Sprinkler System Mishap Causes $10 Million Damage at Phoenix Library – Warnings Ignored

December 20, 2017

11/17/17

FacilitiesNet

A corroded metal fire sprinkler pipe burst this summer, causing an estimated $10 million damage to the main public library in Phoenix and closing the building until next summer.

Phoenix officials learned the hard way recently that it’s not sufficient to merely inspect fire sprinkler systems; any problems found during those inspections must be fixed.

Inspectors had noted in writing since 2014 that the 22-year-old pipe, which was made of black steel, was corroded and had pinhole leaks, but officials did not replace it or fix the problem. That led to a disaster on July 15 when a storm blew dust into the Burton Barr Central Library in downtown Phoenix and the fire prevention system sensors mistook it for smoke.

When a pre-action fire sprinkler on the fifth floor activated, the corroded pipe burst under the pressure, flooding that floor and ones below. The water damaged or destroyed more than 6,000 books and shut down the library for repairs until at least next June, according to reports.

According to published reports, an outside inspection company had warned of leaks in the system and suggested repairs, such as replacing the corroded pipe or installing a new system, but the work was never done.

Repercussions for failing to prevent the disaster have been swift. Phoenix fired three city employees, demoted two and suspended another. According to the city, those workers knew, or should have known, about leaks in the sprinkler system dating back to 2008, but failed to address the danger.

Corrosion is an ever-present problem with metal pipes of almost every kind.

Corrosion was listed by FM Approvals as the fourth-most common cause of sprinkler leakage losses from 2001-15, behind freezing, mechanical injury and defective equipment. The German fire safety firm VdS has reported that 73 percent of dry systems have significant corrosion issues at 12.5 years old and 35 percent of wet systems have significant corrosion issues at 25 years of age.

Original story can be found here: http://www.facilitiesnet.com/site/pressreleases/Sprinkler-Pipe-Fails-Floods-Phoenix-Library–40173

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Fire Suppression Company Scam

November 7, 2017

10/19/17

By Jesse Jones
KIRO 7

It appears that the fire protection company Red Safety is feeling the heat, again, from fire chiefs for its sales practices.

“For me it’s disheartening,” said Maple Valley Fire Chief Aaron Tyerman.

Tyerman says one of the company’s employees misrepresented themselves as being part of the fire department at a community event.

Red Safety was invited to a potential customer’s home.

“He let the company into his home and realized after about ten minutes that this isn’t the Maple Valley Fire Department,” said Tyerman. “Then the high-pressure sales tactics started and that’s when he got really uncomfortable.”

Tyerman said after the salesman left, the community member then called the police.

“He said I just really feel violated by the whole thing, that’s really disconcerting to me,” said Tyerman.

This is not new. I first told you about Red Safety’s sales practices in May.

I reported that Fire Chiefs from East Pierce County to Shoreline have voiced their concerns to the company.

Captian Kyle Ohashi from the Puget Sound Regional Fire Authority told me about troubling complaints from residents in his district.

“They had a salesperson come to the door. They turned down that sales person but were concerned for their neighbors also being solicited. So when they went outside they found one of the sales people on their property with a drill in their hand clearly trespassing, uninvited,” said Ohashi.

One of the owners of Red Safety is a real firefighter named Jared Olin with Renton Regional Fire Authority.

Last year, Olin apologized to East Pierce Fire and Rescue Chief Bud Backer for “the mis-representation of your fire department that was caused by a member of Red Safety.”

Tyerman said he had previously spoken with Olin along with other chiefs about the company’s actions.

“To have somebody who is confronted with an issue, who tells you to their face, yeah, i’m going to change my business practices, I want things to be better,” said Tyerman. “And then nothing changes.”

In a response to the Maple Valley incident, Olin said “…we make clear to our salespeople that they should not represent themselves as fire code enforcers or that they represent any fire department. Any report of misrepresentation will be dealt with immediately, which was the case with the Maple Valley complaint.”

Tyerman says he had no problem with Red Safety trying to make a buck, it’s how it’s done that fans the flames of concern.

“The trust and respect with the community is all we have, if we lose that and that gets violated that’s very impactful to us and other community members” said Tyerman.

Jared Olin declined my request for an on-camera interview.

If anyone comes to your door and says they are a firefighter, they will have a badge, I.D. and a well-marked vehicle.


DowDuPont Likely to Return as Much as 30% over the Next Year

October 30, 2017

10/21/17

By Jack Hough
Barron’s

Remember the chief executive with the birthday-party ice sculpture of Michelangelo’s David urinating vodka? That was Dennis Kozlowski, who nearly ran Tyco International into the ground.

