• Automation Update 2002 (4)
  • Invensys re-organization reaction
  • Honeywell gets a big bucks new boss
  • Rockwell Automation webcast and forecast
• New Sony AIBO ERS-220 robot-dog - how robots will change us
• Open letter from Dick Morley on Modicon
• Aquariums on your screen - P2P ocean windows
• Crony Capitalism
• eFeedback:
  • What is Allen Yurko doing?
  • Invensys comments on Emerson DeltaV
  • Downloading free music

Automation Update 2002 (4)

Invensys re-org reaction

Debt is still the big problem. Many of the businesses for sale provide the cash flow - about 2% of sales - that Invensys generates. The 60%-of-sales price target for disposals (the whole group is valued at about one-times-sales) indicates how anxious the bankers are for debt repayment. The sell-off is necessary for Invensys to refinance GBP 950m of loans due by August. In the meantime, interest rates on the loan balance are likely to double.

Invensys strategy review

UK Financial Times - Invensys Digging Deep

Pinto Prognostications:

Haythornthwaite's mission is to sell Invensys at a good price. He is doing as well as can be expected given the mess that he inherited from Yurko. The "core" strategy did not impress the market - share price continued to drop.

The talk about saving the "core" by using "best practices" and providing "solutions" shows that Haythornthwaite is simply out of ammunition. What else can he say?

Invensys is putting up for sale what is saleable, at a price better than book value. What is left (and not saleable) is "consolidated" and will be sold off later as part of the group. That's the best way to get the best price.

Mike Bresler [breslermw@attbi.com] comments:
"Based on many years of watching Monty Python's Flying Circus, I believe the proper British term for losing one's job is 'sacked'. Wouldn't it be fun to see John Cleese and company do a skit about the Invensys fiasco and all the related 'sackings'?"

UK Independent - Marshall faces Ax at troubled Invensys

Honeywell gets a new boss with big buck$$$

It's interesting to note how a CEO is "lured" to switch in this environment. Bossidy and the Honeywell board evidently felt that David Cote was worth the bug bucks they shelled out.

Here are the details of David Cote's "compensation package":

1. Initial annual base salary is $1.5 million, with a guaranteed bonus of $1.9 million this year. Annual salary can be increased, but not decreased each year, at the discretion of the board.
2. Starting next year, an annual bonus of up to 125% of annual base salary, based on Honeywell's short-term incentive plan. Also, eligible for additional equity compensation of up to 230% of total base salary and target bonus for that year.
3. Additional $5m to compensate him for the bonus and incentive awards he would have received had he remained at TRW; this will be reduced by any amounts he gets from TRW.
4. A sign-on bonus of one million stock options that vest over the next six years. 770,000 shares of Honeywell restricted stock and 625,200 stock options to make up for equity compensation lost in switching companies. The restricted stock vests through July 2012, while the options have a 10-year term and vest incrementally starting this Nov. through Feb. 2004. Another 550,000 stock options will vest over the next three years. (See if you can figure that out...)
5. Five-year contract includes use of company-owned aircraft, a retirement plan and life insurance.

David Cote is known to be a tough taskmaster and merciless with cutting head-count. After all the cleanup and layoffs are complete, he has the job of generating growth. In my opinion, his focus will be avionics; he will keep Honeywell Home & Building (energy management) but will divest the poor-performing Industrial Automation & Controls (IAC) soon.

Bossidy resigns - TRW Cote named as successor

Honeywell will pay new President at least $3.4m in 2002

Rockwell Automation webcast & forecast

Rockwell expects sales in its fiscal second quarter, which ends in March, will be essentially equal to 2002 first quarter sales, with a modest improvement in earnings per share. There was no forecast beyond the current quarter.

The company's name change to Rockwell Automation, Inc. became legally effective after Monday, February 25, 2002. This week (March 5 02) Rockwell stock took a nice up tick.

Pinto Prognostications:

In my opinion, this performance (with some RIF casualties) is in preparation for sale of Rockwell Automation later this year.

