|
JimPinto.com - Connections for Growth & Success™
No. 50 : July 3, 2001
Business commentary - no hidden agenda.
New attitudes, no platitudes.
Stay e-tuned....
Happy July 4 holiday, for Americans everywhere!
All you others - work, work, work !
Contents:
- Rockwell Automation
- Collins spins off
- Eaton merger possibility
- CEO Boondoggle: $ 300K Ryder-cup golf tour
- Invensys in decline - Marshall's involvement
- Honeywell lowers price - GE rejects offer - merger finally off
- Book: Affluenza - all consuming epidemic
- Charity - where does it begin - and end?
- eFeedback :
- Loss of culture in acquired companies that are jerked around
- Manufacturing in a box
- Stop saying e-everything
Rockwell Collins spin-off occurs : Automation decline continues
On June 29, 2001, approximately 183 million shares of common stock were
distributed in a tax-free spin-off to Rockwell International shareholders
on a one-for-one basis. These shares represent all the outstanding shares
of Rockwell Collins common stock, and Rockwell International has no
continuing ownership in its former wholly-owned subsidiary.
Rockwell International became Rockwell Automation, a stand-alone $4.3
billion company focused on industrial automation, continuing trading with
the ticker symbol: ROK. Rockwell Collins, the aviation electronics and
communications part of Rockwell, began trading on the New York Stock
Exchange as a separate entity with the ticker symbol: COL. When trading
opened on Monday 2 July 2001, both stocks remained about even at their new
post-split pricing.
With sales of $4.3b, Rockwell Automation now has a market-cap of $2.7b;
while Collins with revenue of $2.61b has a market-cap is $ 4.26b.
Interesting split, showing relative valuations that the stock market places
on Automation and Avionics.
Rockwell International becomes Rockwell Automation
Rockwell Collins begins trading on the NYSE
Don Davis continues as CEO of Rockwell Automation. Keith Nosbusch continues
as president of the Control Systems operating unit of Rockwell Automation,
including its Allen-Bradley, Rockwell Software, and Global Manufacturing
Solutions brands. Joe Swann continues as president of the Power Systems
operating unit and its Dodge and Reliance Electric brands. Rockwell
Automation will also include Rockwell Electronic Commerce, which will
continue to be led by Terry Murphy as president.
Rumors have been floating around recently that Eaton (ETN - sales $ 8b,
market-cap $ 5b) is in talks with Rockwell Automation about a merger. Both
companies have presence in Milwaukee and Cleveland, so it'd be a good fit,
and a good "out" for Don Davis. Stay tuned...
A "deep throat" source from Milwaukee (ROK HQ) reported uncomfortably that
$300,000 is being spent on a golf trip for the Chairman and family of
"said corporation", together with other families and "guests" to attend the
Ryder-cup golf tournament in the UK. After the recent major cutbacks and
layoffs, this seemed like "an obscenity". But then, further probing
elicited the response that "it was already budgeted for in last years
plans" and "the money has already been spent". Hmmmm....
Over this past weekend, two senior people in Rockwell Automation UK quit to
join ABB. Is this in response to the Ryder-cup fiasco? Perhaps.... We'd
welcome comment from Don Davis, or someone (anyone) from Milwaukee.
Invensys in decline - Marshall's involvement
Allen Yurko spoke last week at Wonderware's trade show in Las Vegas. He
actually talked at length about "Project Unity" and mentioned that the
number of Invensys "data centers" would be reduced from several hundred
down to 6, and ERP systems from 150 to 1.
Most people assume that the remaining data centers will be at Foxboro, the
UK, and other places that are "politically plugged in" to the decision
makers. If you're an Invensys-company IT person who isn't at one of the
privileged sites, you've probably already been told of your impending
transfer to IBM. Of course, this assumes that Project Unity continues to
its completion. When Yurko departs, who knows what the new CEO will do. The
current "supporters" will quickly change their tune.
Lord Colin Marshall, Invensys Chairman of the Board, shares a lot of blame
for the decline of Invensys. Marshall, who actually precipitated the Siebe
purchase of BTR, openly boasted at the time that that his primary
motivation was xenophobic (dislike of foreigners) and anglocentric.
Interestingly enough, Marshall is now trying to point the finger at Allen
Yurko and is Yurko's biggest enemy.
The BTR decision alone has cost Siebe billions in market cap. BTR has
consumed 150% of the energy and efforts of Yurko's management team that
should have been fixing what they had vs. buying and restructuring BTRs
really lousy assets.
Some institutional investors have clamored for Marshall's resignation. The
London Observer reported recently that Marshall is preventing the return of
shareholder confidence. Marshall sits on lots of boards (10 or so,
including British Airways) most of which are in not-too-good shape. He is
rather arrogant, but the pressure must be getting through.
Some UK Invensys people have actually said, and I quote: "It is the
Chairman's (Lord Marshall's) job to oust the CEO when needed". Ouch#@!*%
Sources report that Marshall has already instructed recruiters to look for
a replacement.
My own advice to Allen Yurko (which I know he doesn't need): "Watch your back!"
Invensys in Decline - read the whole story
Invensys buys Baan - background and follow-on impact
GE & Honeywell merger finally off
This past week, in a last-minute effort to overcome antitrust concerns and
close the deal, Honeywell offered to cut $1.8 billion off its purchase
price to compensate GE for divestitures. Honeywell said it would reduce the
stock exchange-ratio on the deal to 1.01 shares of GE for each Honeywell
share - down from the previous ratio of 1.055 shares of GE.
