Archive for the ‘Technology’ Category

The GT26 lives on with Ansaldo (for now)

June 21, 2016

I have previously expressed my doubts as to how long sequential combustion technology will continue for gas turbines after the technology has been transferred to Ansaldo Energia (as part of the acquisition of Alstom by GE).

Ansaldo has announced (in March this year) the sale of 2×2 GT26 machines as part of power islands for the Ibri and Sohar#3 combined cycle plants Oman.

Ansaldo Energia Switzerland has been awarded two contracts worth approximately 600 million Euros in total for the supply of major power plant equipment to two large IPP projects. The Ibri 1510 MW CCPP and Sohar III 1710 MW CCPP in the Sultanate of Oman are expected to be commissioned in early 2019. The Ibri and Sohar III CCPP IPP projects are developed by the sponsor consortium of Mitsui & Co. Ltd., ACWA – International Company for Water and Power Projects and DIDIC – Dhofar International Development and Investment Holding Company, following a simultaneous award of the two projects to the development consortium by Oman Power and Water Procurement Company SAOC of Oman earlier this month. The two power stations will operate and supply power under a PPA to the grid in the Sultanate of Oman. Ansaldo Energia will supply the main power train equipment components, including for each power plant, four of Ansaldo Energia’s newly acquired high-efficiency advanced GT26 class gas turbines, four heat recovery steam generators (HRSGs), two steam turbines and six turbo generators to SEPCOIII Electric Power Construction Cooperation of China (SEPCOIII), who will be responsible for engineering, procurement and construction (EPC) on a turnkey basis. Ansaldo Energia will also provide field services to SEPCOIII – under separate contracts – during the construction phase and long term maintenance services to the operator after commissioning. These projects mark Ansaldo Energia’s first success with its recently acquired and formerly Alstom owned GT26 gas turbine technology and will be one of the largest CCPP project awards in the Gulf region. Ansaldo Energia will certainly have a firm place the CCPP and IPP market where highly efficient, operationally flexible and reliable technology is required. With these two projects in execution in the region and Ansaldo Energia’s presence as a service provider in the Middle East area through Ansaldo Thomassen Gulf in Abu Dhabi, Ansaldo Energia’s position in the Gulf will be further strengthened. Juerg Schmidli, Ansaldo Energia Switzerland President, commented: “With its operating flexibility and high efficiency, the GT26 gas turbine will play a critical role in generating maximum project returns for our customer. This is the perfect start for our newly formed Company Ansaldo Energia Switzerland”.

I hope these machines from Baden/Birr will truly mean that Ansaldo has grabbed the sequential combustion ball and is running with it (and not that these are just machines already largely manufactured while under Alstom ownership and completed by Ansaldo).

What I still doubt is whether Ansaldo has the tradition, expertise and financial clout left to manage and implement any innovations. If they cannot, the Alstom version of the GT26 Ansaldo has acquired is already outdated. Especially since Siemens, GE and Mitsubishi have H-class machines in operation and are already moving on to H+ engines. GE’s HA-class machine (9HA) is operational in France for EdeF (62.22% claimed efficiency). The GT26 is still probably only at the G+ level and Ansaldo will need to get beyond the H-class efficiency level to be a realistic fourth player. If not the GT26 will be consigned – at best – to some niche markets. The 60Hz (including US) market and the GT24 are not available to Ansaldo and that does not help in the experience stakes.

How long it may take to get a commercial version of the next generation GT36 to market, or whether it will ever see the light of day, is an open question. I have a soft spot for sequential combustion and would like to see it continue. But I will stay pessimistic and remain doubtful that Ansaldo Energia has the wherewithal to remain a serious player with this technology.

And hope to be proved wrong.

Alstom GT26

Alstom GT26


 

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That iPhone the FBI (Israelis) cracked – “contains nothing of significance”

April 15, 2016

Much ado …. full of sound and fury … signifying nothing.

So, Syed Farook’s iPhone that Apple refused to unlock, which the FBI took Apple to court for, which was finally cracked by an Israeli company working for the FBI, contained nothing of any significance. Still, I suppose the FBI and Apple (and the Israeli security company Cellebrite) have all had their time strutting and fretting on the stage, and all publicity is good publicity.

But the FBI come out of this looking petty and silly.

CBS News: 

A law enforcement source tells CBS News that so far nothing of real significance has been found on the San Bernardino terrorist’s iPhone, which was unlocked by the FBI last month without the help of Apple.

It was stressed that the FBI continues to analyze the information on the cellphone seized in the investigation, senior investigative producer Pat Milton reports. Investigators spent months trying to gain access to data on the locked iPhone used by San Bernardino gunman Syed Rizwan Farook, believing that it might hold information on the plans or contacts of the attackers, who killed 14 people on December 2, 2015.

