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JimPinto.com - Connections for Growth & Success™
No. 77 : February 19, 2002
Keeping an eye on technology futures.
Business commentary - no hidden agendas.
New attitudes, no platitudes.
Contents:
- Automation Update 2002 (3)
- Major Invensys re-organization announced
- Yurko re-surfaces
- ABB - Directors pension fiasco
- Huber-Mills identifies Danaher as a growth company
- Nanotechnology - the coming revolution
- The fully automated factory
- When the going gets tough
- How to find a new job - fast
- Save your company, save your good people
- Good book: the Invisible Future
- eFeedback:
- Clarifying Yokogawa & Johnson Controls JV
- Tyco's bout of 'Enronitis'
- Rock & Hammer or Honeyrock ?
Automation update (3)
Major Invensys re-org announced
The anxiously awaited Invensys restructuring plan was unveiled on Tuesday,
19 Feb. 2002. CEO Rick Haythornthwaite, appointed last July to revive their
fortunes, is asking investors to wait until 2006 before they see results.
The target: turning Invensys annual organic growth rate from negative to 7%
growth and improving profits from 8% now to 15% - with a 5 year wait
(2006).
Investor response: Shares slid 12%, closing at 97p.
Here is a summary of the Haythornthwaite strategy:
- Consolidation into two core divisions, Production Management and Energy
Management. Production management includes Foxboro, Wonderware, Triconex,
APV, Eurotherm and Baan. Total revenue: £1.6bn, profit 2%.
- Energy Management includes Energy Solutions, Metering Systems, Appliance
& Climate Controls and Power Systems. Total sales £2.4bn, profit 10%.
- The development division may or may not be retained, depending on offers
- includes Rail Systems, Wind Power & Power Components, total sales £0.7bn.
- Invensys' recovery is to be funded by selling off the Industrial
Components and Systems Division, including Rexnord, Flow Control, Fasco
Motors, Sensor Systems, Drive Systems, BAE Automated Systems, Energy
Storage and CompAir. Total sales £2.3bn. The strategy is based on this
raising £1.5bn.
Pinto Prognostications:
- Haythornthwaite said that "100 managers" were involved - I counted very
few, beyond Parthenon the outside "hired-guns". The rest of the company was
Haythorn-waiting. The details of how the individual divisions will
implement the strategy will follow (May 2002), presumably with local
manager involvement.
- Open house at all the companies for sale. Employees, don't feel bad -
you'll probably be better off!
- Key statement: this "recovery strategy" is worth twice what a break up
would yield - there were no significant offers-to-buy.
- Lots of praise for Emerson and Delta V, as growth & "marketing" models.
- What's left is Siebe, before the BTR merger. Lord Marshall of
Knightsbridge (who pushed the BTR merger and came with it) will be dumped.
- Haythornthwaite himself won't wait - having orchestrated the strategy,
he'll be gone before the year is out.....
UK Financial Times: Invensys plans to slim down
UK FinancialTimes: Long wait for Invensys to bear fruit
Allen Yurko re-surfaces
The former Invensys CEO, the very same one that drove the company into
virtual bankruptcy, has now re-surfaced at Compass Partners, a private
equity and investment banking "boutique". His assignment is to look for
potential acquisition targets - hmmmm....
The UK Sunday Telegraph reports that Yurko quit Invensys without any
severance pay; it did not mention his handsome pension payment, which he
had arranged to become fully vested by the age of 50 (about a month after
he had made the "arrangement"). Yurko left Invensys at the end of January
(presumably with full pay up to that time) - and a couple of weeks later,
he turns up at Compass.
Yurko had told friends that he was going off to play golf, and was "wooed"
to join Compass by Paul Soldatos of Compass, evidently on the golf course.
Apparently Mr. Soldatos had not read the UK newspapers when they reported
the mess that Yurko had caused at Invensys.
The newspaper report goes on to say that "Compass is keen to capitalize on
Yurko's deal-making experience. He masterminded the £9.4bn takeover of BTR
by Siebe to create Invensys and was responsible for many of the smaller
deals that enabled Siebe to grow." Nowhere is it mentioned that BTR Siebe
had turned sour under Yurko's direction, with a plunge to less than 10% of
its former value.
One former Yurko confidante whispered in my e-ear that Yurko had used his
pension payments to "buy" a Compass partnership. What happens is - you put
some money into the "private equity" fund and become a "partner".
Now, wouldn't it be funny if Yurko uses Compass' money to finance purchase
of Baan, or a bankrupt Invensys? That would indeed merit a Pinto poem. Stay
tuned...
UK Sunday Telegraph - Yurko joins the stampede into private equity
Compass Partners website
ABB Directors' pension fiasco
The latest victim of Enronitis may be ABB, now in the midst of an ugly
public dispute with ex-CEO and Chairman Percy Barnevik, once considered the
Jack Welch of Europe. ABB's board of directors said it would press Barnevik
to pay back some of the $80 million pension benefits he received after his
resignation as CEO in 1996 (he stayed on as chairman until 2001). ABB is
also pushing Goran Lindahl, Barnevik's successor who stepped down as CEO in
2000, to pay back some benefits.
After several quarters of disappointing performance, problems seem to be
piling up at ABB. The company had once prided itself on using US-style
multi-nationalism to become a model European business. This past week (Feb.
13 2002), a top-level feud became public, even as ABB announced an
additional $1.4b in write-downs after taking a charge of nearly $500m just
a few months ago.