Listen for yourself - Rockwell Automation webcast

Rockwell Automation Reaffirms 2Q Outlook & Confirms Name Change

How robots will change us - Sony's new AIBO robot-dog

Sony's AIBO robot-dog family is expanded with the latest addition - AIBO ERS-220 - witb the latest in robotic technology. AIBO is now even more expressive and interactive, with a slick new futuristic look. Sony describes the new robotic dog as having "enhanced functionalities" that will "enable customers to experience deeper emotional ties with the AIBO".

This latest AIBO exceeds expectations, with fully interactive features that make it a perfect 'pet'. New features include 21 lights (LEDs) in strategic spots on its head, mainly on its face and visor. It has more expressive communication, enhanced by the retractable headlight on its head. Enhanced sensors allow it to interact with its owner in a more effective and realistic way, with "16 degrees of freedom" - a head sensor, 3 joints in its neck and three joints in each of its legs.

AIBO has new motion detection, photo-taking facility and the ability to change the sounds it makes while it walks. The Boost Mode provides an added mood that shifts when it becomes excited, curious or alert. It also has a 75-word vocabulary - compared with 25 words for the old AIBO.

Robot World review of AIBO ERS-220

Sony Aibo website

Rodney Brooks (Director of the MIT Artificial Intelligence Laboratory and Chairman of iRobot Corporation) explores many themes related to life with robots in his new book "Flesh & Machines". The book centers on Brooks' passion for creating what he calls "situated creatures" which we can eventually regard as our teachers and companions.

Rodney Brooks Book: Flesh & Machines - how robots will change us

Visit Rodney Brooks' Personal Page

Open letter from Dick Morley - on Modicon

Open Memo to Jim Pinto
From Dick Morley

Subject: Modicon, my baby.

About 30 years ago, my partner, George Schwenk penned the name Modicon. Stands for "MODular DIgital CONtroller". The concept of putting a minicomputer on steroids with a rule based "electricians language" caught on. We called it a PC. Ah, history. 'Tis now called a PLC, courtesy of my old skiiing buddy, Odo Struger of A-B. Gates won, even then.

The company passed through several hands, finally landing on the deck of Schneider, from the country that fashioned the Statue of Liberty. We "sold out" for many reasons. I remember the day when the board suggested that techies were "a dime a dozen." That was the tip over day. So we agreed to sell the company. "Selling out" brought capital and professional management into the company and got rid of the revolutionary, me.

Today, the PLC business has larger revenue than all Hollywood's domestic business of 8 billion a year. Schneider, our extended family, is also larger than Hollywood. I am proud of the name and the heritage.

Why am I writing this memo? Over the last year, you tended to lament the demise of the name "Modicon". Not so, my old friend. The name is a product line, products are named thus, our email is modicon.com and communications and software are well known from the generic Modxxx title.

I liken my relationship to Modicon as to my daughter’s marriage. Pat married Gyt Letourneau. Noble bride cried at the wedding. And smiled. Our daughter is out of the house, we love her, and the name and family go on. As it is with Modicon. In the family of Schneider, 'tis well protected and sheltered. And I still love and grieve for all my children. Life goes on and the name, for me, continues forever.

I write this in the woods of New Hampshire, and no longer have any legal connection to Schneider or the Modicon product line, so my heart, not my wallet, is penning this note.

Your columns, poetry and opinions are great, but please don't forget the heart.

Dick Morley
3 March 2002

Visit Dick Morley's Barn

Read Dick Morley's book - The Technology Machine

Aquarium screen savers - P2P ocean views

Microsoft XP Plus! has an excellent aquarium screen saver included among other things. But, you can download excellent aquarium screen savers free - with varieties of fish, scenery, sounds etc.

Aquatica Waterworlds - 3D fish in multi-dimensional scenery

Now, you can get beyond a single-computer aquarium, to see an ocean populated with a diverse and abundant ecology. Sea horses float among coral reefs, schools of fish dart and weave to evade hungry predators; a mother humpback whale and her calf migrate to cooler waters to feed, etc. Myriad beautiful autonomous creatures are caught in the web of life that plays out before your eyes. As a user you are able to build and influence the ecology of the world, sculpt the surroundings, breed artificial life, or create new life forms from scratch.