Apple was fighting a court order to assist the FBI in bypassing the phone’s security measures. On March 28, the FBI announced that it had managed to unlock the phone and was dropping the court fight with Apple.

The FBI has not disclosed what method it used to access the data on the iPhone but the method is believed to have been developed by a third party, a private entity, the government has refused to identify.

FBI Director James Comey said last week that the bureau has not decided whether to share details with Apple about how it hacked into Farook’s iPhone 5c. “If we tell Apple, they’re going to fix it and we’re back where we started,” Comey said. “As silly as it may sound, we may end up there. We just haven’t decided yet.”

As The Register points out the FBI were more interested in attacking Apple and actually did not expect to find anything. They probably always knew that Cellebrite could get into the phone but dinät reveal that to support their position in court:

The news will not come as much of a surprise to anyone who has followed the case: the phone in question was one of three used by Farook. It was his work phone and was owned by his employer, the health department.

His two personal phones were found by investigators, crushed and dumped in a trash can at his house. Since Farook had clearly gone to some trouble to destroy any digital evidence (he also smashed up hard drives and other digital media), the fact that the iPhone in question was recovered intact made it highly unlikely that it held anything of real value.

Regardless, the FBI used the existence of the phone and the shocking nature of the crime to wage a public war with Apple over encryption and access to electronic goods. Having mistakenly caused the phone’s cloud storage to be reset (some doubt it was a mistake), the FBI applied through the courts to force Apple to develop a way for it to pull all the information of the phone.

The court served an injunction but Apple refuse to honor it, claiming that the request effectively obliged it to break its own product’s security and would have implications far beyond the single phone.

Following a very public spat in which Apple refused to back down, and voices in Washington starting to criticize the FBI for trying to seek a legal precedent rather than solve a crime, the day before a legal hearing on the matter, the FBI suddenly announced it had found a third party that was able to grant it access to the phone’s data.


 

Israeli company cracks Apple iPhone for FBI

March 29, 2016

iphone seThe FBI has now dropped its lawsuit against Apple because they have managed to crack the encryption on the  iPhone of the San Bernardino gunman without Apple’s help. Clearly the Israeli company Cellebrite has succeeded where the FBI’s own experts had failed.

The question now becomes what Apple will do about this demonstrated vulnerability. Perhaps they have already eliminated the weakness in their new models after the iPhone 5S? Added to their latest fiasco with their OS 9.3 download, Apple “technology” is not riding very high right now.

The Verge:

Cellebrite, an Israeli mobile forensic software company, is reportedly helping the FBI get into Syed Farook’s device, according to reports from Reuters and Ynet.

The FBI “has been reportedly using the services of the Israeli-based company Cellebrite in its effort to break the protection on a terrorist’s locked iPhone, according to experts in the field familiar with the case,” Ynet reports. The Verge reached out to Cellebrite yesterday afternoon for comment and hasn’t yet heard back. ……. The company has a sole-source contract with the FBI that it signed in 2013 specifically to help with mobile forensics and data extraction, exactly the task presented by the San Bernardino case. …..

In its notice of intent to sole source, the FBI wrote: “Market research efforts have indicated that the Cellebrite UFED System is the only hand-held, cellular exploitation device worldwide that requires no PC or associated phone drivers.” It continued that the company supports “all major technologies (DMA, CDMA,GSM, IDEN) including smartphone operating systems and PDAs (Apple iPhone, Blackberry, Google Android, Microsoft Mobile, Palm, and Symbian) for over 95 percent of all handset models worldwide.”

………. experts speculate the attack is based on a NAND mirroring technique, which involves essentially copying the flash memory of the device so it can be restored after a lockscreen wipe. US Representative Darrel Issa directly asked FBI Director James Comey about the possibility of using this technique during a House Judiciary hearing last month. The bureau is now well aware of its existence, and there’s no reason to believe it won’t work on the iPhone 5C in question. Notably, this method will run into problems on phones with a Secure Enclave, ruling out any phones beyond the 5S.

UFED-Touch

UFED-Touch

Some of Cellebrite’s promotional material on their UFED:

Cellebrite’s UFED Pro Series

With mountains of data being created via mobile device applications daily – Facebook, Twitter, Kik, Snapchat, etc. – forensic examiners need quick and efficient ways to tap into rapidly expanding data sources when a situation demands. Our UFED Pro Series is designed for forensic examiners and investigators who require the most comprehensive, up-to-date mobile data extraction and decoding support available to handle the influx of new data sources.

