• Corporate executives personal excesses
• Book: What's so great about America
• Automation Update - ABB reports Q2 loss & stock drops 23%
• 1984 'big brother' threat remains - only off schedule
• Human-embedded chips for ID and tracking
• eFeedback:
  • Corporate Greed - Fairness to employees
  • A long-time Foxboro employee points the finger at Invensys
  • Yokogawa considers N.America a primary growth market

Corporate executives' personal greed

WorldCom CFO Scott Sullivan, responsible for improper accounting to the tune of $3.9 billion, is continuing to build his $15m Mediterranean-style palace in the exclusive Le Lac neighborhood near Boca Raton, Florida, Mecca for America's financial royals. The plans for Sullivan's sprawling home on 4.3 acres of lakefront include a game room, 18-seat theater, BBQ and wet bar, domed exercise room, library, art gallery, wine cellar and separate wine room, 8 bedrooms and eight bathrooms, with 17,000 sq.ft. of air-conditioned space and another 7,000 or so in covered balconies, terraces and walkways. The master bedroom is 34 ft. long, including a sitting area, with a gas fireplaces and an 'art niche' in one corner. The courtyard is flanked by 2 3-car garages, with maid's quarters above. The house is wired for 9 refrigerators, 4 microwaves and 6 Jacuzzis. There are 3 reflecting pools and fountains. Past the entry fountain, the grand hall opens onto a central staircase rising to the second level, with an elevator for those who don't want to walk up the 30 stairs.

Global Crossing recently filed for bankruptcy with $12 billion of debt. Chairman & CEO Gary Winnick had already sold $734m worth of his shares and bought a $92m estate abutting the Bel-Air Country Club in Los Angeles. The Georgian-style mansion has 64 rooms, include a kitchen with 6 sinks and enough ovens to warm 100 plates at once. The master suite boasts separate massage, sitting and shower rooms. There are 12 bedrooms and 12 bathrooms - just for servants. Hmmm... I'd better stop - this is getting too long, and it's too similar to the previous paragraph anyway.)

Before we continue to list these excesses ad nauseum, let's bring some sanity to the scenario. Corporate structure and Capitalism are NOT at fault here. These are simply some of the egotistical, unbalanced people who have succumbed to "the lure of the lifestyle". The ones who are cheats don't have the decency, or the shame, to at least moderate their excesses in the light of their recent failures. One wonders how they rationalize these luxury to themselves after they have been found out. Who are the 'friends' who will visit with Sullivan and Winnick now, to breathe ooohs and aahhs at their ostentatious opulence and licentious luxury?

Successful leaders are classic narcissists in the Freudian sense, says Michael Maccoby, whose book "The Productive Narcissist" will be out soon. These egotists are charmers and risk-takers, big personalities and big visions. Maccoby's recent examples are Jack Welch, Steve Jobs, Bill Gates. He notes that these types have 'feelings of grandiosity' that success creates, pushing some to lose hold of reality, then crash and burn.

Corporate salaries and stock options have skyrocketed over the last few years and three groups are trying hard to institute reform. a/ Shareholders complain that even when companies are losing money, executives seem to be earning plenty. So, buy companies with boards that track and reward performance, and penalize lack of it. b/ Workers complain that they work just as hard as executives for far less money. They should recognize that pay comes with growth and profit performance, not just "hard work". c/ Major investors and board members who argue that profits are maximized by the smartest executives who have incentives to improve share price. They need to recognize propensity for ego-driven excess, and find ways to monitor and control personal greed.

Wired (July 2002)- Egomania? We can rebuild it

Taking stock of corporate salary excess

JimPinto on Creeping Criminality

What's so great about America

In his latest book Dinesh D'Souza (like me, born in India) writes: "America is the greatest, freest, and most decent society in existence. American life as it is lived today is the best life that our world has to offer."

Yes, there are those who hate it - from the radical Islamists, to the right-wingers like Pat Buchanan and the left-wingers like Jesse Jackson. But D'Souza insists that they are wrong to hate it, and grapples with all of them in this compelling new book.

A former domestic policy analyst under Regan and a neo-conservative thinker, Dinesh D'Souza describes his encounter with America from the objective yet involved viewpoint of an immigrant, now a citizen. Written in the months following the 9/11 terrorist strikes, this book reviews the misconceptions about Islamic fundamentalism on the one hand, and our own misconceptions regarding those who would sacrifice their own lives to cause America damage.

In these difficult and trying times, with the budget for Homeland Security increasing to $50b, while Corporate excesses and greed escalate to even more enormous proportions, this is a good book to read. You'll enjoy an objective and realistic assessment of America, with a broad historic and cultural perspective.

Visit Dinesh D'Souza's website

Buy "What's so great about America" from Amazon.com

Automation update:
ABB reports Q2 loss & stock drops 23%

ABB averted a financial crisis earlier this year and has suffered a series of embarrassments surrounding current and former top executives and their pay. It said today that the loss was caused in part because of cost overruns at two projects in its oil, gas and petrochemicals division that it did not identify.

