JimPinto.com - Connections for Growth & Success
No. 101 : October 20, 2002
Keeping an eye on technology futures.
Business commentary - no hidden agendas.
New attitudes, no platitudes.
- Honeywell cutbacks, brags about offshore mfg. & engineering
- Rockwell wave of layoffs
- Roomba - the room-cleaning robot
- Perry Marshall interview with Jim Pinto
- "Soft Solutions" an age old message
- More on human lifespan
- Eurotherm - Peter & RePeter; Barnhouse & Yurko
George Gilders' Chinacosm
It's clear to many people today that China is poised to take over
the world's manufacturing. In China today, some 18 million people
enter the work force each year, with typical wages of 60c. a day.
Manufacturing workers outside of China are being displaced on
a large scale; even Mexico is losing jobs to China.
The idea that Chinese workers are replacing physical laborers
elsewhere has long been a given. But now China is poised to
replace the world's knowledge workers as well. China is turning
out 700,000 engineers a year, 37% of all college graduates, all
trained in a university system that is rapidly growing in size
and quality. Engineer pay ranges from $4,000 to $8,000 a year,
plus medical costs, housing and pension. As product design
becomes more network-centric and less location-dependent,
competition against Western engineers will turn fierce.
According to techno-visionary George Gilder, the 80s was the
decade of the Microcosm, when rapid advancements in
microprocessor technology propelled the US economy; the 90s
was the decade of the Telecosm, when high-speed fiber-optic
communication channels generated growth markets around the
world. Now, says Gilder, a fast-rising China is emerging as a
technological powerhouse, with deep and serious implications
for the US and world economies.
During a recent visit to China, Gilder was most impressed with
the high-pitched level of capitalistic energy he found there.
Typically unable to restrain his enthusiasm, Gilder launches into
hyperbole when he describes China as "in fact the greatest
opportunity in the history of capitalism". As if that weren't
enough, he heaps hyperbolic great praise on Communist Party
chief Jiang Zemin. "In Washington, Jiang is considered a
dangerous Communist," Gilder says. But no. "Jiang is the single
greatest capitalist leader of the postwar generation."
Get ready for Chinacosm
Honeywell transition to offshore Manufacturing & Engineering
Honeywell has just had a new round of layoffs, caused at least
partly by the migration of manufacturing and design services
to offshore locations - the Indiacosm and Chinacosm trends.
A knowledgeable Honeywell insider weblogged this report on the
recent "town-hall" meeting in Phoenix, attended by David Cote,
CEO, Kevin Gilligan, ACS Chief, and Jack Bolick, the new head
of Industry Solutions.
"David Cote's most recent town Hall meeting (17 Oct. 02) was the
standard "we must suffer now to make us stronger in the future"
type of drivel.
Traffic on the Honeywell weblog was higher than ever,
yielding significant insights and feedback from several
Honeywell insiders. Read some of the latest comments and
provide your own feedback.
"Cote emphasized the importance of setting up shop in China
(which was perceived by many as to mean "continued outsourcing").
And then he bragged about the "world-class" capabilities of India
and that they have ranked on a scale from 1-5 as a strong 5 for
the last 4-years in the software arena (again viewed as more
outsourcing). In fact, the remaining continuing engineering
responsibility is scheduled to complete transition to India
by Nov. 02.
"On the subject of Kevin Gilligan, methinks he doth protest too
much. Constant denials about claims of being "for sale"; very
much troubled by Pinto's prognostications - to the point of
having access to the JimPinto.com web-site terminated and
issuing an e-mail which warns that any reproduction/republication
of internal company news is now deemed by the "lawyers" as a
violation of company policy which may include termination of
"Question: Just how many employees can view internal news
articles before it is legally considered as public domain?
We might just have to test that theory.
"During Cote's song and dance session, Jack Bolick chose to sit
right in the midst of the "factory worker" section - and they
loved him for it! Playing the "I am just like one of you" role
and coupled with his good 'ol boy North Carolina accent appears
to be sucking in many new supporters. Jack has not been there
long enough for anybody to gage his intentions and direction
for the business. As they have all done prior to him, he too
will soon be off on the Grand World Tour to meet with location
heads around the world. One can only hope that he spends as much
time listening to customers as he will to those who will tell
him exactly what he wants to hear."
Other JimPinto.com weblogs
Honeywell posted a modest third-quarter profit as stringent
cost-cutting (including broad employee reductions) offset
Honeywell Posts Profit, Warns of Job Cuts
Rockwell - wave of layoffs
About 2 weeks ago (Oct. 03, 02) an ominous message on the
JimPinto.com weblog warned:
"Next week Rockwell Automation will be announcing the largest lay off in the history
of the company."