UFED Ultimate

UFED Ultimate enables the physical, logical and file system extraction of all data and passwords – even deleted – from the widest range of mobile phones, portable GPS devices and tablets. The powerful combination of proprietary boot loaders, UFED Physical Analyzer, UFED Phone Detective and UFED Reader, enables advanced decoding, mobile phone detection, data analysis and reporting every time.


 

Remember Solar Impulse 2? Walking around the world would be faster

January 18, 2016

Remember all the hype last year?

The journey around the world started in March 2015 and was supposed to be completed in August 2015.

solar impulse 2 planned track

solar impulse 2 planned track

Leaving from Abu Dhabi they reached Hawaii in mid-July. But their batteries overheated and they are now stuck there till April 2016.  The flight is more hype than substance though there is some clever engineering and pilot endurance involved. It is supposed to be a flight which uses no fuel though reports that the batteries (when working) were recharged at every stop using grid power persist. What is not appreciated is the enormous support entourage that travels with Solar Impulse 2. Tony Thomas has an article about the “stranded monster” in The Spectator, and he points out:

To keep this gossamer confection airborne, an Ilyushin 76 strategic airlifter flies ahead with a blow-up hangar and all the high-tech servicing gear. Aviation buffs call the airlifter a ‘bad-ass’, not just because of its ugly nose and four droopy jets, but because its takeoffs are real Russian screamers. Once aloft, it burns eight tons of CO2-spewing avgas per hour.

This behemoth is accompanied by a   twin-turboprop ATR72 which can carry a support crew of up to 60, apart from the dozens left at Monaco mission control. The ATR burns a more modest tonne of fuel per 90 minutes.

Not quite ‘without using a drop of fuel’. It is “green delusionism” as Tony Thomas names it.

What is also worth noting is

This futuristic plane cruises at about the top speed of a postie’s bike, but can sometimes accelerate away to 90km/h.

Charitably assuming the plane does make it round the world in 18 months, that compares with other round-the-worlders such as:

  •  The Graf Zeppelin in 21 days in 1929.
  • Wiley Post in his Winnie Mae, in nine days in 1933
  • The Rutan Voyager, non-stop non-refuelled in nine days in 1986
  • Bertrand Piccard and Brian Jones by balloon in 20 days in 1999.
  • Solo yachter Francis Joyon, in 58 days in 2008, using that other clean fuel, wind.

Someone could walk the plane’s route (somehow) in two years, not much longer than the flight time.

The flight and the engineering involved for Solar Impulse 2 are not unimpressive. But there is not very much which demonstrates anything which is new about solar energy. The entire enterprise is really about battery technology rather than solar energy. And what it does show is that battery technology has still quite some way to go.

I do dislike the ridiculous hype and the manner in which the “politically correct” and the fame-seekers jump on board.


 

Russian Kogalymavia Flight 9268 investigation focuses on an engine explosion or the tail falling off

November 4, 2015

UPDATE! Apparently some US intelligence sources are saying that it could have been an IS bomb on the plane and David Cameron has stopped all UK flights to Sharm el-Sheih. I’m just a little sceptical since this news coincides handily with the visit of the Egyptian President to the UK and there is a fairly obvious political agenda. David Cameron is running scared of asking Parliament to vote on allowing strikes against IS. He needs to demonise them further (as if that was possible), before he plucks up his courage sufficiently to push for a vote in Parliament.


Kogalymavia Flight 9268 crashed in northern Sinai on 31st October 2015,  while travelling from  Sharm el-Sheikh to Saint Petersburg. All 224 on board were killed (217 passengers and 7 crew). The aircraft was an 18-year-old Airbus A321-231, # 663.

There were no explosive residues found, so it is unlikely to have been due to a terrorist bomb on board. It was flying so high (9,400m) that it is extremely unlikely that some terrorist or IS group – based in Egypt – had the wherewithal to have shot it down. Now it seems that the investigators are narrowing the cause to the tail, or an explosion in one of the two IAE V2533- A5 engines powering the A321 Airbus, or both.

Swedish Radio: The Egyptian accident investigators initial conclusion after analyzing the Russian aircraft black box, is that an engine may have exploded, according to several international media today. The search area for wreckage has also been expanded from 20 to 40 square kilometers.

It also seems from the debris that the tail broke off. This aircraft had had a previous accident where the tail was damaged and had to be repaired. Whether an engine explosion caused the tail to break off, followed by a cascading series of other events, or whether the tail fell off first and caused the engine to try and operate in some forbidden zones and then explode, will be surely something that will exercise the investigators.

CNNThe distance from the tail to the rest of the debris could be telling — especially because the tail was previously damaged, CNN aviation analyst Mary Schiavo said.