DALiWorld provides artificial life scattered across millions of computers everywhere, a living global digital Gaia: a virtual ocean distributed across machines, a community of millions of users all taking part in building this virtual ocean, creating the ecology and the life forms that inhabit it; the life forms seamlessly swimming from one machine to the next. And your PC acts as a co-creator.

The ecology of DALiWorld draws inspiration from the myriad of beautiful creatures that exist in the real world. You'll see many types of fish, including Angelfish, Batfish, Butterfly fish, Damsel fish, Groupers, Leatherjackets (Triggerfish and Filefish), Parrotfish, Surgeonfish, and Wrasse. And you can click on any of the fish families or species to get to know the diverse ecology.

DALiWorld Community continues to grow

Crony Capitalism

When growth stops many start to fudge, which can quickly turn to lying, and then extend to cheating. Few people start off being dishonest - most drift into it through insidious wealth addiction.

It turns out that the recent Enron debacle - the single largest bankruptcy in history - is only the tip of the iceberg. Off book accounting is not something that was invented by Enron; it is disingenuous for the press and congress to present it as an evil that was invented by them. The big accountants, aided and abetted by large financial institutions, consistently look for tax and legal loopholes and actively market their ability to do just that.

This disease, now called 'Enronitis', is endemic in our system. There are many other companies that have large hidden liabilities off their books a la Enron. Once Pandora's Box is opened all hell could break loose with disastrous consequences to our economy.

You make your list of deceitful-accounting candidates. I have my own. Send me an email.

Jim@JimPinto.com

My new article "Crony Capitalism" has just been published (March 02) by the popular webzine Spark-online.

Read Crony Capitalism

See the latest issue of the popular webzine Spark Online

eFeedback

"Yurko made a complete mess of the Invensys, particularly by firing far too many people far too quickly. A lot of the problems were self-inflicted. But Allen refuses to admit his blindness, insisting that his problems were exacerbated by the economic slowdown.

"When I asked Allen what he would do now, he said he would retire to play golf. But that was BS - at 50, he is too bull-headed to retire. Private equity firms like Compass have become a retirement home for many executives who have departed from corporate life. Allen Yurko is probably paying to be a member of the club, while he waits for his next opportunity. And I'm sure there is some board somewhere which will be blind enough, or stupid enough, to hire him."

"I finally got into the archived section and transcribed the full quote about Emerson's Delta V.

Rick Haythornthwaite: "One of the things I heard everywhere I went was we were being taken to the cleaners by Emerson and DeltaV. I think Emerson has done a fantastic job with DeltaV. But when one looks at what they've done with that, it is less about functionality, it is more about marketing and approach."

"Invensys is still in denial concerning DeltaV and their failure to keep pace with technology, but at least they know who the leader is!"

Regarding free downloads of MP3 music, now even more widely spread on P2P websites like Morpheus, Neil R Brown from Glasgow, Scotland [neil.brown@rtel.com] remembers history:

"In the 1970s, when cassette recorders became cheap and readily available, there was a similar fuss about "home taping". Despite the music industry's bleatings to the contrary, several serious studies into this produced the same conclusion - those who taped the most also bought the most. When all you can hear on the radio etc. is the bland stuff dreamed up by the fashion and marketing industries, nobody with any deeper care will buy. Let people hear a wide variety of uncontrolled talent and share their interests and enthusiasm and things can be different.

"Like the technology industries, this seems to go in waves. I am old enough (50 today!) to recall three waves of rebellion - the Beatles etc. in 1962, hippydom in 1967-8 and punk in 1977. Before that were the original rockers in the early 1950s. None of these was conceived and initiated by the industry, though they were quick enough to jump on once the bandwagon stated rolling. The music industry doesn't like talent - preferring image and hype the men in suits can control.

"We are way overdue for another rebellion. The Internet is cheap to broadcast on, worldwide, hard to control, so may provide the way. But, it will need more than that - people get the music they deserve, so Joe Public needs to do his bit as well. I for one would like to see more opportunities for young local bands to play live, pay their dues and learn their trade. But this needs people to want to hear them. If nothing is feeding into the bottom end of the chain, all that will come out at the top is the Mariah Carey's and the like - with the ridiculous $$$ deals and the bland products."

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