And then this week, another weblog message confirmed:
"The Axe falls again! In yet another wave of RIF's, Rockwell
Automation HR is touring the country with a briefcase full of
pink slips and out-placement brochures. Beginning with field
offices on the east coast, the Rockwell hit squad travels west.
Left in their wake are RA employees, both current and former.
Former employees wonder what happened? Current employees
wonder what's next? Everywhere there is despair."
Another Rockwell Automation insider reported:
"At the Mequon,WI plant, Rockwell Automation began layoffs this
week. They have moved their drives division to their Richland
Center, WI. and Sumner, IA facilities. They will discontinue all
manufacturing in Mequon, and when the lease is up on their
facility there, move all office personnel to headquarters in
Milwaukee. Manufacturing operations will move from urban plants
to plants in rural areas. Production costs are significantly
lower in these areas. You will be seeing Rockwell leave any
facility that is leased, and move all product to company owned
facilities. All leased office space in the Milwaukee area
will also be abandoned and you will see consolidation in the
headquarters building. Rockwell has already begun moving some
manufacturing to China, Mexico, and Brazil. I think you can
look for this trend to accelerate in the immediate future
due to the lower cost of doing business in these countries.
To most Rockwell employees, Don Davis represents the
Allen-Bradley old guard, simply remembering what it was like
when A-B was enjoying itís glory days. The concern is that
he's coasting, awaiting retirement, and out of touch with the
people and the times. Most people have the opinion that
Controls President Keith Nosbusch is a puppet; Davis pulls
"Rockwell is taking a close look at all their US plants and will
consolidate manufacturing operations in cases of redundancy.
They will also take a look at productivity, labor costs, and
payroll burden. They will close plants, and initiate layoffs in
order to fine-tune their profitability."
Ron Wichter is Senior VP GMS (Global Manufacturing Solutions
Group) reporting to Nosbusch. Wichter comes from Compaq and
doesn't understand the nature of the business; his attempts
to develop GMS have been unsuccessful. GMS staff reductions
of 70% have occurred, and paralysis seems to be creeping in
because of inability to convert the GMS vision into action
on a global basis.
The RIFs on Tuesday resulted in the loss of more key people,
still uncounted. Remember the RIF rules?
Most Rockwell insiders feel that the fat has been trimmed long ago; now
they're cutting muscle, bone and limbs.
- 1st. cut - Liposuction
- 2nd. cut - Amputation
- 3rd. cut - Dismemberment
One long-term employee moaned, "Tuesday was the saddest day
I've ever spent at RA/A-B next to 9/11/01. Those of us who remain
are numb, just waiting our turn to process out. The bean counters
run the show; all they care about is the numbers."
The question with much of Rockwell's business is not the cost.
Cost is very important, but Rockwell is late doing this. The real
question is: what good is cost effectiveness with the wrong
market, the wrong product and the wrong channel?
The Rockwell distribution channel is much too expensive, they are
distant from their customers (the two things being related) and
their primary offering is in a vanishing segment of the business.
A PLC by itself delivers little value today, since it is not
complete in meeting the customersí measurement, data management,
automation, optimization, data presentation, communication and
At one senior management meeting, Don Davis suggested that
he's looking for a share price that didn't start with a 2 (he
meant over $30). He got his wish; the stock is now down about $16.
At this point, acquisition is probably a good thing. It is time
for new management and a fresh perspective. Rockwell's future rest
in the hands of the next owner.
Rockwell revised earnings outlook
Rockwell weblog - read the thread, provide your own feedback
Other JimPinto.com weblogs
Roomba - the room-cleaning robot
Tracking the arrival of practical robots has long been my hobby.
I'm one of those who believe that recent technology advances
will result, sooner or later, in practical, everyday robots.
I've used the Kreepy Krauly for years - invented in S. Africa,
this pool suction sweeper moves around in random patterns
to keep most swimming pools pretty clean. Is this a robot?
For a few thousand dollars, anyone could probably build a robot
that can clean floors, going around furniture and not getting
stuck in corners. But, at that price, the market is limited
- few people are interested beyond the novelty.
Just last month, iRobot unveiled an inexpensive robot that cleans
most rooms. Called Roomba, the robot is a little battery-powered
vacuum cleaner that scurries around the floor, sweeping up dust
and dirt as it travels. And instead of costing thousands, Roomba
costs just $199.
Detroit has been using robots to build cars for four decades.
Roomba is the first device to bring the laborsaving promise of
robotics into the home. While Sonyís Aibo and similar toys
proved that consumers want robots, Roomba may be the first
that they actually need.
Roomba isnít just for show. It does a good job on the daily chore
of sweeping or vacuuming the average home. It picks up dust
bunnies, dirt tracked in from the street, spilled rice and coffee
grounds, loose beads, and most other objects that are smaller
than an acorn. It gently avoids furniture, it doesnít fall down
stairs, and it runs up to 90 minutes on a single battery charge
- enough time for it to clean two 16 by 20 foot rooms. This
machine is not a gimmick: it gets floors clean.