UK Independent: ABB demands Barnevik pay back part of pension
Business Week: Huge tremors at Swiss giant
Huber-Mills identifies Danaher as a growth company
Lest we dwell too much on industrial-controls companies that are bumbling
and stumbling, let's look at one leader that is doing well - Danaher.
Danaher (DHR)- $4b sales, market-cap $ 9.5b, is currently trading near its
52-week high. 1/3 of Danaher is tied up in things like hand-tools, which it
sells to Sears, while the other 2/3 are generally categorized as
"industrial controls".
The well-respected Huber-Mills Digital Power Report (an affiliate of George
Gilder) highlights Danaher as "a central player in the emerging industrial
universe of digital motion". According to Huber-Mills, the blandness of the
"industrial controls" label obscures the technological revolution unfolding
beneath.
Danaher is now moving rapidly into the transportation sector, the universe
of electrically powered motion, which is now changing in truly fundamental
ways. This is a new universe of digital, electro-motive transducers and
actuators that will propel the next great productivity boom in the US
economy. This is technology that moves "stuff", not information. Electronic
motion control brings quantum leaps in flexibility, precision, efficiency
and reliability to applications as diverse as robots, wheelchairs,
life-trucks and packaging machines.
Danaher website
Huber-Mills Digital Power Report
When the going gets tough
Now it's happened to you. After umpteen years working there, you have been
laid off. Let go. Sacked.
You knew it might happen, but you didn't really think it would happen to
you. Maybe this isn't the first time. Maybe you've been whacked before.
You still didn't think it would happen to you. Not again. You've worked
overtime. You've worked nights and weekends. You busted your hump for
that job. For what?
Okay, take a deep breath, and start the next part of your life.
Thus starts this excellent article by my friend and marketing sage Walt
Boyes. Whether you need it right now, or not, read it!
Walt Boyes: How to find a new job - fast
Now, let's look at the employer's side - the decision-making process that
good managers must go through to serve the best interests of the company.
Whether you're a supervisor, a department or general manager, a vice
president, or a CEO, if you have people working directly for you, you're in
the hot seat.
When your company does not meet projections, the simple decisions come
first: Cut out frills and all unnecessary expenses. But if the decline
continues - if growth becomes shrinkage and profit becomes loss - then some
really tough decisions come front and center. This is where good judgment
is crucial.
Find your keepers, and keep them at all costs. Your company will benefit
through good work and loyalty. Work hard for your best people, and they'll
work hard for you.
Pinto InTech article: Save your company - save your good people
Nanotech - the coming revolution
Nanotechnology - manipulating matter at the atomic scale - is the next big
revolution, an "inflection point" which will change everything! It is
developing to the extent that practical applications are coming within the
next few years, and certainly with the next decade.
As Nanotechnology advances into practicality, achievements transcend and
unite such diverse sciences as physics, chemistry, biology and even
computer science. Self-assembly and programmable medicine promise to
transform entire industries. At this early stage, what separates promise
from hype? Find out in MIT Tech Review’s Focus of the Week.
MIT Technology Review - Nanotechnology Focus
Nature: Carbon nanotubes assemble themselves into electronic grids
Fullyautomated factories - futuristic? Or today's reality?
The promise of remote-controlled automation is finally making headway in
automated factories and processes. The vision of powerful super-robots
without people to tend them required networked intelligence. This is now
well developed and widely available. Fully automated factories are quickly
becoming an accepted fact.
AutomationTechnies.com, Feb. 2002 Fully Automated Factories
Good book: The Invisible Future
The Invisibe Future - The seamless integration of technology into everyday
life. Essays, edited by Peter J. Denning (Pub. Oct. 2001)
Leading visionaries discuss the future of information technology - how will
E-commerce and E-consumers interact in 2020? What will the relationship
between man and machine, man and information, and information and machine
mean for future generations? Elite group of 17 business and academic
leaders answers these and other strategically critical questions. Includes
never-before published essays by: Rodney Brooks, Michael Dertouzos, Alan
Kay, Ray Kurzweil, Bob Metcalfe and more.
Easy, entertaining and worthwhile - read it!
Look at "The Invisible Future":
eFeedback
Following my comments (eNews 7 Feb 2002) on Johnson Controls buying the
Johnson-Yokogawa Joint Venture, Wayne Lukehart
[Wayne.Lukehart@EmersonProcess.com] provided this clarification:
"The Johnson-Yokogawa JV in the US (separate JV from the one in Japan) was
dissolved several years ago with Yokogawa buying out Johnson. The news
referenced is only for the Yokogawa-Johnson joint venture in Japan with
Johnson buying out Yokogawa."
Regarding Tyco's recent bout of 'Enronitis', Mike Willey
[mwilley@gfgroup.net] comments:
"I lived in New Hampshire in a neighborhood with several of the Tyco execs
back in the early 1990's. They were always very aggressive people. Later,
as a Division President for Emerson Electric, I could never understand how
any of the Tyco execs could really know their consolidated financial state.
With continual acquisitions being integrated into the company, there was
never any time when the financials would have been stable enough to really
know what is going on. As in most of these cases, when business is booming
it can hide a lot of bad decisions/transactions. These issues have now come
home to roost."
I've been having a lot of feedback on the activities brewing around a
Rockwell & Eaton (Cutler-Hammer) merger - with no denails of any kind from
either Rockwell or Eaton management. Bob Nickels,
[bob.nickels@honeywell.com]came up with a cute name :
"Say - do you REALLY think there is anything between A-B and C-H? I kinda
like the new name possibilities - 'Rock and Hammer' maybe?"
Amusingly enough, the earlier talk of a combination of Honeywell with
Rockwell brought up the possibility of 'Honeyrock'.
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