Why is the Automation market declining?

Automation List :

I appreciate the keen interest in the subject of my article and the many via-list and direct email responses we have received.

Somehow, a lot of references are being made to Michael Griffin's initial posting comments, rather than the original article. And, it appears that some of you have *not* read the
original article.

Please read the original article : "Why is Industrial Automation Declining?" It's on the web at :
http://www.jimpinto.com/writings/iadecline.html

Or, you may download a pdf-file copy at :
http://www.jimpinto.com/pdf/iadecline.pdf

Thank you!

Cheers:
jim
----------/
Jim Pinto
email : [email protected]
web: www.JimPinto.com
San Diego, CA., USA
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We're having a lot of discussion on whether or not 10% productivity improvements are possible, by new technology or improvements in old technology.

I think we're missing the original point I made.
Quote from the original article :
"From a pragmatic IA marketing standpoint, it seems that there is too much technology chasing too few real needs. Because the training and logistics burden is high, new IA technology that increases shop floor throughput by 10% is simply doomed to failure. Faster computers and better
software do not seem to yield improved productivity in a steel mill or a polyethylene plant. "

The fact of the matter is that *any* productivity improvements that can be yielded by automation are minor, when compared to the total cost and productivity.

A major revolution occurs when the cost/productivity improves by 10 times - yes, let me repeat *10 times*. How will that be possible? For example, by new manufacturing technologies like self-organizing control systems,
Nanotechnology.

Hey, friends, let's stop discussing how the deck-chairs on the Titanic were arranged.....

Cheers:
jim
----------/
Jim Pinto
email : [email protected]
web: www.JimPinto.com
San Diego, CA., USA
----------/
 
D
>Michael Griffin wrote:
> I would define a gain as being due to a *new
> technology* if the improvement would have been
impossible without
> hardware or software which has recently become
available.

I would disagree to some extent with this definition - rather than the term "impossible" I would substitute the term "economically unfeasible". It is possible that you could have solved the problem you listed at the time using existing technology, but could you have done it for a price tag that made it worth it? One of
the most important changes in technology is the
current ability to manufacture systems or components for small fractions of what a comparable unit would have cost 15 years ago. This all means that you can put sensors or processors in places you would never have considered doing so in the past. This seems to
me to be an important technological advance.

Davis Gentry
Applications Engineer
Delta Tau Data Systems
 
Michel A. Levesque commented :

>I believe that the global market is not declining.
>Maybe if one looks at just the major market (NA), but not the
>entire worldwide industry. If the entire industry is on the decline
>then why are we (list members) not out looking for other jobs?

Jim Pinto responds :

Ah! But, many in the industry *are* laid off and looking for new jobs. Take a look around you. The consolidations among the majors are causing a lot of divestitures and cutbacks.

This remind me of a joke-truism :
When someone else is laid off, it's a Recession.
When *you* are laid off, it a Depression".

Michel :
>The industry as a whole may be sagging, but the long term trend
>is up.

Jim:
Sorry, Michel, the long term trend is *not* up. It's flat, or down. Many people have asked - is this temporary, until the "return to normal". Is this only until the "next big thing" ?

Answer : Sorry, folks - there will not be a return to normal. Please review again my comparison with "farming".

Quote from the original article (please read it) :
This is not an accident - it's part of the evolutionary process. Farming, which once employed a major segment of the population,
now employs less than 2% in the US; there are few rich and innovative American farmers. Similarly, manufacturing employed over 35% in the US less than a century ago and this is steadily reducing to about 15% today.

Michel continues :

>Another juicy item from Jim is the level of R&D funding.
>R&D. In a technology driven market such as
>automation, manufacturing companies who are not putting at least
>10% back into R&D are doomed to fail.

Jim :
I agree wholeheartedly!
Engineering and R&D is the lifeblood of a company.
Look at any company that has less than about 10%, and you have a declining business. A growing business puts a much higher percentage into new products.

Michel :
>We see this all the time, the big boys buying up the
>smaller boys with good products...

Jim:

This is because - and I quote :
"It is difficult, if not impossible, to generate real innovation midst the bureaucracy of a large company. The only way to get it seems to be by
buying smaller companies. "

This has spelled the death-knell of large, corporate central engineering.

Michel :
>If the industry is declining, the failure to find the next big thing
is the main reason for this decline.

Jim:
Amen!

Michel concludes :
>Go on to greener pastures.
>Either go global, or stay local. But, if you stay local the market
>will dry up as the technology saturation progresses...

