JimPinto.com - Connections for Growth & Success
No. 121 : 29 May 2003
Keeping an eye on technology futures.
Business commentary - no hidden agendas.
New attitudes, no platitudes.
- Invensys - Baan sale & pension deficit cause giant loss
- Siemens buying Honeywell IS - news re-surfaces
- Sidetracked from the war on terrorism
- The future of air travel
- The Aussie fieldbus
- More about jobs going offshore
- Reaction against the "liberal crap" label
- In favor of digital media
Invensys - Baan sale & pension deficit cause giant loss
In final year-end results announced 29 May 03, the loss at Invensys
nearly doubled to £1.44bn from £869m last year. This resulted largely
a £585m goodwill write-off related mostly to Baan and a £931m pension
fund deficit. Revenue from continuing operations fell 7.8% to £4.26bn.
Surprisingly, Invensys did NOT announce the all-but-complete £85m
($137m) sale of Baan to General Atlantic Partners, a US private equity
firm. The Baan sale comes 3 years after Baan was acquired by Allen
Yurko for £470m ($757m). Baan lost about $30m last year on sales of
about $260m and net assets, including capitalized goodwill, are about
£650m. Invensys is expected to incur a goodwill write down of £585m,
which dwarfs its £250m profit for the year.
In his report, Haythornthwaite said that the sell-offs will continue
over the next 18 to 24 months because the "gap opened up in the
pension fund" which, together with the company's debt, reduces its
flexibility and "creates the perception" that Invensys is unable to
overcome its problems. Duh!
Meanwhile, Allen Yurko (who bought Baan and started the Invensys
death-spiral) continues to operate as a heavy-weight venture
capitalist; and Lord Marshall of Knightsbridge (who colluded with
Yurko, and chaired the collapse) has retired gracelessly to his
lordly domain. And Rick Haythornthwaite (who hosted hordes of
highly-paid hangers-on to help) is now left holding the bag.
His strategy: Put on a brave face, provide results in great detail
and answer questions with even greater detail. All the while, he
looks to negotiate a good price to pave his own exit.
Invensys blames tough market for £1.4bn loss
Invensys to shock City with £1bn loss
Invensys to sell Baan to General Atlantic
Siemens & Honeywell - news re-surfaces
Once again, rumors are running hot that Siemens is buying Honeywell
Industry Solutions. This makes good sense - the acquisition would
be in the best interests of both companies.
An industry guru commented:
"I can't see any way that Honeywell can fix what they have without
a complete redesign. They are simply putting patches on their old
designs. To really move to the new world and be competitive would
take them the better part of 5 years and close to $200m (which they
will not get from David Cote, their hard-nosed CEO). And even if they
did get the budget, the technology will have moved ahead and what
they introduce in 2007-8 will again be way behind the competitors."
A Siemens observer noted:
"Siemens is ready for a big acquisition. The largest industrial
automation needs a presence in process controls, and the only two
possibilities are Foxboro (from Invensys) and Honeywell IS."
Sidetracked from the war on terrorism
The Iraqi war, far from addressing the roots of the terrorism,
has exacerbated the problems. Indeed, the easy win with no apparent
justification simply inflames the extremists. They are now even more
convinced that America's intentions are as they had feared all along -
control of oil resources and expansion of Israel's influence. This
may be far from the truth, but the extremists will never believe that.
And the roots of terrorism are fed and strengthened.
Egypt's President Hosni Mubarak gave an ominous warning, "The war in
Iraq will create hundreds of bin Ladens!" And sadly, this is perhaps
what bin Laden himself has wanted. Bin Laden had also wanted Americans
to exit Saudi Arabia; with the transfer of US headquarters to Qatar,
his wish is granted.
Now, after Iraq has been occupied, no weapons of mass destruction
have yet turned up, and any questions are quickly side-stepped. The
justification for a preemptive invasion now seems like glib, marketing
hype to justify reckless use of power.
Why were US troops needlessly put at risk? Why were thousands of
Iraqi civilians killed and injured when war was not really necessary?
How do the families of those who were killed feel about their loss
with no clear justification? Now, after the fact, it seems as though
the American public - and the world - were simply bullied into
acceptance. And now, the way the President's foreign policy is
proceeding, Iraq may not be the last war he asks the US to fight.
