JimPinto.com - Connections for Growth & Success
No. 98 : September 15, 2002
Keeping an eye on technology futures.
Business commentary - no hidden agendas.
New attitudes, no platitudes.
- Artificial Intelligence - hype or revolution?
- The scientific search for human longevity
- Automation : ABB - Centerman out, Dormann pushes re-structure
- GE's Jack Welch - fall of an icon
- New age corporate & investment acronyms
- What JimPinto.com is doing for the automation industry
- eBooks vs. trade publications
- More weblogs please!
Artificial Intelligence - hype or revolution?
A spate of books that describe AI breakthroughs are out,
or due shortly.
Bill Joy, Sun Microsystems' chief scientist, who wrote in Wired
magazine about a future in which robots are the dominant form of
life on earth, has a book in preparation. Jeff Hawkins, cofounder
of Handspring, the PDA manufacturer, is working on a book about
widespread AI; Tom Mitchell, professor of AI at Carnegie Mellon
University is about to present his vision of the future.
AI pioneer and entrepreneur Ray Kurzweil is working on his book,
"The Singularity Is Near" a sequel to his previous best-seller,
"The Age of Spiritual Machines: When Computers Exceed Human
Intelligence" (see hotlink below).
Rodney Brooks is director of MIT's AI Lab; his new book -
"Flesh and Machines: How Robots Will Change Us " - promises
that machines will have emotions, desires, fears, loves and
pride (see hotlink below).
These gurus clearly believe that AI is on the brink of a major
comeback. They're predicting that personal robotic servants,
computers that can program themselves, and robots that cost
a fraction of a human worker - all within the next 20 years.
An Israeli company Ai Research was recently funded with $4m to
create a new form of life with 'Virtual Children' using technology
that allows everyday language communication with computers.
San Francisco-based startup Emergent Minds is applying for
government funding in an attempt to build neural networks that
can learn and grow like living beings, with amazing commercial
A recent RedHerring magazine article pooh-poohs all this as hype.
In this essay, Geoffrey James insists that AI is a "technological
backwater" and the business prospects simply don't add up. He
scoffs that AI has been coming since the '60s and the AI dreams
- and business opportunities - are likely to remain more science
fiction than science fact.
But, the AI pundits continue to predict that generalized AI will be
achieved within 20 years. The brilliant and irrepressible Ray Kurzweil
debunks RedHerring eloquently with his own arguments. It will always
be easy to scoff at AI as long as there are tasks at which humans are
better, but the many derivatives of AI research are becoming
increasingly vital to our economy and civilization.
Virtually every industry extensively uses intelligent algorithms,
the trend now is that the "narrowness" of the intelligence of AI
systems is becoming less narrow, with many applications beginning
to combine multiple methodologies. "Strong AI" represents the
culmination of these ongoing and accelerating trends.
The Web site Longbets.org has published 11 bets to sharpen
long-term thinking on issues of social or scientific significance.
The biggest bet (so far): $10,000. Ray Kurzweil bets Mitchell
Kapor, the founder of Lotus Development, that a computer or
'machine intelligence' will pass the Turing test (be able to
successfully impersonate a human) by 2029.
RedHerring - Out of their minds
Ray Kurzweil - RedHerring has a myopic perspective on AI
Long Bets - Accountable predictions
SF Based AI startup - Emergent Minds
Ray Kurzweil: The Age of Spiritual Machines
Rodney Brooks - Flesh & Machines: How robots will change us
The scientific search for human longevity
The first longevity revolution occurred in the early 20th century,
as infant mortality declined and infectious diseases were conquered.
More people now enjoy the opportunity to become old. Today we are
at the cusp of the second longevity revolution, the actual
postponement of old age.
What is aging? My friend who is 80-something described it this way,
"I feel like a young man in constant poor health." Aging is
accompanied by lots of simultaneous changes - graying hair, thinning
bones, weakening muscles, failing immune systems. So far, researchers
have not figured out whether those changes are aging itself or just
symptoms of some more general process of decay.
Average human life expectancy has been increasing at 2 1/2 years
per decade for the last 150 years. Today it is about 76 years.
At this rate, it will reach 100 in six decades. But, most scientists
agree that major advances will cause 20- to 40-year jumps in
longevity to occur in this century.
Two years ago, Aubrey de Grey wrote in the British Sunday Times,
"A dramatic increase in lifespan is inevitable. It's an engineering
project now, not a scientific one."
The defining political conflict of the 21st century will be the battle
over life and death. On one side there are those who counsel humanity
to quietly accept our morbid fate and go gently. On the other side are
those who yearn to extend the enjoyment of healthy life to as many as
possible for as long as possible.
Read this excellent and well-written article by Ronald Bailey.