Jim :

Amen! Amen !

Cheers:
jim
----------/
Jim Pinto
email : [email protected]
web: www.JimPinto.com
San Diego, CA., USA
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At 08:21 PM 9/13/2000 -0400, you wrote:

> As another example, we have recently conducted a retro-fit which did
>something similar to that. We wanted to improve the reliability and
>maintainability of certain machines, and the most practical way to implement
>the changes was to replace the original central PLC with several micro-PLCs
>installed in what had been the terminal boxes on the machines.
> We reduced cycle time by about 15% (this was a side effect though,
>rather than the true intention of the project). This was *not* a benefit of
>new technology, even though the new PLCs were newer models than the
>original. We could have accomplished the same thing with hardware of the
>same era that the original was constructed with. Without dwelling on the
>details, it can be said the new hardware was in many ways a "lower tech"
>solution than the original.
> The new hardware made this project *easier and cheaper* by being so
>compact that we could fit them in the existing terminal boxes. However, we
>could still have accomplished it somehow with older hardware.

It could be argued that without the benefit of a small and powerful (new technology) PLC, that you might not have been able to justify the cost for the upgrade. 5 years ago, you might have needed to install larger boxes and a more expensive PLC
to do the same job.

Many of these new micro PLC's are also equipped with powerful networking capabilities, which they actually benefit from more than a larger PLC. This also makes retrofits more attractive.

Bill Sturm
 
M

Michael Griffin

At 11:24 14/09/00 -0400, Michel A. Levesque eng., mcp wrote:
>The article from Jim Pinto really gets you thinking.
>So here are my thoughts on this:
>
>I believe that the global market is not declining.
>Maybe if one looks at just the major market (NA), but not the
>entire worldwide industry. If the entire industry is on the decline
>then why are we (list members) not out looking for other jobs?
<clip>

Several other people have raised this point, and quite frankly I am very curious for more details from Mr. Pinto about this. I don't know about the Montreal area, but things seem to be booming around here and have been for some time. I have heard repeatedly from companies building automated equipment that they can't seem to hire enough programmers and control system
designers.
There are some fairly large companies in southern Ontario that build equipment, and more have been opening up as people see the business
opportunities. A lot of this equipment is exported. Quite a bit goes to the US market, but also to other countries around the world.

If these companies are all so busy, then why would the market for the components they use be declining? The only explanations I can think of are:

1) I am imagining the whole thing.

2) The Canadian market (or at least southwestern Ontario) is booming, but the rest of the world isn't. (Is this likely though?)

3) This decline is actually just a local US phenomenon, and isn't affecting Canada or the rest of the world. This is not entirely impossible. The structure of the economies of the US (which Mr. Pinto is looking at) and Canada (which I am looking at) are very different which means there is no reason why demand for any particular class of specialised products would
necessarily be synchronised (or have any relation at all) between the two.
On a slightly different tack, we have had custom equipment quoted for us by American companies and I have noticed that the price of equipment built in the US is much much higher than comparable equipment built here. In
conversations with these companies I have discovered that they have found it very difficult to compete with Canadian companies in terms of price for typical custom (one-off) machines ever since the American dollar rose so high. I seriously doubt that this particular problem has been large enough to have a significant effect on the overall market in the US though.

4) There is a major world wide decline in industry segments that I am not familiar with (e.g. process industries) that is masking growth in areas that I am familiar with. There are a number of very good reasons why this may be so.

5) Price decreases are large enough that volume is growing (slowly) while sales value is declining. Inelastic markets might mean that lower
prices would not necessarily increase sales volume significantly.

6) *World wide* sales declines are an illusion caused by converting all sales into US dollars. The US dollar has risen against virtually all other currencies (for no particularly good reason). Unless you happen to be
an American company with expenses and sales primarily in US dollars, this will give a distorted picture of your real situation. Restating sales in say euros, yen, (or even Canadian dollars?), might show a different picture.

7) Market declines are an illusion caused by measurement sampling error. Sales may be shifting between different product types (possibly from different companies) and the sales indexes are not adapting to this quickly enough. If you base your overall sales estimates on sales figures from a small selection of companies, and those companies' sales *are* declining while the overall market is actually growing, your sales estimates will be wrong.

Mr. Pinto - would you care to comment? Particularly, I would like to know why industrial automation suppliers would have declining sales if their customers are so busy. What are we missing here?