The story has a happy ending, not so much for Kozlowski-who did eight years in prison for grand larceny, conspiracy, and fraud-but for investors who bet on his successor. Edward Breen stabilized, slimmed down, and split up Tyco during the decade ended 2012, and made a return of over 700% for shareholders in the process. (He also earned, fair and square, an exit package worth more than Kozlowski had looted.)

Breen’s past success is newly relevant, because today he heads the world’s largest chemical company, DowDuPont (ticker: DWDP), which was formed by an August merger. DowDuPont is no Tyco-it needs restructuring, not resuscitation-so Breen is unlikely to deliver anything close to his past returns. Even so, the shares look likely to return a healthy 15% to 30% over the next year, including dividends.

One similarity between the two companies is that DowDuPont is, just as Tyco was back then, the product of decades of rampant deal making. There are plenty of examples of companies that have bought their way to prosperity, but these are the exceptions, not the rule. Academics who have studied the matter have found that, on average, acquisitions tend to beget subpar returns, and spinoffs, handsome ones.

That makes intuitive sense. Managers who do big takeovers tout the synergies they will unlock, but some have a hidden motivation: the desire to run larger companies. Those who do spinoffs shrink their empires. Presumably, they have solid financial reasons for doing so.

At Tyco, Breen started with a massive debt load and a shattered stock valuation. He slashed costs and used some of the money to pay down debt, while investing some in growth projects. He also left a trail of spinoffs. There’s a medical-products company that’s now part of Medtronic (MDT); an electronics maker now called TE Connectivity (TEL); and ADT, which was bought last year by Apollo Global Management and merged into security concern Protection One. (The rest of Tyco is now Johnson Controls International [JCI] after a reverse merger last year.)

BREEN COMES TO DOWDUPONT via DuPont, where he was named CEO two years ago and had been cutting costs. The combined company has announced a plan to split into three separately traded businesses.

The materials-science division will include packaging, industrial and infrastructure products, coatings, and more. Yearly sales there are pegged at about $40 billion and profit margin, over 20%, based on operating Ebitda, or earnings from continuing operations before interest, taxes, depreciation, and amortization. Specialty products, including ones for the electronics, medical, oil and drug industries, are expected to bring in sales of $21 billion with a 25% margin. And agricultural products, including seeds and weed- and bug-killers, will bring in about $14 billion in sales, with margins over 15%.

DowDuPont says it can cut $3 billion from yearly costs and add $1 billion to revenues by combining sales efforts. “Breen tends to underpromise and overdeliver,” says John Maloney, chief executive at M&R Capital Management, which oversees $525 million, mostly for individuals, families, and estates. Maloney held Tyco shares under Breen and now expects to profit with DowDuPont, especially given what he calls Breen’s knack for making good investments. “You want a CEO who will feed the flowers and starve the weeds,” he says. “I don’t think the revenue upside is factored in by anyone.”

The math on falling costs, meanwhile, bodes well for patient shareholders. DowDuPont could spend $3.5 billion to make the changes necessary to secure that $3 billion a year in savings, according to JPMorgan analyst Jeffrey Zekauskas. It is likely to bear the last of these costs before the end of 2019. That means free cash flow will be understated at first and swell thereafter. Zekauskas predicts $4.10 a share in free cash next year and $5.55 in 2019.

That gives shares, recently $71, a free cash yield of 7.8% based on the 2019 forecast. The average Standard & Poor’s 500 company has a free cash yield of about 5%. A rise in the stock price to Zekauskas’ price target of $80 over the next year would put the 2019 free cash yield at a still-attractive 6.9%. That would work out to a 15% return, including dividends.

However, the pending breakup, which DowDuPont expects to complete within 18 months, makes things more interesting. Investors tend to demand high free cash yields from commodity companies, like the materials portion of DowDuPont, but are willing to settle for lower yields on specialty and agricultural products, given the high margins of the former and the scarcity value of the latter. For example, specialty player Praxair (PX) has a forward free cash yield below 4%, and seed giant Monsanto (MON)—which has agreed to a buyout by Bayer (BAYN.Germany)—is under 5%. Putting DowDuPont at a blended 6% free cash yield in a year results in a share price of $92, notes Zekauskas. That works out to a gain of 30%, plus the 2.6% dividend yield.

Those aren’t post-Kozlowski Tyco returns, but then, DowDuPont comes with a drama-free balance sheet. If anything, analysts complain that the company owes too little. If it wanted to come up to a more typical leverage ratio, it could raise $20 billion. That’s 12% of its stock market value—enough for a big stock buyback or a doozy of a dividend.