Forever Young - The new scientific search for immortality
Stephen Austad's book - Why we age: what science is discovering
ABB: Centerman out - Dormann pushes re-structure
Last week, (just after I had clicked the latest eNews out into
cyberspace) ABB surprised everyone when it replaced CEO Joergen
Centerman with Chairman Juergen Dormann. Why Centerman made an
abrupt departure was not disclosed - Dormann insisted that the
reasons were "pretty complex".
One ABB insider shrugged, "The Swedish social-experiment called
ABB has failed. I still wince at the thought of all the
management-concept discussions that we had to suffer through."
ABB is still in the throes of a restructuring phase which is
expected to cost $ 500 million and was started last year. This
has cut 12,000 jobs and supposedly streamlined operations,
aiming to give the company a consumer-oriented strategy.
The revamping was expected to be finished in December.
Under Dormann, ABB's disposal/restructuring program will pick up
speed. For years ABB has tried to help their products & services
by providing financing (to customers who don't have the capital),
while also doing a value-add based on that financing. When a
sizable order was placed with ABB, the typical follow-up question
was, "would you like financing with that?" (ala the McDonald's
mantra; "would you like fries with that?").
But ABB is NOT a bank, and over the past few years they've clearly
demonstrated this by losing their shirts. Also, auditors are
beginning to look more closely at "creative financing packages".
Jurgen Dormann has a long and successful history of shedding
non-core business elements. ABB's financing arm fit this category,
so it was sold to GE for $2.3b as part of an effort to shrink
the hole in the ABB balance sheet; the cash inflow will reduce
debt of $5.2b to $ 2.9b. Next up will be the Oil, Gas & PetroChem
Mr. Dormann said the company is on track to dispose of its
Building Systems unit and real estate in Switzerland. But ABB
isn't considering selling any large units or even whole
divisions in addition to that.
Centerman was always in over his head and he couldn't pull
off the turn-around that was expected. The general impression
is that Dormann is straight forward and very results-oriented.
He'll quickly get rid of ABB's old matrix structure and
Byzantine-like organization. The management survivors had
better get their acts together, and fast - or Dormann will
eat them for lunch.
ABB Appoints Chairman Dormann as New Chief Executive
ABB's New CEO Dormann Wants to Accelerate Restructuring Process
GE's Jack Welch - fall of an icon
The business icon that was Jack Welch has fallen. A messy personal
life has exposed the plush post-retirement perks he enjoys and most
people, even CEOs, are appalled.
On Dec. 20, 1996, Jack Welch settled on his post-retirement
consulting agreement with GE. It included a salary of $86,000 for
his first 30 days of consulting work and $17,000 for every day
thereafter. Also in the agreement were provisions for access to
aircrafts, cars, offices, apartments and financial planning services.
Further, GE agreed to reimburse him for "reasonable travel and
living expenses" which he incurs because of his position as
retired chairman of the board and chief executive.
For Jack, this agreement looked wonderful. After a year, it's still
impossible to separate the man from the company - so, everything is
a retirement expense. It was fine too for Welch's wife, Jane
- before Suzy that is.
After a 13-year marriage, following the revelation of Jack's affair
with former HBR editor Suzy Wetlaufer, the Welches are getting a
divorce. In court Jane, the woman scorned, disclosed details of
the expenses covered by GE during Jack's employment and after.
They include tickets for the New York Knicks, the US Open and
Wimbledon tennis tournaments, Yankees and Red Sox games and other
leisure activities. GE also picks up all costs associated with
Jack's NY apartment, $80,000-a-month, plus wine and food,
laundry, toiletries and newspapers.
Most people are surprised, and even shocked, that GE failed to
disclose the extent of Jack's perks. The lavish pay packages and
extras for recently ousted corporate bigwigs - Dennis Kozslowski
of Tyco, Bernie Ebbers of WorldCom, and others are now being held
up as gross improprieties. Unfortunately for GE, the details of
Jack's golden handshake came out in a courtroom, and not
Jack Welch has descended from America's loftiest executive perch
directly into tabloid hell. On Sept. 7, the one-year anniversary
of his retirement, the front page of the New York Daily News
featured his smiling mugshot under the headline: "Greed!"
Jack Welch, once crowned the "Manager of the Century," has
become a target of resentment and revisionism.
Jack's response to the flap over his perks is, in essence: I deserve
them. "During my full tenure," he boasted, "GE's market capitalization
increased by $400 billion, with shareowners, employees, retirees, and
the like benefiting greatly." Of course, he was first in line on
payday, retiring with $880 million in GE shares.
It's a pity the icon that was Jack Welch had to shatter this way.
GE Should Have Revealed Welch's Deal
Jack Welch: Fall of an Icon
New Age corporate and investment acronyms
From my friend Dr. Ted Mohns, who seems to have a knack for coming
up with this kind of thing:
- CEO: chief embezzlement officer.
- CFO: corporate fraud officer.