“To me, it says (the tail) exited the plane before (an) explosive event and before the fire engulfed the plane,” she said.

The same plane’s tail struck a runway while landing in Cairo in 2001 and required repair, according to the Aviation Safety Network, which tracks aircraft incidents. At the time, the aircraft was registered to the Lebanese carrier Middle East Airlines, registration records show.

Schiavo, a former inspector general for the U.S. Department of Transportation, said something could have gone wrong with the repair work after the tail strike. She said she once worked on a crash where a tail strike that had not been repaired well brought down a plane almost two decades later.

“A bad repair is like a ticking time bomb, because once it’s on the plane, it stays with the plane forever,” she said.

The engine manufacturers will be hoping that it was not an engine which exploded first and caused a whole series of catastrophic events. The V2500 is a two-shaft, high-bypass, turbofan engine which powers the Airbus A320 family among other aircraft and is manufactured by International Aero Engines which is a joint venture between Pratt and Whitney, Japan Aero Engine Corporation (JAEC) and Motoren- und Turbinen-Union (MTU).

(My earlier error now corrected — Rolls Royce is not now part of the JV having exited in 2012.)

IAE:

The V2500® turbofan is the most technologically advanced engine in its class. IAE’s shareholders collectively invest billions of dollars each year into the research and development of new technologies that are ultimately available to IAE.

Each IAE shareholder contributes an individual module to the V2500 engine, an arrangement that enables their engineering teams to focus on continuously refining their respective module.

  • Combustor and high-pressure turbine: Pratt & Whitney
  • High-pressure compressor: Pratt & Whitney Aero Engines International (A wholly owned subsidiary of Pratt & Whitney)
  • Fan and low-pressure compressor: JAEC
  • Low-pressure turbine: MTU

IAE’s employees are seconded from the shareholder companies across a range of business functions including sales, marketing, engineering and product support.

IAE V2500 engine

IAE V2500 engine

The V2500 first entered service in 1989 and comes in a number of models (V2500-A1, V2500-A5, V2500-D5, V2500-E5), producing between 22,000 and 33,000 lbs of thrust. It is currently used on Airbus A319, A320 and A321 Airbus Corporate Jets (ACJ), Boeing MD-90 and Embraer KC-390 aircraft.

It is early days yet for the investigation, but there is some relief that this was probably not a terrorist act. On the other hand, if it was due to an engine explosion, it could ground a lot of aircraft.

 

GE gets approval from the EC and Ansaldo gets Alstom GT technology

September 8, 2015

UPDATE:

More details are now emerging of what exactly will go to Ansaldo. It seems that Ansaldo will get PSM, technology for the GT26 and the GT36 (which does not exist yet) including the test facilities at Birr and the LTSA’s for 34 GT26s sold by Alstom. It is good that it is settled but the European Commission has not – in my opinion – got it quite right.

  1. The technology seems to be restricted to 50Hz technology (after all, all of Europe is 50Hz). So a current GT26 and its potential upgrades should – theoretically – be available from Ansaldo but not the GT24 (60 Hz). It is the US market (60 Hz) which has access to cheap gas and the 50Hz market will take a while and will be dependant on fracking taking off in Europe. Ansaldo will probably need to take all liabilities to get their first 2 or 3 GT26 engines placed. And even then finding a suitable utility customer to host the machines will pose a challenge.
  2. GE will face no competition in the US from an Ansaldo GT24 and probably Ansaldo is not permitted to enter 60 Hz markets except with engines they develop themselves.
  3. The development of the GT36 is a long way from being commercialised and the assumption by the EC that this development will be completed by Ansaldo is almost “pie in the sky”. Of course it is theoretically possible! A 60Hz GT34 is even less likely.
  4. The EC’s assumption that PSM will be able to service engines like the GE 9FA under Ansaldo ownership is flawed. It is one thing to have an Alstom owned PSM servicing such engines considering that Alstom was the main source of GE 9FA until 2000 (when they acquired the ABB gas turbine business), and quite another to have an Ansaldo owned PSM doing such service.

I suspect that GE and Alstom have talked down the difficulties that Ansaldo will face and the EC have bought the sales pitch. Or it could be that the EC does know that this commercialisation of the GT36 (and maybe even the production of the GT26) by Ansaldo will likely not happen, but it gives them a face saving way of approving the GE bid.

Money talks. And we need to bear in mind that GE pays only €300 million less which must now presumably come to Alstom from Ansaldo. Just €300 million as the price for the ongoing service business and the assets at the R &D facilities at Birr does not leave much over actually for the technology that has been purchased.