The original story can be found here: http://www.barrons.com/articles/dowdupont-buy-it-ahead-of-the-breakup-1508554090


FSSA Webinar Series: CO2 Applications and Safety Considerations, Nov. 9 – Register Today!

October 27, 2017

The Fire Suppression Systems Association (FSSA) will be hosting its next webinar on: CO2 Applications and Safety Considerations, presented by Tom Wysocki, FSSA Technical Director.

CO2 Applications and Safety Considerations
Thursday, November 9, 2017
12:00 p.m. – 1:00 p.m. EST

Description:

This webinar will provide an overview of the use of carbon dioxide fire extinguishing systems in various industrial/commercial applications such as metal working, coal handling, power generation, food processing, etc. The historical safety and effectiveness of carbon dioxide systems will be examined together with modern-day safety features required for carbon dioxide fire extinguishing systems.

Click here to register and here for more info from FSSA’s website!

FSSA webinars are open to members and non-members. We encourage you to share this information with industry friends and colleagues.

About the Presenter:

Tom Wysocki, FSSA Technical Director
Tom Wysocki currently serves as the Technical Director for the Fire Suppression Systems Association (FSSA). Wysocki is also President and Senior Technical Consultant at Guardian Services Inc. (GSI) a fire protection consulting firm serving manufacturers, installers, and end users of fire protection systems. He has developed, designed, installed and maintained a wide range of fire protection systems including water based systems, industrial dry chemical, foam, Halon, carbon dioxide, and clean agents. Typical applications include commercial kitchens, data centers, manufacturing facilities, oil and gas facilities, marine vessels, and both fossil and nuclear power plants.
Wysocki is a member of numerous NFPA technical committees including NFPA 12, NFPA 12A, NFPA 75 and NFPA 2001 and is a Professional Member of the Society of Fire Protection Engineers.


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September 29, 2017


Is it Time to Start Destroying Halon?

September 28, 2017


United Tech Nears Deal to Buy Rockwell Collins for More Than $20 Billion

August 29, 2017

A worker assembles a circuit board used in a LCD screen for Boeing aircraft at the Rockwell Collins production facility in Manchester, Iowa, in 2016. United Technologies is nearing a deal to buy Rockwell for more than $20 billion, a tie-up that would create one of the world’s biggest aircraft-equipment makers. Photo: Daniel Acker/Bloomberg News

8/29/17

By Dana Mattioli, Joann S. Lublin and David Benoit
The Wall Street Journal

United Technologies Corp. is nearing a deal to buy Rockwell Collins Inc. for more than $20 billion, a tie-up that would create one of the world’s biggest aircraft-equipment makers.

The companies are discussing a per-share price for Rockwell of $140 or less and could come to an agreement as soon as this weekend, according to people familiar with the situation. Rockwell shares closed at $127.99 Monday, giving the company a market value of $20.8 billion.

As with all acquisition talks, it is possible they could hit a snag and not result in a deal, or the expected price could change.

The deal would boost United Technologies’ business supplying Boeing Co. and Airbus SE as the aerospace industry ramps up for a new generation of jets. The company already owns one of the world’s biggest jet-engine makers, Pratt & Whitney, part of an aerospace division that also makes parts such as wheels and landing gear.

Rockwell specializes in cockpit displays and communications systems for passenger jets and military programs. In April, the Cedar Rapids, Iowa, company closed its roughly $6 billion acquisition of B/E Aerospace Inc., a maker of plane seats and interiors.

Since word of the talks surfaced this month, several analysts have said they don’t expect significant antitrust issues given United Technologies and Rockwell make different airplane parts. But airplane manufacturers might voice concerns about any consolidation among their suppliers. Boeing and Airbus have also been nudging their way into aftermarket business to capture some of the profit from selling and servicing parts—putting them on a collision course with suppliers.

The possibility of a United Technologies deal for Rockwell caught some analysts by surprise. In June, United Technologies Chief Executive Greg Hayes told analysts the Farmington, Conn., company was looking to spend roughly $1 billion on acquisitions this year. It had about $7 billion in cash.

“As far as bigger M&A, it’s something we always look at, but I am reluctant to go out and pay some of the prices that we see today,” Mr. Hayes said at the Paris Air Show.

United Technologies has a market value of about $92 billion. Last year, the industrial giant, which also makes Carrier climate control systems and Otis elevators, rebuffed unsolicited takeover approaches from Honeywell International Inc.

— Thomas Gryta contributed to this article.

Original article can be found here: https://www.wsj.com/article_email/united-technologies-nears-deal-to-buy-rockwell-collins-for-more-than-20-billion-1504019858-lMyQjAxMTI3MjI2OTcyNDk2Wj/