- P/E: parole entitlement.
- EPS: eventual prison sentence.
- BULL MARKET: A random market movement causing an investor to mistake himself for a financial genius.
- BEAR MARKET: A 6 to 18-month period when the kids get no allowance,
the wife gets no jewelry, and the husband gets no sex.
- MOMENTUM INVESTING: The fine art of buying high and selling low.
- VALUE INVESTING: The art of buying low and selling lower.
- P/E RATIO: The percentage of investors wetting their pants
as the market keeps crashing.
- BUY, BUY: A flight attendant making market recommendations as you step off the plane.
- STANDARD&POOR: Your life in a nutshell.
- STOCK ANALYST: Idiot who just downgraded your stock.
- FINANCIAL PLANNER: A guy who actually remembers his wallet when he runs to the 7-11 for toilet paper and cigarettes.
- MARKET CORRECTION: The day after you buy stocks.
- CASH FLOW: The movement your money makes as it disappears down the toilet.
- WINDOWS 2000: What you jump out of when you're the sucker that bought Yahoo @ $240 per share.
- YAHOO: What you yell after selling it to some poor sucker for $240 per share.
- INSTITUTIONAL INVESTOR: Someone who has owned equities for the last two years and who's now locked up long-term in a hospital
- PROFIT: Religious guy who talks to God
Roy Slavin [firstname.lastname@example.org] ex-CEO of Wonderware, Siemens
Industrial Automation and other prominent US automation companies,
"Jim, you are really doing a service for what's left of the
industrial automation industry. Your analysis of most issues is
compelling. I worked in the industry for 30 years and have watched
with utter despair as dynamic, creative, entrepreneurial-based
companies have been gobbled up and destroyed by large, clueless
corporate entities. The destruction of those companies lays bare
the idiotic notion of 'creative destruction'. We both know lots
of good knowledgeable people who have been 'down-sized' because
the people who run those companies have no idea what they are doing.
Robert M. Greenfield [email@example.com] wrote about my
discussion on eBooks :
"I think your site gives many people a place to vent. You pay more
attention to them than their own managers. You probably know more
about their business than their own managers - which touches the
core issue. Most of the people who manage these companies know
nothing about the product, customers, industry, or even fundamental
technology. The clueless CEO's are hired by Boards who know even
less. It is truly the blind leading the blind.
"By far the worst group of idiots in the industry are at Invensys and
Tyco. They have done more to destroy the industry than all the others
combined. Did you know that Allen 'Jerko' and Dennis 'Kos-liar-ski'
started their careers at the same company where they learned their
financial engineering skills? The 'real', behind-the -scenes story
of the BTR merger and Baan acquisition has never been told - it is
too unbelievable. The utter destruction of AMP, Potter and Brumfield
(Siemens electro-mechanical group), et al that were captured by
Tyco is sinful. Unfettered greed and ego is frightening and
sickening to behold.
"Almost every person working at those companies HATE management.
They have endured endless cost cuttings, endless reorganizations,
endless consultants, endless crap. The only thing they haven't
had is good management: leaders who know something about the
products, industry, technology. What are the people who are
stuck in those companies to do? The only practical solution
is to simply stop caring. How sad.
"I was told that Invensys is conducting an 'internal investigation'
to discover who is 'leaking information to the outside'. I assume
this means YOU since the other analysts in the industry wouldn't
have the balls to repeat it.
"Good luck. Keep at it."
"What do you think is the likelihood of engineers adopting
digital trade magazines any time soon?
John Petzen [John.Petzen@Harrisgroup.com] wrote:
"The trade magazine publishers are deeply suffering as a result of
severe cutbacks in advertising pages and rising printing and mailing
costs. I've noticed that some formerly free magazines are now charging
nominal fees ($15/yr). Others are testing digital magazines.
"If magazines like InTech, Control Engineering, Control, Control
Solutions, and IAN get any skinnier, they won't even be worth reading.
And I don't see advertisers tolerating another price hike. Of course,
a little trimming of the herd might make the survivors a lot
"But, I still see the day coming very soon, when engineers will face
a choice of free digital magazines or paying for printed copies.
Which do you think they'll choose?"
"You seem to have all the bases covered on weblogs and discussions
devoted to various industry players who are in trouble in some
fashion. I find it interesting that you don't have an Emerson weblog.
Is there a reason for their omission? Surely the DeltaV control
platform has created at least a ripple on the radar screen."
Pinto response: Yes, others too have requested weblogs on ABB, Emerson, Schneider
and others. I'll get to these soon.
If any of you would like to get started with some weblog comments on
these companies, or on other topics, please email: firstname.lastname@example.org
Meantime, the traffic on Honeywell, Siemens and Invensys weblogs
is flowing hot and heavy. Please note, I am moderator and reserve
editorial rights - I do not include obviously wrong comments.
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