But

  1. does Ansaldo have the additional €500+ million that they will need to get a GT26 into production?
  2. And do they have another €2 billion (at least), along with the will and the capability, to bring a commercial GT36 into being??

PowerMag:

The commission’s in-depth review, which focused on markets for the sale and servicing of heavy-duty gas turbines operating at 50 Hz, revealed that a GE-Alstom merged entity would have accounted for more than 50% of the European Economic Area market.

It was also specifically concerned that the merger would have risked eliminating an important innovator. “The transaction as notified would have reduced customer choice, R&D [research and development] and innovation, with serious risks that certain Alstom heavy duty gas turbine models would be discontinued and that the newly developed and most advanced model (GT 36) would not be commercialised. This was of concern for many market participants, including major European power utilities,” the commission said.

The merger was approved on the condition that the parties offered to divest Alstom’s GT 26 and GT 36 turbine technology, existing upgrades and pipeline technology for future upgrades, a large number of Alstom R&D engineers, and two test facilities for the GT 26 and GT 36 turbine models in Birr, Switzerland.

The parties will also need to divest long-term servicing agreements for 34 GT 26 turbines recently sold by Alstom, and Alstom’s Power System Manufacturing (PSM) subsidiary. The commission was concerned that if GE absorbed PSM, it would have eliminated competition for the servicing of GE’s mature heavy-duty gas turbines (like its 9FA model) that are installed in existing plants. “As GE is the dominant player in this market and PSM its most significant potential competitor, this would have created a risk of higher prices and less innovation,” it said.

34 gas turbines is a small part of Alstom’s fleet but it may be enough to give Ansaldo a fighting chance of building up experience over – say – 5 years or so.

I remain of the opinion that this is a good deal for Alstom and GE. However, I also remain of the opinion that some 8,000 jobs of those being transferred from Alstom to GE or to Ansaldo will be at risk. Ansaldo surely has a chance for becoming one of the “big 4”. But they may have difficulty chewing or swallowing what they have just bitten off.

Another thought that occurs to me is that the EC process is itself flawed. The solution (divestment to Ansaldo), which has delayed the deal by a year, smacks more of ego and politics rather than protection of competition. The actual protection of competition achieved is minimal.

WSJ: ……. GE already manufactures gas turbines of corresponding size to the two Alstom models, and the company says it will retain licenses that will enable it to compete for business servicing turbines made by other manufacturers—an opportunity for future earnings growth.

The U.S. company will also divest the long-term servicing contracts for 34 turbines that have already been installed by Alstom. GE has said that Alstom’s servicing contracts were a key attraction of the deal, but a person close to the deal said the divested contracts amounted to only 4% of Alstom’s total installed base.

“I am glad that we can approve this transaction, which shows that Europe is open for business and that Europe-based technology can thrive and attract foreign investment,” Ms. Vestager said.


 

Well, the European Commission has given GE approval for the acquisition of Alstom’s power and grid businesses. But Ansaldo will now get Alstom’s large GT technology (it’s not clear to what extent), the testing facilities in Birr and some substantial service business. Whether Ansaldo actually gets the GT24 and GT 26 engines or just technology is not clear yet.

Previous posts: https://ktwop.com/tag/alstom/

Bloomberg:

As part of GE’s offer, Ansaldo will acquire Alstom’s technology for large and very large gas turbines. Alstom will also cede two test facilities for these turbine models in Birr, Switzerland, the EU said.

“Ansaldo will have a true fighting chance” of competing in the European market, Margrethe Vestager, the EU’s competition commissioner, told reporters in Strasbourg, France.

The Italian firm should gain a foothold in the maintenance business by taking over long-term contracts Alstom holds to service 34 previously-sold gas turbines, the commission said. Ansaldo will also acquire Alstom’s Power Systems Manufacturing unit which can service gas turbines of different makes, the regulator said.

With PSM going to Ansaldo, Shanghai (via PSM) gets a foothold in the US for 3rd party engine service – for whatever that may be worth. But I am not very hopeful. As an owner, I would not be very keen on asking an Ansaldo owned PSM to service a Siemens or a GE engine or even an old Westinghouse engine.

Good luck to Ansaldo anyway.

It will be interesting to see if Shanghai Electric can provide sufficient influence to make this work. Ansaldo on its own would have very little chance to make it, I think. It will still take them the best part of a decade and by then GE, Siemens and Mitsubishi would have moved on. I think the EC’s competition commissioner is fooling herself more than a little when she states that “Ansaldo will have a true fighting chance”. She is being far too optimistic, but maybe Shanghai can make the difference.

The Ec’s conditions does not have a great impact on the jobs that will be lost. This will stay at around 8,000 I think for GE. Of the jobs shifted to Ansaldo, I am not very optimistic.