**********************
Michael Griffin
London, Ont. Canada
[email protected]
**********************
 
R
<clip>
>And you don't even have to examine globalization issues to see the
>decline in the IA market (although those factors are very
>significant). 10 years ago nearly every system we did had a PLC in it
>bought from a big IA company. Now, hardly any use PLCs. And the stuff
>going in now is not bought from the big vendor anymore because they
>are not competitive with the new equipment that is getting bought.
>While my company is not large enough to have any macro effects on the
>market, if you add it up over the thousands of integrators in the
>market who are in a similar position it makes a difference... a big
>difference.
<clip>

I keep hearing about all the customers who are abandoning PLCs but haven't seen it in my markets. Maybe our old school clients are just
resistant to change... I must agree with the general theme of this thread unfortunately, that
is the IA market is not a "growth industry". Where our practitioners will land in 5 years (including myself) is the $64,000 question (or is
it the $1,000,000 question, allowing for inflation and Regis' "final answer?").

Russ Kinner
AVCA Corporation
Maumee, OH
 
Grenville Spearpoint comments :

>>While it may not give industrial automation a significant lift
there is scope for expansion in the food industry.

Jim Pinto agrees :

Yes, there are segments of IA that are doing fine, and where there is room for innovation. Food is an example - of an industry that is always "local". There is a significant amount of
innovation and productivity improvement that is possible.

Go find the green-fields!

Cheers:
jim
----------/
Jim Pinto
email : [email protected]
web: www.JimPinto.com
San Diego, CA., USA
----------/
 
Jim said:
>Farming, which once employed a major segment
>of the population, now employs less than 2% in
>the US; there are few rich and innovative American
>farmers.

Hmm, I think that the *percentage* of U.S. farmers who are rich and/or innovative is at its highest point ever. As a *result* of this, we need far fewer of them. This, folks, is what *success* looks like, not failure. Think of all those former farmers who have now been freed up to build computers and surf the web <grin>.

The automation market is a bit of a different case. I think it is becoming highly segmented and specialized, hence the proliferation of companies, products and technologies. To a major supplier, this looks like stagnation (and, to them, indeed it is). It also looks like stagnation to analysts, for whom only the major suppliers are visible.

But, in aggregate, it is anything but market stagnation. It more closely resembles the chaos described by Thomas Kuhn in his "Structure of Scientific Revolutions", in the period between when an old theory/technology is exhibiting its limits and when a new theory/technology becomes accepted. People cast about for new ideas, many different approaches are tried, and ultimately one or more of these new ideas come to the fore.

I wonder what the automation market will look like 20 years from now?
Regards to all,
Ken Crater, President
Control.com Inc.
[email protected]
 
A

Anthony Kerstens

Michael,

The only qualification I would have on that
is that it's not just being able to hire people,
but hire good people who can hit the ground
running.

I've been in some bad scenarios resulting from
work being done by someone not proficient with
control systems (the "competition"), and having
to clean-up the mess after.

Anthony Kerstens P.Eng.

> -----Original Message-----
> From: The Automation mailing list, managed by Control.com Inc.
> [mailto:[email protected]-CONTROL.COM]On Behalf Of Michael Griffin
>
.....
> the Montreal area, but things seem to be booming around here and have been
> for some time. I have heard repeatedly from companies building automated
> equipment that they can't seem to hire enough programmers and
> control system
> designers.
> There are some fairly large companies in southern Ontario
> that build
> equipment, and more have been opening up as people see the business
> opportunities. A lot of this equipment is exported. Quite a bit
> goes to the
> US market, but also to other countries around the world.
> ....
 
M

Michel A. Levesque, ing.

Michael Griffin <[email protected]> wrote:

> Several other people have raised this point, and
> quite frankly I am
> very curious for more details from Mr. Pinto about this. I
> don't know about
> the Montreal area, but things seem to be booming around here
> and have been
> for some time. I have heard repeatedly from companies
> building automated
> equipment that they can't seem to hire enough programmers and
> control system
> designers.

I too am very curious about those numbers. Michael, for your info. the entire province of Quebec is booming. I used to work for the Rockwell distributor here before starting with an integrator, I have seen the market here grow substantially in the past seven years.

We are also doing jobs internationally (even in the US, because some US integrators cannot get the staff to meet the demand). South America, China, Australia and the middle-east are also booming.

