• Will GE dump Honeywell?
• Will Invensys dump Yurko?
• Cluetrain Comments
• Tech Review : Untangling Code - AspectJava
• Napster Update
• eFeedback - Human Cloning, Cluetrain

In this issue, we have updates and Pinto-prognostications on industrial automation majors - Honeywell and Invensys.

The industrial journals and controls magazines don't (or won't) tell you these things. Remember, you read it here first....

Will GE dump Honeywell?

This relates to whether or not the the Honeywell Avionics business is an anti-trust issue. Defense and aerospace group BAE Systems probably initiated the anti-competitive review, and is quickly jumping in to see if they can buy the Honeywell avionics business; but, Avionics is the very reason that GE wanted to buy Honeywell in the first place. The rest of Honeywell is "baggage" to GE, and GE has already said it will not make significant disposals to get the deal through.

The Yahoo story on the GE/Honeywell EC stall

Sources report that the overall Honeywell and IAC (particularly!) due diligence results were "really ugly": use of aggressive accounting practices (e.g. recognizing revenue on a project before you even have the order!), an eroding product portfolio, a shrinking market position and costs that are out of control. This wouldn't have been enough to cause GE to scotch the deal by itself, since GE really did not anticipate much benefit from IAC in their acquisition model. They would have either sold IAC or slashed expenses, restructured and harvested it.

This situation - plus the European Commission objection - may be bad enough to make Jack Welch welch, rather than destroy the GE stock value. The GE market cap is down almost a quarter of a trillion dollars since they announced this deal. GE might have just been given a "get out of jail free" card, since the Honeywell purchase was contingent on regulatory approval.

Mike Bonsignore, the Honeywell CEO is really the one responsible for the mess. And, interestingly enough, Bonsignore's total personal compensation for the two desperation sales of Honeywell (first to Allied, and now to GE) will be about $150 million. Yahoo's insider trading report on Honeywell lists the following transactions :

• 5 Feb 01 : Michael R. Bonsignore Exercised Options at $23.10/Share and Sold at $49.07/Share. Proceeds of $2,597,000.
• 2 Nov 00 : Michael R. Bonsignore Exercised Options at $17.66/Share and Sold at $53.19/Share. Proceeds of $3,997,089.
• 30 Oct 00 : Michael R. Bonsignore - Proposed Sale (Form 144). Estimated proceeds of $4,915,322.
• 20 April 00 : Michael R. Bonsignore Exercised Options at $17.49/Share and Sold at $56.00/Share. Proceeds of $1,545,791.
• 19 April 00 : Michael R. Bonsignore Exercised Options at $16.14/Share and Sold at $55.00/Share. Proceeds of $1,551,952.

Insider Trading for Honeywell

Pinto-Prediction

Invensys Update : will Yurko be dumped?

Invensys News release with the profit-warning

Financial Times Invensys story

Interestingly, all-round declines in the financial markets seem to camouflage the Invensys problems. This (combined with the fact that there is no replacement) may yet save CEO Allen Yurko.

However, The London Independent had this to say : "Allen Yurko is coming under renewed pressure to step down as chief executive of troubled engineering firm Invensys as the City loses faith in his strategy. Shareholders are becoming increasingly disgruntled by his management style and the flow of bad news. Many investors would also like to see the resignation of the group's chief finance officer, Kathleen O'Donovan, who joined from BTR, which merged with Mr Yurko's Siebe to form Invensys."

Over the last year Invensys shares have more than halved in value. One analyst said: "It has got to the point where a lot of fund managers think Invensys is just too risky. People won't touch it until Yurko and O'Donovan have gone". In presentations after the announcements, there was no mention of "anything being wrong, which left a very sour taste in the mouth." Some people think that it is not a question of whether, but when Yurko will exit. Others claim that headhunters are already on the prowl.

UK Independent News : Invensys story

Pinto-Prognostications

1. BTR was a pig in a poke and Yurko should not have allowed himself to be talked into buying it. The BTR merger has cost Invensys billions in market cap and consumed a lot of management energy, with bad results.
2. People selection. For example, the recently departed Jim Mueller (COO) was widely regarded as knowing how to wield an axe but very little about the strategy or tactical elements of running and profitably growing a business. As good managers keep trying to run up the down-escalator, they are being down-graded by additional layers of newcomers who promise a lot but bring little to the game.
3. Distancing himself from the operations. He has viewed himself as the grand strategist and has taken himself too seriously. People like Mueller shielded their boss from the "details" and a clear vision of what is important on the inside. Yurko needs more Management by Walking Around (MBWA).

Tech review : Untangling Code

MIT Tech-10

In this issue we summarize Code Untanglement : technology that allows software writers to make global code fixes with just one touch of a button.

Current "crosscutting" capabilities include tracing and recording every operation, security and synchronization (to make sure that two programmers don't try to access the same data at the same time) etc. However, keeping track is an error-prone process and very dependent on programmers "remembering" to keep track.