To use the Roomba, you put it on the floor, turn it on, and press
the button marked S, M or L (depending on your room size) to
adjust the parameters of the walk and determine how long the machine
runs before it decides that it is finished. The robot plays a little
tune and starts sweeping the floor in an ever-widening spiral -
essentially, the machine sweeps in crop circles. When it bumps into
something, it backs up, turns, and starts off in a new direction.
Periodically Roomba alternates this behavior with a wall and
furniture-hugging algorithm and straight lines across. It will also
randomly turn and drive as far as it can until it hits something.
Being a robot, Roomba doesnít think like a human being, and it
doesnít clean like one either. It may drive underneath beds,
sweeping up dust that regular housecleaners may ignore. On the
other hand, itís easy for Roomba to get tangled in power cords,
long shoelaces, or even socks; when it jams up you have to turn
the machine over and manually extract whatever is stuck.
Computer scientists call the Roombaís behavior a "random walk".
The big advantage of this approach is that the Roomba doesn't
need to map out your living room and then keep track of where
itís been. Roombaís walk isnít guaranteed to cover an entire
floor, but in practice it does a very good job. Just like the
Kreepy Krauly in my pool at home.
Perry Marshall interview with Jim Pinto
A lot of people keep asking what I'm up to after my "retirement".
What are the reasons for my involvement with the JimPinto.com
website? What are my primary interests? Why am I still involved
with Industrial Automation? Why do I publish eNews? How many
people are signed up for the eNews list? Where do I get all this
The talented marketing consultant Perry Marshall asked me all
these questions, and more - my 30+ years as founder of Action
Instruments, my views on the direction of the industrial controls
business, my projections about future technologies that will make
our lives better, and where I feel our world is headed in the
The resulting "interview" has been published by Contemporary
Controls in their Oct. 02 newsletter, and is now on their
website. The interview is also on the JimPinto.com website.
Go take a look.
Perry Marshall interview with Jim Pinto
Jim Pinto Interview
Hassan M.Ahmad AL-Kandari [HMAHMAD@kockw.com] from
Kuwait Oil Co., Kuwait, wrote :
"I would like to say that I appreciate your futurist thinking.
Why? Because you view the world in a way that motivate others
to think about the benefits of the whole. Your "soft solutions"
is the message of all the prophets and the remarkable figures
Still on the subject of human lifespan, Dr. Ted Mohns
"The data I'm aware of regarding the effects of weight suggest
no excess mortality for mild degrees of overweight but then
rapidly mounting excess mortality for overweight beyond that.
On the other hand, significant prolongation of lifespan beyond
the norm, in the animal models I've seen reported, seems to
require being seriously underweight, i.e. by 15% or more relative
to the norm for the species studied. Americans have a long way
to go, on average, just to reach the worldwide norm for homo sap.
Several people appreciated the case history of Action Instruments
after acquisition by Eurotherm and then Invensys. I got a lot of
feedback that my comments on Eurotherm people were "right on".
"Studies of two reported pockets of extraordinary longevity
(hill people in the Andes and an area in the Georgia section
of Russia) have acknowledged the problem of inbreeding/genetics
as a confounding variable, but seem to point to the following
as significant contributors to longevity: (1) daily physical
exercise and routine physical work, and (2) aged people in these
groups have a revered and active role as sources of knowledge
and wisdom for their community. Our culture obviously doesn't
do well with either of these."
Several Eurotherm insiders reminded me that Peter Wade and his
yes-man Peter Tompkins were referred to as Peter and RePeter.
Current Eurotherm people report that, since Peter Wade has
departed, RePeter Tompkins doesn't really know what to repeat.
So he has simply become RePorter Tompkins.
A long-term Eurotherm insider feels that Allen Yurko and Dan
Barnhouse deserved each other:
"Peter Wade was, as you say, a competent technical manager.
He did some good things at Drives and was a great guy to work
with. When Claes Hultman came along, it seemed that Peter felt
he had to play along and his management effectiveness (and even
his personality) went downhill. The move to Eurotherm Controls
was the beginning of the end.
"The acquisition of SAS (Dan Barnhouse's system integration
business) by Eurotherm Drives in 1995 was driven mainly by the
desire of most of the US management team to move from Reston, VA.
to Charlotte, NC. Eurotherm paid too much for SAS and aspects of
that business, discovered after the sale, made it an even worse
"Dan Barnhouse and Allen Yurko seem like two brothers, both using
deception and manipulation to further their goals rather than
good, honest work. Dan forced out many good people from
Eurotherm Drives during his unscrupulous march to the top and
so destroyed the culture - the place is now full of lackeys and
the corporate motto has become "Dan's way or the highway".
"What a waste of a once great company!"
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