I am assuming that Mr. Pinto is only using numbers from the major manufacturers and extrapolating for the entire industry. This would be like looking only at Boeing and Airbus for the aviation industry and totally miss Bombardier and Embraur, which are creating a whole new segment of the industry. But, I could be wrong.


Michel A. Levesque eng., mcp
Directeur Bureau Montreal
AIA Inc.
[email protected]
 
It will probably be wireless. ;-)


Anthony Kersten wrote :

>> ... Where and when that wave comes I don't know. Whatever it is, it
will still have a wire attached to it, and it will need to be
programmed or configured. That's what matters.<<
 
P

Phillip Costantinou

My 2 cents:
Interesting IA article. These trends, and the consequences we are seeing, were all predicted in the Megatrends book back in the early '80s. I noticed, for example, that there were several vendors at the recent isa show in New Orleans for 'e-business' products/services. I think that that is the future for North America; less sweat work and actual material goods production, more white collar "high tech" work (just look at the recent boom in the stock market with all the day traders-I know of at least 2 people that quit "regular" jobs to be day traders over the internet from their homes).
Thanks, and please keep up the good work.
-Phil
 
A
Robert Lucky had some interesting comment on this in his Sept. 2000 IEEE Spectrum column.

>Jim: (Pinto)........................
>
>This is because - and I quote :
>"It is difficult, if not impossible, to generate real innovation midst the
>bureaucracy of a large company. The only way to get it seems to be by
>buying smaller companies. "
>
>This has spelled the death-knell of large, corporate central engineering.


Al Pawlowski, PE
[email protected]
dba ALMONT Engineering
Baton Rouge, LA USA
 
D

Dave Ferguson

The other issue that I predicted that is kind of happening and everyone has forgotten is that there were huge Y2K issues and budgets and resources that were spent. The IT industry is also
experiencing this to some degree.

I don't know about you but we spent ridiculous amounts of money on Y2k and of course everyone climbed on board and bought all kinds of "extras". Now we are in a position of tighter budgets.

We are all paying the price for this "preparedness". Is this having some effect on the IA market......?

Just a thought......

Dave Ferguson
Blandin Paper Company
UPM-Kymmene
DAVCO Automation
 
Michel A. Levesque eng., mcp wrote:
>I believe that the global market is not declining.
>Maybe if one looks at just the major market (NA), but not the
>entire worldwide industry.

Michael Griffin asked for some clarification :

> I am very curious for more details from Mr. Pinto about this.
>I don't know about the Montreal area, but things seem to be
> booming around here and have been for some time.
>I have heard repeatedly from companies building automated
>equipment that they can't seem to hire enough programmers
>and control system designers.

Jim Pinto responds :
C'mon, guys - put your marketing hats on for a while.... Sure, with a large and broad-based market like industrial automation, there *are* some segments (products, markets, geographical) that will continue to grow. But, the market **as a whole - worldwide** is flat (read - not
growing).

Canada is approximately 10% of the total US market for automation products (most people recognize 5-15%) and some geographical areas and segments will continue to show growth (in the US, Canada and elsewhere).

Michael continues :
>There are some fairly large companies in southern Ontario that build
>equipment, and more have been opening up as people see the business
>opportunities. A lot of this equipment is exported. Quite a bit goes to
the
>US market, but also to other countries around the world.

Jim :
Michael, define "large". Define "lot" and "quite a bit" - (exported to the US and other countries).

Michael asks :
> If these companies are all so busy, then why would the market for
>the components they use be declining?
>The only explanations I can think of are:
> 1) I am imagining the whole thing.

Jim :
No, you are thinking locally, and perhaps are blocking out the idea of a broader trend. During the depression days, there were industries and business segments that were indeed quite busy.
Farmers today cannot find good labor to pick apples and do the harvest.

Michael's list :
> 2) The Canadian market (or at least southwestern Ontario) is
>booming, but the rest of the world isn't. (Is this likely though?)

Jim :
Not likely. The Canadian market for industrial is *not* booming - except in some very narrow geographical and market areas.

Michael's list :
> 3) This decline is actually just a local US phenomenon, and isn't
affecting Canada or the rest of the world. This is not entirely impossible.

Jim :
In a world that is financially linked, that *is* impossible.

Michael continues:
>The structure of the economies of the US (which Mr. Pinto is looking at)
>and Canada (which I am looking at) are very different which means there
> is no reason why demand for any particular class of specialised products
> would necessarily be synchronised (or have any relation at all) between
> the two.