A pity, because I think this marks the end of sequential combustion with a viable player.

I wouldn’t mind being proved wrong – but the probability is rather low.

But it’s good news for both Alstom and GE. For Ansaldo, it may be too much of a mouthful.

12% job losses to be expected post approval of GE – Alstom deal

September 4, 2015

Everything points to GE getting approval next week from the European Commission (deadline 11th September) for its acquisition of Alstom’s Power and Grid businesses – subject to some of the remedies proposed by GE to meet EC concerns about competition. The specific nature of the remedies have not been made public but rumours indicate that these comprise divestment of a service company and a facility in Switzerland to Ansaldo along with some IP, (see previous posts).

Around 65,000 Alstom employees would be transferred (though I am assuming that the JV’s being set-up (Grid, Renewable Power and Nuclear) are just a step along the way to complete divestment. Alstom can exit the Grid and Renewable Power businesses (50% minus one share) by September 2019 for an exit price not less than the acquisition price +3% per year. Alstom has windows for exit from the Nuclear JV (20% minus one share) “for 3 months after the 5th and 6th anniversaries of the joint venture” with an “exit price not to be lower than acquisition price +2% per year”. I assume that Alstom has a put option and that GE is obliged to buy – provided of course that no hidden liabilities show up in the businesses as happened when Alstom acquired ABB’s power generation business in 2000.

Alstom GE JVs (EGM Dec 2014)

Alstom GE JVs (EGM Dec 2014)

Alstom EGM presentation 2014-12-18

Alstom employees breakdown March 2014

Alstom employees breakdown March 2014

That there will be job losses among the 65,000 so transferred is inevitable. The logical conclusion would be that jobs in high-cost countries – except where they are also where the market is – would be most at risk. But as I saw through my years at ABB and Alstom, logic does not always apply. Both ABB and Alstom were (and probably still are) very Eurocentric. Quite often I saw under-utilisation in Europe being taken as the “cost to be avoided” rather than the minimising of total cost. Then, fully loaded jobs in low-cost countries were removed or transferred to Europe to increase loading in European facilities – but which only helped to increase total costs. Also, it was always so much cheaper (redundancy payments) to get rid of jobs in India or China or Indonesia than in France or Germany. So I do expect that similar “political preferences” will still apply for European jobs, though GE should be less inclined to fool themselves over the false economy of maintaining high-cost jobs for saving the “avoided cost” of under-utilisation. (A qualified, engineering job in Europe costs – or saves – at least twice as much as one in India or China after including for wages and all support facilities). On the other hand, GE now has to fulfill some political expectations from the French government and the European Commission. So jobs in France are protected and possibly also in Italy as well, but Eastern Europe and even some developing countries may well take a hit. Switzerland is quite exposed, both for cost and lack of political clout in the EU.

However, GE is also under pressure to implement its cost cutting program and the delay in the EC approval only adds to the pressure to make quick cuts.

ReutersGeneral Electric Co is expected to win regulatory approval next week for its purchase of the power equipment business of France’s Alstom, allowing the U.S. industrial conglomerate to finally carry out a major cost-cutting program 16 months after first announcing the deal. ……… 

In May, GE told investors it expects $3 billion in cost reductions over the next five years as it combines its operations with those of Alstom, more than double the previous target when the deal was first announced in April 2014.

GE has also projected the deal would add 15 to 20 cents per share to earnings in 2018, or nearly 10 percent of GE’s overall profit expected that year by Wall Street, according to Thomson Reuters.  

To hit those goals, GE will consolidate manufacturing operations, cut duplicated overheads, and make savings on purchasing expenses, according to GE presentations on the deal. But to gain the blessing of the French government last year, GE committed to add 1,000 jobs in the country, possibly handcuffing the conglomerate’s ability to reap savings from Alstom’s home base.

My (entirely speculative) reasoning suggests that GE must reduce this 65,000 employees from Alstom by around 12% quickly – say over 12 – 18 months. GE should certainly be able to reduce headcount globally by around 8,000. That will give a saving of only around €500 million annually (€800 million if all the job cuts were in Europe) and further rationalisation will still be needed if GE is to meet its target of $3 billion cost reduction in 5 years. (A $3 billion annual cost reduction is massive. If it was all to be found only by job reductions it would mean around 30,000 jobs).