Much of the problem was traceable to asbestos-related litigation in the US, stemming from industrial boilers made in the 1970's by Combustion Engineering. ABB bought CE and then sold it, but retained responsibility for the liabilities. Asbestos claims against the company rose 10 percent in the quarter, raising concerns that ABB will have to add to its reserves.

ABB CEO Jörgen Centerman has been struggling to restore confidence. He insisted that if you look at the underlying performance, nearly every single parameter is moving in the right direction. Positive signs included 10% increase of new orders, and 8% rebound in sales from Q1. Mr. Centerman said the second half of the year was looking stronger; earlier this week, ABB landed a $1b Russian order.

Over the last year, ABB has eliminated 10,900 jobs, at a cost of $106m. Like Invensys, ABB expects asset sales to help meet its target for reducing debt. The financial unit has reportedly been sold.

The process control parts & pieces ABB acquired (Bailey, AccuRay) continue to decline. ABB is still suffering from the legacy of unsolved Elsag-Bailey problems, such as the acquisition of Hartman & Braun. Rumors are rife about some product lines or segments of Bailey and others being on the block - but it's too early to tell whether this still only second-guessing.

Good luck, Jorgen Centermann! In these trying times, you'll need it!

ABB Posts 62% Drop in First-Half Earnings

ABB Net Debt To Improve In 3rd Quarter With Fin Unit Sale

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1984 threat remains - only off schedule

There is currently a major onslaught on privacy issues as part of the Homeland Security plan. Maybe, we'll find that Orwell was right about 'big brother' - the only thing wrong was the date.

Read Orwell's 1984 on-line

Happy New Year: It's 1984 (written on 22 Sept. 2001)

Big Brother Is monitoring us by databases

Review comments & feedback on the MIT-Tech Review article

Think about this: 'Big brother' monitoring is not suddenly enforced. It is something that people gradually accept for a variety of reasons. Take a look at the following item: the fear of kidnapping and terrorism is causing many people to actually volunteer to be monitored.

Human-embedded chips for ID & tracking

There are already many applications where tiny chips embedded in the human body allow non-invasive access to information for medical and other critical purposes. The use of this technology means that the threat of theft, loss, duplication or counterfeiting of data is substantially diminished or eliminated. Specific uses include: foolproof ID (terrorist identification), search and rescue and various law enforcement and defense uses.

Hundreds of thousands of medical devices are already surgically implanted into patients every year. Examples are pacemakers, artificial joints, orthopedic hardware, heart valves, medication pumps. Chip-implants provide a new method for obtaining medically critical information and full medical record archival/retrieval for emergency medical care.

What would you think of a law which proposed that a chip be implanted in every human as a foolproof ID device? The social, ethical, legal, moral implications are significant. Thinkaboutit.

Human implants are already here

Verichip - miniature, implantable identification device

eFeedback

"There is very little being done to protect employee rights. Senior executives have golden parachutes and suck perks out of under performing companies as they slide towards the brink, while the rank and file face financial ruin on the downsizing and short severances. Enron and Worldcomm are cases in point.

"As an investor there is little reporting information to indicate the balance between short-term and long-term corporate objectives. Financial statements and accounting standards need not stop short at measuring the dollars. Why don't they measure employee turnover and satisfaction? A standard audit procedure could be developed that is highly valid for comparison purposes within an industry. These are critical leading indicators of company performance. They would impact the stock price and force senior managers to move human resource issues higher up the agenda."

"As ex-employee of the Invensys, Foxboro Environmental Operations (sold off to Thermo), I can tell you for certain that upper management padded the books at the end of each and every quarter. This practice was very common place from the mid 1990's to the day they were sold.

"They would force their sales representatives to place orders before the end of the quarter and then remove them from the books after the quarter numbers were in. As I understand it, this resulted in some big bonuses for the General Managers. Whereas this was great for the GM's and Allen Yurko, it was very detrimental to the rest of the group. The result of this practice led to lay-offs, reduced inventories to the point of not being able to function in a productive manner, and just general low morale throughout the division.

"This practice sucked the life and money out of a very good division of Foxboro. At the very end, it was a horrible place to work. I still have friends that are working for other Foxboro divisions of Invensys and the tale is always the same.

"I'm am continually amazed that Invensys has survived this long. I'm also surprised that some employee has not taken them to court for some for their practices."

"As a former VP and GM for Yokogawa America (resigned March 02) I read your article on Yokogawa with great interest. I felt that the comments from Chris Carnavos (former VP of Yokogawa Systems) were a bit outdated.

"Yokogawa HQ has US as their #1 growth market and requires Yokogawa America to make profit (#1 priority is operating income). In the past few years they have experienced flat to negative sales growth. Yokogawa America has learned how to run a profitable business in spite of lack of growth."

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