Jim :
The economies are different, but the underlying financial structure is the same. On my global "Industrial Automation Majors" list, there is no
Canadian based company. All Canadian majors are subsidiaries of the US, European and Japanese majors. *Oh yes!* there is a relationship between the two.

Michael continues (On a slightly different tack) :

> we have had custom equipment quoted for us by American companies
>and I have noticed that the price of equipment built in the US is much
> much higher than comparable equipment built here.

Jim :

Yes, because "custom equipment" is *always* quoted high, since it needs local assistance. Harking back to my article - quote :

"US overheads are high, by comparison. The Majors are moving to "turnkey services" and "systems integration", but cannot compete against local
labor-rates with knowledge that is often available locally. Projects are most often won on price, at shrinking margins. "

Michael :
> I have discovered that they have found it very difficult to compete
>with Canadian companies in terms of price for typical custom (one-off)
> machines ever since the American dollar rose so high.

Jim :
It has *nothing* to with the dollar value.
Custom (one off) projects are always lower priced locally, and avoided by foreign companies, since they always need local, on-the-job hand-holding.

Michael :
> 4) There is a major world wide decline in industry segments that I
>am not familiar with (e.g. process industries) that is masking growth in
>areas that I am familiar with.

Jim :

Yes, some segments are shrinking more than others.

Michael :
> 5) Price decreases are large enough that volume is growing (slowly)
>while sales value is declining. Inelastic markets might mean that lower
>prices would not necessarily increase sales volume significantly.

Jim :
The market is *not* elastic - lowering the price on a PLC by 50% would *not* increase the demand for the number of PLCs in a project.

Michael :
> 6) *World wide* sales declines are an illusion caused by
converting
>all sales into US dollars. Restating sales in say euros, yen,
(or even Canadian dollars?), might show a different picture.

Jim :
Nope ! It is *not* a currency problem! That is always a temporary shift in a global economy.

Michael :
> 7) Market declines are an illusion caused by measurment sampling error.
>If you base your overall sales estimates on sales figures from a small
>selection of companies, and those companies' sales *are* declining while
> the overall market is actually growing, your sales estimates will be
wrong.

Jim :

Sorry, Michael - marketing analysts and researchers are indeed familiar with the fundamentals of Math and Statistics.

Michael :

> Mr. Pinto - would you care to comment?

Jim :

Because this discussion has been going on for a while, I felt compelled to answer point by point.

Michael's summary :
>Particularly, I would like to know why industrial automation suppliers
>would have declining sales if their customers are so busy.
>What are we missing here?

Jim :
Why ? Please go back and re-read the article.
I have listed 6 major reasons for the decline.

As to the customers being busy - I know a lot of avocado farmers and apple-orchards that can't grow enough avocados and apples. So, would you like to be a farmer?

Michael, I appreciate and applaud your detailed thinking and your diligent list and questions. I too am an Engineer, by background and training. I hope I have helped!

Sincerely :

jim
----------/
Jim Pinto
email : [email protected]
web: www.JimPinto.com
San Diego, CA., USA
----------/
 
B
<clip> from Jim Pinto's message

Answer : Sorry, folks - there will not be a return to normal.
Please review again my comparison with "farming".

Quote from the original article (please read it) :
This is not an accident - it's part of the evolutionary process.
Farming, which once employed a major segment of the population,
now employs less than 2% in the US; there are few rich and
innovative American farmers. Similarly, manufacturing employed
over 35% in the US less than a century ago and this is steadily
reducing to about 15%
today.
<clip>


Jim: If you compare manufacturing against a century ago (1900) you should expect to see a decline in manufacturing. Much of today's manufacturing is going offshore to cheaper labor markets. To offset this, the demographics of the labor market has shifted to the service, data, and information industries, which are growing.
Secondly, there was really no "automation" industry in the 1900s. Manufacturing-yes, automation-no.

I haven't bothered to check it, but my guess is that manufacturing has increased from 1900 in Malaysia, Taiwan, Mexico, or most any other offshore country you would care to name, particularly in the last 35 years.

Michael Griffin's post raised some of the same comments I have, so I won't reiterate, but technology also drives down sales dollar volume, which I think can be misleading.

For example, What in the past may have taken a PLC, a communications module at each end of the link, etc. is now integrated into one package. I can buy a PC today for less money than I paid for my 286 in 1985, that includes a CD-RW, Ethernet card, modem, and DVD drive, floppy drive, more RAM, bigger hard drive, etc. In the past, many of these would have been options, and the price would have been much higher. Thus, more PC, more devices in it, less money.