Over 1,200 of these jobs could go as a consequence of the “remedies” proposed by GE and the consequent divestments to Ansaldo. Around 1,000 of these jobs in Switzerland will likely transfer to Ansaldo and then perhaps around 600 will disappear completely. I note that around 3,000 of the 65,000 jobs transferred are for shared and common services (IT, support facilities, legal and the like). I would be quite surprised if GE could not find sufficient synergies with their existing staff in these areas, and cut at least 1,500 of these jobs. Between 6 and 7,000 of the jobs transferred would be in the US where GE is already very well represented. Again, I would be quite surprised if GE could not find at least 1,000 jobs in the US which were effectively duplicates. Some duplicate manufacturing facilities would also need to be rationalised (Poland? China? Italy?).

It is only my speculation but I could see the initial 8,000 jobs to be reduced consisting of (as an example),

  1. 1,000 in Switzerland divested to Ansaldo
  2. 200 in other locations (service business) divested to Ansaldo
  3. 1,500 reduction in central and shared services
  4. 1,000 jobs rationalisation in the US
  5. 1,000 manufacturing and engineering jobs in duplicated facilities
  6. plus a 5% personnel reduction across the board

There will be much pain in the short-term. I have been through the process myself on more than 6 occasions (downsizing or acquiring or being acquired), and it is the handling of people which is by far the biggest challenge. While it will be of benefit to both Alstom and GE in the long-term (to their investors, their continuing employees and to their customers), that is not much comfort to those who lose their jobs.

Windows 10 arrived – some good, some pretty bad

August 17, 2015

So my Windows 10 arrived. It took a couple of hours and certainly the Start Menu is a happy return.

windows 10

I have disabled most of the MS intrusions I can on Settings. But not everything is working. And there is still too much rubbish with their “tiles”.

  • Too many logins and verification of accounts – and they are intrusive enough.
  • My back-up drive (external) is totally confused and all backup attempts by Windows have failed so far.
  • All Apps that I try to get at the Store are stuck in some “pending” limbo.
  • Microsoft keeps trying – unsuccessfully – to download additional features to my pc.
  • The card games available are pathetic.
  • I had some difficulty in finding some of my old programs (now called Apps) but they were all there. Some needed to get updates. Theyb are still programs to me.
  • This “file explorer” seems to be inferior.
  • Calendar does not work
  • Maps are pretty inferior – I’m back to Google Maps and Google Earth.

On the plus side the upgrade was relatively painless – just a little time consuming. After some of the scare stories about the difficulties of avoiding Edge, I found it was no great difficulty to stay with Google Chrome. I have looked at Edge, but only very superficially and don’t immediately see any advantages for me. I have no idea what Cortana does or could do for me and I am not going to miss it very much. It seems to boot a little faster – but not by much. But a very pleasant surprise is that my mobile broadband connection is – for some unknown reason – is some 50% or more faster than it was. However the download has absorbed – directly or indirectly – some 7 GB of additional data transfer (judging from my normal usage compared to the last 8 days).

I shall give Microsoft some time to get their Windows 10 bugs sorted out and the fixes downloaded before making any “final” judgement.

But nothing so far has changed my mind that when this pc eventually dies I shall replace it with an iMac.

 

imac 27

EC conditions for GE’s acquisition of Alstom will probably sacrifice Swiss jobs

August 14, 2015

UPDATE! 14th August

Reuters reports “exclusively” – and no doubt from anonymous EU bureaucrats as their sources – that the EC is set to approve the GE/ Alstom deal. The EC decision will be announced by 11th September. The report suggests that GE was prepared to accept the divestment of PSM and of a “facility” in Switzerland. That probably consists of some or all of the gas turbine R & D operations at Baden/Birr. The precise scope of the GE concessions are not yet revealed.

The French government, is probably not too perturbed by what happens to Swiss jobs or to PSM jobs in the US. And the price to be paid by Ansaldo probably compensates for most of the reduction that Alstom has accepted in the price to be paid by GE. In fact Alstom, the French government and Bouygues are all probably quite relieved to now see their way clear to financial closure.

Alstom management will also be quite glad to get rid of the difficult task of controlling “fortress” Baden. Whether GE for part, and the Italians or the Chinese for the rest, are up to that task is another matter.


Ansaldo (with Shanghai Electric) has emerged as the unlikely saviour of the gas turbine R & D tradition at Baden/Birr in Switzerland. But whether under GE ownership or in some hive-off to Ansaldo, it is only logical that many jobs in Switzerland would shift either to France or to Italy. One estimate puts the job losses to be expected in Baden to be around 600. I would expect the number to be very much larger. As far as the European Commision is concerned they may be making the calculation that more jobs will shift to Italy with Ansaldo ownership than would have shifted to France under GE ownership.

