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May 2002: Volume 44, Number 5

What a Difference a Year Makes -- New Orleans, Indianapolis, Paris & Cuba
by Carlos David Mogollón, WC&P Executive Editor

A year ago, the grand experiment announced at the Water Quality Association convention in Orlando was American Water Services Inc.’s announcement of an agreement with EcoWater to supply it with ROs and softeners to market to its ratepayers.

Ah, what a difference a year makes. Reportedly, six weeks prior to the New Orleans convention, AWS -- a subsidiary of American Water Works Co. (bought by Germany’s RWE AG in January) -- discontinued the pilot project in Indianapolis where it was test marketing its POU/POE nationwide roll-out. Meanwhile, USFilter won the concession to run Indianapolis Water, recently re-purchased by the City of Indianapolis.

Commenting on the failure of AWS, a water utility serving suburban markets in the area, Bret Petty, of Indianapolis’ Aqua Systems, said, “I really think that although the formula is out there, it’s probably fair to say that it was missed in Indianapolis. When you try to offer consumers upgraded water, you have to realize it’s a consumer business, not a utility business.”

In addition, the announced sale of a USFilter Filtration and Separations Group to Pall Corp. and disclosure of its intention to sell Plymouth Products/Ametek raised a number of question marks at WQA as to what was going on at Vivendi. After all, we’ve been reading a lot about CEO Jean-Marie Messier and financial issues, especially since the company announced in early March it would write off $13 billion related to acquisitions for a $12 billion loss on 2001 results. Recent headlines include:
* "Vivendi's Messier to Face Shareholder Wrath," Reuters, April 22.
* "Vivendi Universal, Messier Mired in 'le fracas Francais'," Variety, April 21.
* "Vivendi Boss Cuts Debts, Protests Continue," Reuters, April 18.
* “Vivendi Universal Sells Trade Press Unit for E1.2 Billion,” Dow Jones, April 18.
* "Ousted TV Chief: Vivendi Board Worried By Messier's 'One-Man Show'," Dow Jones, April 17.
* “France in Uproar after Canal Plus Heads Roll,” Reuters, April 17.
* “French Press: Vivendi Eyes E1.7 Billion in Utility Stake Sale,” Dow Jones, April 11.
* “Vivendi Looking to Sell United Cinemas Stake: Media, Environmental Services Groups Seek to Cut Debt,” Financial Times, London, April 10.
* “Vivendi’s Mr. Universe: With little fanfare, Vivendi Universal CEO turned a hidebound French utility company into the world’s second largest media empire...,” Vanity Fair, April 2002.
* “A French CEO’s Taste for America is Hard to Swallow Back Home: Move to New York was Faux Pas for Vivendi’s Mr. Messier,” Wall Street Journal, March 18.
* “Vivendi hints may deconsolidate Environnement,” Reuters, March 6.
* “Vivendi’s Messier Seeks to Calm Investors,” Reuters, March 6.

In item No. 7 above, we find out Messier will step aside as CEO of Vivendi Environnement in place of a handpicked successor, Eric Licoys, and the larger company will cut its stake in VE from 63% to 49%. Hmm...

Another company making headlines recently was resin maker Purolite, of Philadelphia, whose top officers -- Don and Stefan Brodie, owners of Bro-Tech (dba Purolite), and marketing manager Jim Sabzali -- were convicted April 3 of violating the U.S. Trading with the Enemies Act by using foreign subsidiaries and distributors to skirt the U.S. Cuban embargo. Canadian newspapers, National Post and Globe & Mail, treat it as an “international incident” since Sabzali is a Canadian citizen and some of the charges stem from time he lived in Canada. They note Canada’s Foreign Extraterritorial Measures Act, passed in 1992, forbids Canadian companies from honoring the U.S. embargo. Of 77 total possible counts, the company lost on 43, Don Brodie lost on 33, Sabzali on 20, and Stevan Brodie lost on only a conspiracy charge. Purolite’s attorney couldn’t be reached for comment, but a source close to the case noted the number of charges deemed without merit were significant; it will be appealed and likely will wind up in a settlement with significant fines.

“If I had to say anything, it would be simply that I’m glad the messy part of this business is out of the way and I look forward to doing business with them in the future,” said Chubb Michaud, a longtime U.S. independent rep for the company from Los Angeles.

Ironically, less than a week after the Purolite verdict, the Bush Administration granted former U.S. President Jimmy Carter’s request to accept an invitation to visit Cuba.