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March 31st and April 1st, 2009Mile High Industrial and Automation Conference Automation Economics in the Downturn Robert Dunlap

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Presentation on theme: "March 31st and April 1st, 2009Mile High Industrial and Automation Conference Automation Economics in the Downturn Robert Dunlap"— Presentation transcript:

1 March 31st and April 1st, 2009Mile High Industrial and Automation Conference Automation Economics in the Downturn Robert Dunlap com

2 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference Confusion happens NOW is the time to invest in automation!

3 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference What else is happening? BW 2/27: Jobs… dismal CSBJ 3/2: consumer spending uptick yahoo.com 3/2: Dow lowest since 96 CSBJ 3/3: 40 new jobs AP 3/5: Jobless claims drop AP 3/5: Factory orders fell for 6 th month CNN 3/6: Highest unemployment

4 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference 1. No more people AI and satellites No engineering grads HR Cannot give incentive Not a value adder Cheap lawyer 2/3 have no talent management

5 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference 1.HR and lawyers …not getting trapped by some recruiting formulas. You are playing to a lawyers weakness to ask him to make a business decision.

6 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference 2. Unions +428,000 union jobs in 2008 Government +0.5% in 2009 Manufacturing -3.9% …automation and computerization are "the enemies of the postal union." - Sam Anderson, EVP, APWU Local 1, 9/16/04

7 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference 2. Productivity?

8 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference 3. Infrastructure plan Demand rising Colorado to receive $2.8B stimulus $11B for (smart) Electrical grid Failures cost $150B/year $19.4B for water

9 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference 4. Automate for value Marketing in South Africa No money = no loyalty? 100% wrong GM made $ thru 1930s!

10 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference hits …automated systems and sensors, … promote quality and compliance...* Automating … saves on labor, newsprint, and overweight postage.* *sec.gov, 3/2/09

11 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference 5. Green is coming Carbon -83% 2005 to 2050 (!) Trade $13~$20/ton Gasoline +12 c/gal Consumer power bill +7% $150B for green Red Herring 3/2/09, BusinessWeek 3/5/09

12 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference 1. Intellectual capital Invest now - its cheap No innovations in a long time R&D = 1.8% of sales* People leaving the industry * sec.gov, 3/12/09

13 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference 2. Growth is coming Media sells emergencies Unemployment Natural rate 5% Germany 10% US 8% CO jobs -0.8% in 2009 Your customer will be ready

14 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference , 1937 or 1929? Dow The Depression became Great Cyclicals

15 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference 4. Information is valuable Reliability Council example $100B, $300B, $1 Trillion Security worsens in downturn Plug customer leaks Papers = 1 Products = 0 The 14-second test

16 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference 4. Information opportunities Protection Dashboards Informatics

17 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference 5. Understand user What youre not doing: Benefits Your products cash flows Their cost of quality Innovating production

18 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference SUPPORTING SLIDES FOLLOWING SLIDES TO BE USED FOR SUPPORT; RESPONSE TO QUESTIONS

19 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference Engineering Graduates

20 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference Not Enough Engr Grads At the same time, the United States is also falling behind in general STEM [Sci, Tech, Eng, Math] education. According to the American Society for Engineering Education, China will likely produce almost eight times the number of engineers than will graduate in the United States this year. Students in India are also studying science and engineering at an average rate of three times that of the students in the United States. [CMU]

21 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference Engineering Grads - $15MM?! Topeka State legislative leaders Tuesday announced the formation of a task force to address the shortage of engineering graduates in Kansas… Last year, the deans of the three engineering schools unveiled a five-year plan to increase the number of engineering graduates from 875 per year to 1,365 per year, an increase of 490 annually. The proposal was supported by industry. But the plan would cost an additional $15 million … shortage-engineer/

22 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference Brandeis – good example Lovers, Tyrants, and Other Enemies: Greek Tragedy from Aeschylus to Brecht Reggae Representation, Race and Nation The Renaissance: When France Became France

23 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference A bad union? Argumentum ad nauseum: proof by assertion Median teacher salary: $47,900 $47,900 * 40/36.5 * 12/9 = $69,990 Data from bls.gov retrieved 3/10/09; Manhattan Institute for Policy Research Jan 2007

24 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference Beta and Cyclicals CPN 0.00 GIS 0.26 XOM 0.46 SO 0.46 K 0.50 XEL 0.52 COP 1.18 GE 1.21 HON 1.45 FCX 2.21

25 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference Automation… what? design of photolithographic masks fare-collection systems spinning and cloth manufacturing case running back office metal anodization, vacuum metallization of plastic design of custom semiconductors customer shipping…replenish branch inventories

26 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference Automation… who? Annual report: Between 3/3/08 and 3/3/09: 8000+! Golfsmith – merchandise Thrifty Car Rental – ordering and deliv Oncor – 600,000 automated meters Mobile Mini – automated pallet racks Northwest Natural Gas – meter reading Olympic Steel, Roper Ind, UPS

27 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference An innovation Utilities are worried about renewables Automate weather trading, weather forecasting, hedging, dispatch

28 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference IP theft fm MES + Automation 1997: Last known year PRC made crank starts 2003: BMW licenses 3 and 5 to PRC 2005: PRC passes Germany in production 2007: PRC exports BS6 to Germany 90.1%: PRC (propaganda) literacy rate 2007: GM to increase PRC suppliers; executive sees no quality problems 2009: PRC forex res $1.946T Wikipedia, Car and Driver, The Economist, RAD, Reuters

29 March 31 st and April 1 st, 2009Mile High Industrial and Automation Conference NERC CIP: A challenge to mgmt Can you define SHA-1? Would you approve a product using MD- 5? How long does it take a logic bomb to deploy? Have you blocked *.cn packets? 1 day to get in nuke, 1 wk to control


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