Did we really expect "shock and awe" to end terrorism? Far from being
greeted with garlands, most Iraqis are upset about occupation by
foreign invaders. US troops are still under fire and lives are still
being lost. Meanwhile Saddam Hussein is still missing. And Bin Laden
is still at large and apparently still in charge of Al Quaeda.
And terrorism escalates. Did we really expect any different?
The present US foreign policy is arrogant and bullying, generating
resentment even from friendly countries. Clearly, it inflames the
danger of extremist reactions. A world that rallied to support
America after 9/11, increasingly perceives America itself as the
greatest danger to peace.
Pinto article: Sidetracked from the war on terrorism
Iraq War, Unprovoked Invasion of A Sovereign Nation
The Most Dangerous Person on Earth
The future of air travel
In December 1903 the Wright brothers launched the very first
human-carrying machine into the air on its own power. Their airplane
was a biplane glider, powered by a 12 HP gasoline engine connected
to a propeller. On the first day their longest flight was 852 feet
and lasted 59 seconds.
Within a half-century, the development of jet aircraft brought
vastly improved speed and luxury. The venerable Boeing 707, the most
successful jetliner ever, made its maiden flight in 1957 and is still
in use. Natural extensions in size and range led to today’s 747 and
Airbus jetliners, carrying hundreds of people thousands of miles,
non-stop. Inexpensive air travel allowed almost anyone to travel
almost anywhere in the world within a day. The globe had become
Up to the end of the past century, the number of airline passengers
was forecasted to grow exponentially. But this was not matched by
increases in aviation capacity, which meant increasing congestion
and delays. But, in the first years of the new century, heightened
terrorist jitters and the onset of SARS have suddenly stalled the
seemingly inexorable growth pattern. Most airlines are ailing -
some are near bankruptcy.
So, what will happen now? What is the future of air travel? What are
the major air transport manufacturers - Boeing and European Airbus -
planning for the decades ahead? Bigger jumbos? Or smaller, faster
aircraft? Or, will they come up with something entirely different?
Read my new article for a summary of their strategies.
Meanwhile, futurists still think that the fantasy of a personal flying
machine is moving towards reality. Many experts suggest that safe,
dependable personal "aircars" are not only feasible, but inevitable.
A joint project between NASA and the FAA expects to outfit a
nationwide system of more than 5,000 small airports connected by
virtual "highways in the sky" for the use of small, safe, easy-to-fly,
and inexpensive aircars. NASA and the FAA expect the system to be
fully operational after about 2015.
Hey, but who knows - perhaps we'll be teleporting by then.
Read my new article - The Future of Airtravel
Beam me up, Scotty!
An aircar in every garage
The Aussie Fieldbus
This poem is written using the style of Poe's The Raven -
with a lilt similar to some of my other poems.
This poem was written on April 28, 2003 for my friend Dick Morley,
who was speaking at the INDCOMM industrial networking conference
in Melbourne, Australia, April 30 & May 1, 2003. It describes the
wonderful, new Aussiebus, which connected to just about every other
network in the world. Except....
The Aussie Fieldbus
By : Jim Pinto
28 April, 2003
Half way round the world I flew, braving jet lag, Chinese flu
To tell the Aussies what I knew, and lecture on some fieldbus lore
With shrimp on barbie on my plate, I learned to say "g’day mate",
Was ready for my Indcomm date, when I was shaken to the core
"'Tis only a mirage!" I muttered, stopping right there at their door
'Twas only this and nothing more.
Those clever Aussies had perfected, their new fieldbus was now connected
To every network, none rejected, something never seen before
It was invented here down-under, flash of brilliance, lightning, thunder
The other specs soon cast asunder, this Aussiebus was all aglow!
"How can this ever be?" I stuttered, "I can't believe this any more!
It cannot be, or can it though?"
Read the complete poem to find out what the guru Dick Morley thought
of this incredible new Australian fieldbus invention.
Poem - The Aussie Fieldbus
Bob Holland, firstname.lastname@example.org responded Jim Conoby's e-feedback
on the offshore job drain:
"I'm an optimist by nature. I once believed that with our
best-of-class universities and our Yankee ingenuity we would stay
ahead of the wealth drain of globalization. But as I sat watching
a TV story recently about the tens, even hundreds of thousands of
accounting jobs that are moving to India, something snapped in my
head. I was reminded that the notion of knowledge assets conferring
competitive advantage on private sector companies applies to whole
countries as well. We all understand "brain drain". What we're
experiencing now is more like lobotomy. We're watching as our best
minds stand in unemployment lines or struggle to make ends meet
as WalMart clerks and lawn mowing entrepreneurs.