Shortly after the Honeywell offer, GE Chairman Jack Welch strongly rejected
the proposal, saying that the plan "makes no sense" for GE shareholders.
Shares of Honeywell closed down $3.21, or 8.4 percent, to $34.99. Honeywell
stock had declined to a session low of $33. Trading in Honeywell spiked,
reaching nearly 52 million shares versus average daily volume of about 8
million, as arbitrageurs unwound trading positions. On the other hand, GE
shares edged up 13 cents to $49 on above-average volume of more than 50
million shares.
Finally, on Tuesday morning (July 3, 2001) the European Commission formally
rejected the merger, closing the case.
What next? CEO Michael Bonsignore will be kicked out by the Honeywell
board; United Technologies will come back with an offer, though not as high
as their previous bid; others (possibly Emerson, Siemens, Tyco) will make
bids, to keep the pieces they want and divest the remainder.
Honeywell offers to cuts purchase price
Welch rejects Honeywell offer
EC Rejects the GE/Honeywell deal
Chronology - Key events in GE bid for Honeywell
TGIF Humor
After the deal with GE fell through, it has been reported that Honeywell
may merge with Fairchild Corp. The new company will be called Fairwell Honeychild.
Another possibility: Honeywell and Rockwell Automation - new name: Honeyrock.
Book : Affluenza - the all-consuming epidemic
This new book, by John deGraaf, David Wann and Thomas Naylor, is an
eye-opening, soul-prodding look at the excess of affluent western
societies.
If you are uncomfortable about your own ruthless consumption or sigh at the
hurried pace of your own life, you may already be ill with "affluenza".
This is something akin to "a painful, contagious, socially-transmitted
condition of overload, debt, anxiety and waste resulting from the dogged
pursuit of more." It's a powerful virus running rampant in our society,
infecting our souls, affecting our wallets and financial well-being, and
threatening to destroy not only the environment but also our families and
communities.
Good book - stop, buy one and read it!
Affluenza : the all-consuming epidemic
Charity - where does it begin? and end?
Speaking of affluence, by world standards, most of the people reading
these webzine columns are wealthy. So, given that we have more than most,
how much should we give as charity? And is our giving obligation, goodwill
or guilt?
You might enjoy my new article on the subject of Charity, just published in
the July 2001 issue of *spark-on-line*. You might also like several other
items in this popular, monthly webzine.
Charity - where does it begin, and end?
*spark-online* - Issue 20 - July 2001
eFeedback
An Invensys cluetrain correspondent wrote:
"Your latest article about Yurko is circulating around here at light speed. Sounds like you were a fly on
the wall at the last board meeting!
"Yes, it does take a different type of talent to build a company over just
taking it apart to maximize profits. I believe when a corporate giant just
buys companies, does not really know the industry, and has not grown with
it, the acquired companies are disadvantaged - especially when they try to
be so active. A less active parent company role would have saved several
good companies and likely resulted in better long and short-term sales
growth performance.
"I know you are aware that employee morale is terrible - the worst I have
ever seen in my 11 years. It is widely believed that Invensys will trash us
to save themselves."
Regarding mobile mini-plants, Gerry Shand from Canada, [GWShand@celanese.com] commented:
"While manufacturing in a box is not a new concept (we build skids like
this in Alberta all the time for the petrochemical industry), I can see it
being applied in some pretty traditional industries like agriculture. My
viewpoint: in order for the family farm to survive they will need to find a
way to add value to their products. They can do this by in-situ
manufacturing at the farm thereby cutting out as many middlemen as possible
and making enough profit to survive and even prosper. I have come up with
some agriculture automation designs and concepts that would appeal to small
and medium farming operations. If you know of anyone who is interested,
please have them drop me a line."
Dean Reimer [dreimer@westroc.com] sent this suggestion:
"Jim, I recently subscribed to your e-newsletter after linking to it from
the A-List. I enjoy reading it, and appreciate some of the great links to
fascinating material that I might otherwise never come across.
I do have one complaint however: e-please e-stop e-prefacing e-everything!
e-Sincerely, Dean."
JimPinto response:
"Dean, thanks for the e-fee - uh, feedback! I thought I
was being cute.... I suppose over-use reduces the cuteness. I'll curb."
JimPinto.com eNews - on the web
If you've missed a couple of issues of eNews, or wish to refer to earlier
items, please note : You can see ALL past issues online at :
Click here to see the Index of ALL past JimPinto.com eNews
eSpeak to me
If smell something fishy in your pond, please e-let me know and I'll check it out. Please send your tips and alerts, your news, views
and stews. I'd like to e-hear from you.
If you have comments or suggestions for Growth & Success News,
please contact me directly at :
Jim@JimPinto.com
Subscribe or Unsubscribe
If you got this eNews through someone else, you might like to
subscribe for a regular free copy, direct to your own email.
Just click your mouse on :
Or, if you're lazy, simply send a blank email message to :
Sign-up@JimPinto.com
with subject line : "sign me up for JimPinto.com E-mail news".
To be removed send a blank email message to
eRemove@JimPinto.com with subject line "Remove".
Stay in e-touch!
Cheers:
|
Return to JimPinto.com HomePage