Many functions are melded into a single package, which sells for less than the individual components would have. So is sales dollar
volume an accurate indicator, or just one of several indices that should be looked at in the big picture? Would units sold be a better indicator (e.g., number of starters, drives, etc.)?

Wouldn't this partly explain the reason the automation folks are busier than ever, as pointed out by Michael Griffin, and yet the dollar volume is declining? Or maybe there are just fewer people doing the same amount of work that makes us so busy?

Bruce Axtell
 
C
It is my opinion that the market is changing, whether or not it's declining is another story. I have seen many of my clients change their opinions about automation services. They once (20 yrs ago) saw automation as a magic black box and very few engineers were capable of perfoming this service. Many young engineers in the last 20 years went into this area of the business, say vs power engineering. As well, with control systems being implemented these days with relative ease due to new features like graphic oriented configuration programs and more standard architectures the work is not being seen as special as it has been generically in the past. What I see now by my cleints is that automation engineering is no more a specialty than mechanical engineering, it is starting to be treated like a commodity engineering service and billing rates are beginning to suffer from the premium billings we once enjoyed.

Craig M. Borel, P.E.
Department Manager
Instrument & Automation Department
RPM Engineering, Inc.
225-297-3015
[email protected]
 
M
> Quote from the original article (please read it) :
> This is not an accident - it's part of the evolutionary process.
> Farming, which once employed a major segment of the population,
> now employs less than 2% in the US; there are few rich and innovative
> American farmers. Similarly, manufacturing employed over 35% in the US
> less than a century ago and this is steadily reducing to
> about 15% today.

I wasn't going to comment on this, but since you felt it was important enough to draw extra attention to this. You seem to be suggesting that
that innovation makes people rich, or that farmers are not innovative. While I disagree with either premise, as a farmer I find the latter
offensive.

As far as the former, I find that to be in error as well. Along with innovation, several other things need to take place. For instance, patents or secrecy, so that you don't have to share your
innovations, and a market for high return from the innovation. Most of the innovative farmers share their innovations. When they try different practices, that they find to be successful, they share it with their neighbors, university research, and farm publications. They don't try to keep it for themselves.

Also, your statistics are loaded to give a false impression. While their are some innovative farmers, once they apply their innovations, they are no longer farmers. For example Murphy Farms came up with a system to mass produce hogs. They are no longer farmers, but a corporation. Or farmers selling seed come up with better seed varieties, become more successful, then there focus becomes more on producing seed, that business grows into a seed company. Thus many farmers with successful innovations become non-farmers, ie, not in the 2% any more.

Mark Blunier
Any opinions expressed in this message are not necessarily those of the company.
 
Automation List :

real-life, real-time example of the items covered in my article - Automation in Decline.

Here is an extract from today's financial news on
Rockwell (Allen-Bradley) :
-------/
Rockwell (NYSE: ROK - news) is a stock to avoid until the sales outlook for the firm's automation business improves. Today Rockwell joined a growing number of U.S. companies by warning
that earnings per share would be about $0.09 lower than expected at $3.55 for fiscal 2000, which ends September 30. The market responded
by sending the stock price down 20% by midmorning.
Rockwell also announced that it expects fiscal 2001 earnings per share to range between $3.10 and $3.20, substantially below the consensus estimate of $3.76. Accelerating weakness in its already soft U.S. automation business is to blame. Automation accounts for about 60% of sales, which were flat in 1998, fell 3% in 1999, and are expected to decline 5% in 2000.

The primary cause for the shortfall was delays in capital spending by automotive manufacturers. These capital projects are typically for assembly lines and are big-ticket items. During its conference call this morning, Rockwell management stated that it doesn't expect any improvement over the next six months, and it could not forecast with confidence beyond that period. Parts shortages and a declining euro also hurting sales and earnings.

Management stated that it does expect free cash flow to range between $450 million and $500 million in 2000, meeting or at least coming
close to its previous guidance of $500 million. Nonetheless, until the sales outlook improves for automation, Rockwell is a stock to avoid.
------------------/

My next article - Pinto's Pointers in the October issue of Industrial Controls Intelligence and Plant Systems Report, will be on the subject : "Companies in trouble".

Anyone who has news and views to share, please send !

Cheers:
jim
----------/
Jim Pinto
email : [email protected]
web: www.JimPinto.com
San Diego, CA., USA
----------/
 
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