at opportunities and to shape the future for the better.

There will be four major themes:

  • Machine Super-Intelligence - Threat or Opportunity?
  • Thriving in the Information Economy
  • Mastering the Information Explosion
  • Overcoming Resistance to Super longevity and Augmentation

Speakers at Extro-5 include inventor, entrepreneur and writer Ray Kurzweil, who will discuss his latest book: The Singularity is Near. John Smart will also be there - his website SingularityWatch.com helps people to understand and better manage accelerating change. This will be an unmatched networking opportunity for those seeking to understand and help shape the future.

Click For information & the Agenda, visit the Extropy Conference website

Click Read the précis of Ray Kurzweil's new book The Singularity is Near

Click Visit John Smart's website Singularity Watch

After the Goldrush :
Patterns of success & failure on the Internet

One of the great speculative bubbles in history - the Internet Gold Rush of the '90's - has come and gone. The financial markets have toppled mercilessly and dot.com businesses, once the darlings, have become all but a joke. Now, perhaps, it is time to make some sense of what happened, to chart a new course.

The Internet is inherently neither a disruptive nor a sustaining technology; it is instead an infrastructure technology that can be used in either a sustaining or disruptive way. For some companies, the Internet has a powerful positive effect on the way that they already make money. Such companies have a powerful advantage over new entrants as well as other companies whose ways of earning a profit are disrupted by the Internet.

Highly recommended by the irrepressible George Gilder, the Innosight Report "After the Goldrush" is written by Clayton Christensen, a professor at Harvard Business School and the author of the best-selling book "The Innovator's Dilemma". To read it on the web, you'll need to register (free) before you access the complete report - includes an executive summary and 6 chapters. After you register, you can join in an on-line discussion on the subject. Worthwhile reading!

Click Read After the Goldrush

Phil Cerasoli's poems on the web

"Writer, poet, magazine publisher, movie and drama critic, photographer, top level business manager, song writer, musician, cab driver, professional poker player, entrepreneur…all rolled up into one world-weary traveler. "

That's how my friend Phil Cerasoli describes himself. I have known Phil for half my life and have always admired his poetry and philosophy. Some of his poems are simple dittys that will amuse you. Others are strong and powerful stories, which make a point and carry a punch. I carry these poems around in my Palm Pilot and have recited them countless times to delight and challenge friends and relatives around the world.

I've put some of Phil Cerasoli's poems on the JimPinto.com website, as a tribute to the man. And, because I'd like to share them with you. Before you go off and do something else today, stop awhile and read just one - pick one from the list , and click. You'll be back for more!

Click Index of Phil Cerasoli's poems


Charles Matheny [matheny@alaweb.com] e-predicts about the economy:

    "It occurs to me that while many are surprised at the speed of contraction in the economy, no one should be. We have been working for years to apply just-in-time deliveries to the factory, all the way back to digging it out of the ground. This naturally implies that when a change (contraction in this case) occurs at the consumption end, it is almost immediately broadcast around the world. Clearly, the same effect should occur when the consumption end turns up. I vote for a V shaped recovery.”

My old friend and colleague, Tony Bowker [TonyBowker@aol.com], now retired to dream about virtual ASIC-chips, ride his Model T and tend his flock of antique cars, e-wrote:

    "Over the short term, the stock market does seem to be a popularity voting medium. Over the long term, it is a weighing scale of profit. This makes day traders the voters and we all know they are fickle, and really who cares? Extrapolating this to industry, it makes nonsense of the quarterly profit push and should make the successful CEO drive for long term growth. Maybe that's why GE and Jack Welch are still successful. On the flip side, our friends in Japan essentially follow the long-term approach, but the market does not seem to be rewarding them. Perhaps the root cause there is the banking industry and their tendency to skew the overall results."

Another old friend and colleague, Doug Bailey [jdbailey@flash.net] wrote on the subject of free online access to scientific journals:

    "I submit that you are implying that the functions of scientific journals is to, 1) enrich the publisher and 2) to restrict the flow of information. I will concede point 1 but you are clearly failing to acknowledge the primary and far more important role of the journals - that of peer review prior to publication - all the respected journals submit articles to extensive peer review prior to publication. Publication infers a certain degree of trust that the research is well done and founded on sound scientific methodology - irrespective of the conclusions.

    "Since the advent of the personal computer there has been enormous increase in the amounts of "junk science" as well as just plain bad science being done. Just note all the "Latest Reports" quoted so avidly by newspapers and radio. Much of information reported in the "Latest Studies" is not as even as good as a high school science paper.

    "When this un-reviewed information is thrown against the wall of the internet it smears like a cowpie and is just about as useful. At best it spreads silly information, biased conclusions (often for private social or economic interests) and then serves as source information for still more silly science. At worst it can be dangerous - for example the cancer cures touted by herbal medicines in the guise of "The latest medical science study".

    "I cannot advocate restriction to or censorship of the Internet but I do see a problem here - maybe you or some of your readers have some thoughts."

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