A new programming language called "Aspect" allows programmers to write, view and edit crosscutting as a separate entity. Once the programmer is happy with it, a single keystroke will weave the aspect into the code wherever it is needed. It's a smart, intuitive, neat solution to an old problem. Widespread adoption of Aspect holds out the promise of less buggy upgrades, shorter product cycles and, ultimately, better and less expensive software.

The idea of "aspects" (with different names) has been around for many years. But a team at Xerox PARC have taken the concept out of the lab and into the real world by incorporating the idea into a new extension of the programming language Java. The beta version of this extension (called AspectJ) is already available and release 1.0 ready is expected by June. This practical Java extension makes aspects part of the vernacular of programming languages.

MIT-Review on "Untangling Code"

Xerox PARC "Aspect-orientated Programming"

Download the free beta-version of Aspect

NAPSTER update

Now, the Recording Industry Association (bless their hearts) says it will complain to a federal judge Napster isn't complying with the terms of the court's injunction. While Napster says it has blocked more than 200,000 sings and is working on more, most users evade the block by mis-spelling artists' names and song titles. Napster in turn has complained to the court that the song lists from the record labels aren't always complete.

I tried Napster with several songs in the past few days - and found each and every song I looked for - some by using just a portion of the name of the artist or song. Indeed, it seems that users have come up with an "understanding" to re-name "banned" songs on their own computers, which are then "free" to be downloaded under the changed names.

Frankly, it seems impossible to stop this new mechanism without totally closing down Napster. And if that happens, several new websites and services will sprout, not requiring the Napster interface. New methods will become available for people to connect directly to other people who are interested in swapping songs - or any other information on their computers.

Record Labels file new complaints against Napster

The original RIA Complaint against Napster

New Napster "hack" allows free distribution of Movies and Software

Cluetrain Comments

7. Hyperlinks subvert hierarchy.
8. In both internetworked markets and among intranetworked employees, people are speaking to each other in a powerful new way.
9. These networked conversations are enabling powerful new forms of social organization and knowledge exchange to emerge.
10. As a result, markets are getting smarter, more informed, more organized. Participation in a networked market changes people fundamentally.
11. People in networked markets have figured out that they get far better information and support from one another than from vendors. So much for corporate rhetoric about adding value to commoditized products.
12. There are no secrets. The networked market knows more than companies do about their own products. And whether the news is good or bad, they tell everyone.

In any event, it is clear that the Internet is causing a revolution that is changing the face of business everywhere. Everyone everywhere is talking to everyone everywhere. It matters not whether you are in the next cubicle or continent - we can talk. If we have similar interests, we feed on each other with excitement. If our inputs do not strike a chord, they simply fizzle out.

Read the 95 theses and sign "The ClueTrain Manifesto"

Go buy the Cluetrain book

You might be amused by "Gluetrain"

eFeedback

"That is a very scary thought! Changing our Ethical, Theological and Spiritual compass for the sake of technology, especially biotechnology is dangerous. I think we need only look back as far as Nazi Germany to see an example of that experiment tried and gone wrong. In the hands of a perfectly ethical society cloning might be a benefit - but that society alas does not exist on this world. To see the danger in this is not to hide or avoid, but to clearly see without the rose colored glasses of humanism the real danger in the Moral, Ethical, Theological and Spiritual relativism that is being called for. "

The efeedback on Cluetrain continued. Dave Rich [dwrich@visi.com] e-wrote :

"When movable type was introduce-developed and printing industry got its big start in the 1600 it started the first information age. As such we have had some more quantum jumps due to technology. I know how friends will want to tell someone of the problems at work, to unload there woes, to just tell someone, or to get back at someone. With e-mail they can tell more people and right - wrong the word can get out and corp. can't stop them. Its a way for the "little people" can get back at or keep the big people from getting away with something. e-mail may not really change a company's course but e-mailers can feel good about telling the "truth". It seems to me that people can use e-mail to tell the truth to someone and feel they have done good. The e-mailers can't get the truth to the investors but just telling the outside probably makes then feel they have done some good. Its odd how we want the truth known in some parts of our world but not everything, our age, our weight, etc."

An avid reader, who would "prefer not to be named" on this, e-comments :

"The piece about a boss sacking half the department rings a familiar tone. In fact most of the controls companies have been doing just that for the past 5 years. Where do these people go? In the Western world the concept of a job for life is long gone. Yet in Japan the job for life ideology had worked well for the post war period, but now they are facing serious trouble. So who is right?

"The philosophy underlying a market economy is continual growth. That's certainly a primary objective of nearly all publicly traded entities. Of course we all know a lot of this growth has not been organic, most is through takeover and merger activity. Reviewing the past 3 years of the Dow Jones index it would seem to be suggesting something else is happening? Clearly there is insufficient resources (and that includes fresh air) to sustain continual growth of the human population, yet growth of the human population is the only 'certain' growth area.

"Perhaps our corporations need to take a leaf out of the greenies booklet (pardon the pun) and start showing their staff how to plan to live with less and not just less of us! My grandparents made use of everything, they certainly recycled their newspapers. Maybe it's already beginning, my local council took away my rubbish receptacle and replaced it with one half the size. Now we can't afford to throw anything away!

Where's it all heading?"

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