Lawrence Gould [lsg@LSGould.com] regarding the feedback I received
about "liberal crap":
"I now believe that part of the solution is to limit the offshore
transfer of knowledge jobs. I agree with Jim Conoby that there are
just too many far-reaching negative consequences in the prospect of
millions of bright highly qualified Americans being forced to accept
low skilled, low productivity jobs. Isolationism in trade won't work,
but isolationism in knowledge just might.
"Let countries with millions of low-paid, low-skilled workers
continue to market them as their competitive advantage. But let
American companies that derive 10% of their income from, for example
India, hire at most 10% of their knowledge workers there. To counter
the resulting loss in global price competitiveness, let's make quality
and service our hallmarks. Let's be really aggressive, adopting
Gen. Nathan Bedford Forrest’s motto: "Get there firstest with
Meanwhile, let’s strengthen public education and the community
college system as stepping stones to the universities, while
creating incentives for younger Americans to put their brains
to work in building even more competitive advantage here at home."
"Jim, your "liberal crap" helps keep me sane! I find it extremely
heartening to read that somebody in the factory automation field
has the same "liberal crap" views I have, and isn't a brain-dead
The editor of the UCSD CONNECT newsletter, Brian Blazevic
[email@example.com] responded to Jake Brodsky's comments about media
distribution schemes losing viability because of price:
"The only reason why somebody would label your social commentary as
"liberal crap" is because that somebody doesn't agree with your views.
For shame: Using the label "crap" is typical of the below-the-belt,
belittling, take-no-prisoners slamming discourse of flag-waving
conservatives/Republicans who, in their narrow mindedness, seem to
forget that this great democracy was founded upon (and fought for!)
free discourse and the right to question governmental authority and
"I use that last word purposely: "processes." The concept of
incremental improvement should not apply solely to production
management, product design, and business processes. It's way past
the time that incremental improvement, preferably large increments,
be applied to the US government and society's functioning.
"But I suppose that's the sort of "crap" that's a little too much
for some "conservative" Americans to understand."
"I agree that the recording industry is one of many that are forced
to cope with the relatively new Internet reality. There aren't a
lot of good answers, but it's fascinating to watch it evolve.
"I must disagree on one point. With the new $.99 per track price of
download services, an 11-track CD will cost almost $11. Brodsky
argues that because he has to supply his own CDs, cases, and covers,
there is no benefit.
"Conversely, the benefit is extreme when one looks at digital
technology as a whole, not as a stop-over or bandaid. There is no need
to buy CDs, cases, or covers. No need at all. Listen to the MP3s on
your computer, and if it's not with you, get a $40 MP3 player, with
connection to ANY sound system. Even car stereos can be purchased
cheaply that have an upload capability for MP3s. Bring your laptop or
MP3 player to the garage and upload your favorite songs! Soon your car
will be Wi-Fi enabled, so the transfer will be wireless.
"With broadband, an entire album can be downloaded from your living
room in 15 minutes, versus the hour or two it takes to go through
snarled traffic to the music shop. And how often do you like every
track on a CD? With the Internet and MP3s, you can sample a song and
mix-and-match any track on the service. This is a revolution on par
with automatic deposit and online bill-pay, not a model that is
"I view digital technology as a complete advance, not just a faster
or more clever way to accomplish the same old thing (like making a
physical CD). Digital technology in total means that we're done with
CDs. I haven't purchased a CD in over three years. It's odd to mess
with a physical disc that has to be slid into a contraption with lots
of moving parts and laser beams. It's 20-year-old technology. We have
something much, much better.
"The general philosophy I'm talking about is the same as with digital
photography. It can actually be more expensive, and it's much more
difficult, to have the picture files transferred to 4x6 prints to show
friends and family. But we needn't do that! Bring your laptop and show
people on screen, or put them on your website for all to see.
"Bottom line: digital technology is only being used half way if we're
using it to burn our own music CDs, make printouts on 8.5x11 paper,
and convert photo files to paper. Thank goodness Internet-based flow
management systems at companies like FedEx and Dell are used for more
than printing out orders to be mailed to suppliers."
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