Hope for the walking wounded

The 'walking wounded' of the industrial automation sector seem to have started 2002 with rather more hope of surviving to the end of it than might have been thought possible only a few short months ago. The most notable recovery in stock market sentiment comes from Invensys whose share price reached a new six month high in early January following news of the sale of the group's industrial batteries business to Enersys for $505m. Invensys will use the proceeds to reduce its current debt burden. Some £845m worth of further disposals are said to be in the pipeline.

Next milestone for the group comes this month when CEO Rick Haythornthwaite publishes the results of his strategic review. That, presumably, is the point when shareholders - and competitors - will learn whether Invensys is to remain a force in industrial automation or whether Invensys Software Systems (which comprises Baan and Invensys Process Systems, the latter made up in turn of, among others, Foxboro, Wonderware and APV) is to be disposed of - either as a whole or piecemeal.

Apart from bringing a smile to faces of shareholders, the main effect of the rise in the Invensys stock price is to remove the immediate prospect of an opportunist acquisition of the group as a whole. At the same time, Siemens' decision to go public with its plans for the convergence of its legacy APACS+ and PCS 7 Process Automation Systems suggests that it is not currently in the running for Foxboro, or indeed for Honeywell's process automation interests, although that would not preclude it being very interested in Rockwell, if post GE-Honeywell anti-trust objections could be overcome.

With Siemens out of the frame, therefore, and with ABB seemingly preoccupied, the only realistic contender for Invensys' or Honeywell's process automation interests from within the sector would be Emerson. But might not Emerson consider problems of integration more likely to detract from rather than enhance its current status. For that reason, unless Haythornthwaite can find a willing purchaser from outside the process automation sector, perhaps by appealing to Schneider's desire for expansion, he may, whatever the outcome of his strategic review, be left with no alternative but to rebuild Process Systems himself. All the more reason therefore to halt the current pursuit of short term cost savings through continued lay offs and ensure that he still has enough talent and good will remaining on which to stage the comeback once the die is cast.

My own prediction for the process automation sector for 2002, for what it's worth, is for both Foxboro and Honeywell, whether under their present ownership or no, to re-establish themselves as serious contenders. Meanwhile what of Rockwell? Jim Pinto (Connections for Growth & Success, www.jimpinto.com) recently reported a Rockwell VP, at a meeting of employees last September, responding to the question "Will Rockwell be sold?" with the answer that it would indeed be sold within one year. The 'one year' apparently results from tax provisions at the time of the split of Rockwell into Rockwell Automation and Rockwell Collins which would present anyone buying one of the pieces on or before January 1st 2003 with an extra $1bn tax bill.

Who would be queuing up next New Year's Day? Pinto excludes Invensys, Honeywell and ABB on the grounds of other preoccupations, and both Mitsubishi or Omron because "they don't know how to acquire." That leaves, in his view, "...Siemens (perhaps), Emerson (may be), Tyco or GE (possibly), Groupe Schneider (who knows?), Eaton or Danaher." Place your bets.

Question: When is a non-proprietary standard proprietary? Answer: When it's the non-proprietary standard you're not yourself using. Now I hold no brief for Profibus, Foundation fieldbus, ControlNet or DeviceNet, nor for any of the other protocols recently incorporated into IEC standards, but perhaps its time for a moratorium on the 'p' word before any serious misunderstandings ensue.

Industrial Automation INSIDER
f910@industrialnetworking.co.uk

Andrew Bond is the Editor of the monthly subscription newsletter Industrial Automation INSIDER. You can contact him by email at scada@abpubs.demon.co.uk. And if you mention INOC, Andrew will send you a complimentary copy of the latest issue of Industrial Automation INSIDER

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