Job losses in Switzerland, of course, will not weigh very heavy with the EC in any case, and especially not if they were to shift to France or Italy. The EC may be calculating that Ansaldo could manage and run an R & D facility at Baden. I am not very optimistic about Ansaldo’s ability to be a technology owner. Shanghai Electric is more credible for that. My personal opinion is that Ansaldo has not the management strength or the R & D traditions to be able to manage an R&D program in Switzerland. (I note that even after a wholesale influx of French personnel, Alstom had its difficulties to manage Baden). On the other hand, any jobs which shift from the long and rich R & D traditions of Baden to Genoa will effectively be R & D which comes to an end. If the focus of development of an “Ansaldo” sequential combustion engine shifts to Italy, I would go so far as to forecast that it will never happen.

If this focus shifts to Shanghai instead, it will take a very long time but the development will eventually happen. With Shanghai Electric providing the “deep pockets” for Ansaldo, I suspect that jobs shifting to Italy will only be as a stop along the way to China.

HandelsZeitung:

Alstom Switzerland: 600 jobs in the balance

General Electric wants the energy division of Alstom.This could have a major impact on the Swiss workforce. Unions say that up to ten percent of the people have to go.

……. According to reports, GE will therefore sell its gas turbine business – the heart of Alstom Switzerland. The buyer would be the publicly listed energy company Ansaldo, a subsidiary of the Italian industrial group Finmeccanica. “Ansaldo is expected to shift the business to Genoa,” says a trade unionist. 

………… On 11 September, the Commission will announce a decision. “The closing of the deal in the second half of 2015 remains our goal,” said GE spokesman Bernd Eitel. 

For the EC, sacrificing Swiss jobs ostensibly for the benefit of any EU country is probably positive. But what about sacrificing Swiss jobs and an R & D tradition for the benefit of Shanghai?

Disclaimer: I should note that I own a few shares in GE and in Alstom but not enough to influence even my own opinions. I own no shares in “Baden” but I have a huge respect and admiration for the R & D work done at Baden as BBC and then as ABB and even later under Alstom ownership. Baden has been less impressive as a role-model for good management practice.

Rolls Royce leads Finnish project to develop autonomous (drone) ships

August 8, 2015

After flying drones and the coming of driverless cars it is the turn of autonomous ships. The Finnish Funding Agency for Technology and Innovation (Tekes) is funding an €6.6 million project called the Advanced Autonomous Waterborne Applications Initiative, which Rolls-Royce has been appointed to lead. The project aims to produce the specification and preliminary designs for the next generation of advanced ship solutions – the unmanned, “drone” cargo ship.

drone ship 1 Rolls Royce

drone ship 1 Rolls Royce

RR Press Release:

…… The project will run until the end of 2017 and will pave the way for solutions – designed to validate the project’s research. The project will combine the expertise of some of Finland’s top academic researchers from Tampere University of Technology; VTT Technical Research Centre of Finland Ltd; Åbo Akademi University; Aalto University; the University of Turku; and leading members of the maritime cluster including Rolls-Royce, NAPA, Deltamarin, DNV GL and Inmarsat.

Rauli Hulkkonen, Tekes, Chief Advisor, said: “This project is a fantastic opportunity to establish the Finnish maritime cluster as the world leader in maritime remote control technology.

Esa Jokioinen, Rolls-Royce, Head of Blue Ocean Team, said: “Rolls-Royce has extensive experience of successfully coordinating multi-disciplinary teams developing complex technologies. We bring a world leading range of capabilities in the marine market to the project including vessel design, the integration of complex systems and the supply and support of power and propulsion equipment. We are excited to be taking the first concrete steps towards making remote controlled and autonomous ship applications a reality. 

The wide ranging project will look at research carried out to date before exploring the business case for autonomous applications, the safety and security implications of designing and operating remotely operated ships, the legal and regulatory implications and the existence and readiness of a supplier network able to deliver commercially applicable products in the short to medium term. The technological work stream, which will be led by Rolls-Royce, will encompass the implications of  remote control and autonomy of ships for propulsion, deck machinery and automation and control, using, where possible, established technology for rapid commercialisation.

The Rolls-Royce Blue Ocean team is responsible for research and development of future maritime technologies and focuses on disruptive game-changing innovations. By combining new technologies with new approaches to ship design and system integration, the team aims to reduce operational costs, minimise emissions and enhance the earning capability of vessels. The team has developed a range of autonomous ship concepts as well as innovative designs for various ship types.

An autonomous tanker -- image rolls royce

An autonomous tanker — image rolls royce

Robot ships are currently illegal and the whole maritime regulatory environment would need to be changed to suit. If driverless cars become a reality by 2020, then there is no reason why robot fleets of cargo ships could not be in use by 2030. Bureaucracy will probably be a bigger barrier than technology.

robot fleet image rolls royce

robot fleet image rolls royce


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