mm460: Globalization: Rough seas ahead

August 6, 2008

dreamstime_5041579

© Lowerkase | Dreamstime.com

MUDGE’s Musings

Went after everyone’s favorite hateful big business, Wal-Mart, a couple of posts ago, as we explored their ham-fisted attempts at influencing presidential election politics.

Slate’s Daniel Gross, whom after all gets paid to write these things, did a nice job exploring the issue (but yr [justifiably] humble svt was there with typically cogent commentary the previous evening, thank you very much; my son sent me the Journal story well after I had harvested it into WindowsLiveWriter, in preparation for the post. Just setting the record straight! smile_regular ).

Lately, we’ve become intrigued as we learn that the mechanism that allows Wal-Mart to be Wal-Mart…

After all, these are the guys who have rolled back prices so relentlessly that they’ve rolled up entire industries and sent the jobs and our treasure to China, at the expense of zillions of decent paying blue collar jobs in the U.S.

globalism, is under ferocious attack.

nytimes

Shipping Costs Start to Crimp Globalization

By LARRY ROHTER | Published: August 3, 2008

…. Cheap oil, the lubricant of quick, inexpensive transportation links across the world, may not return anytime soon, upsetting the logic of diffuse global supply chains that treat geography as a footnote in the pursuit of lower wages. Rising concern about global warming, the reaction against lost jobs in rich countries, worries about food safety and security, and the collapse of world trade talks in Geneva last week also signal that political and environmental concerns may make the calculus of globalization far more complex.

“If we think about the Wal-Mart model, it is incredibly fuel-intensive at every stage, and at every one of those stages we are now seeing an inflation of the costs for boats, trucks, cars,” said Naomi Klein, the author of “The Shock Doctrine: The Rise of Disaster Capitalism.”

All of that consumer stuff that packs the shelves of Wal-Mart, and, to be fair, its competition, and all of the so-called big box stores: the toys, the apparel, the electronics and decorative accent pieces for your great room; all that stuff got to Wal-Mart in 40-foot shipping containers.

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mm457: From the guys who helped put China in business

August 3, 2008

dreamstime_2236000

© John Leaver | Dreamstime.com

MUDGE’s Musings

Used to be, if you were annoyed by the antics of big business, you’d pick on General Motors, world’s biggest, most arrogant, automobile manufacturer.

Difficult to be anything but sorry for GM these days, as they Hummer their way into business oblivion.

No, these days if you want to vent your spleen regarding unpleasant aspects of big business, Wal-Mart is your most appropriate target.

After all, these are the guys who have rolled back prices so relentlessly that they’ve rolled up entire industries and sent the jobs and our treasure to China, at the expense of zillions of decent paying blue collar jobs in the U.S.

And, as an employer, they are infamous for poor pay, are niggardly with benefits, and have fought an equally relentless battle against unionization, lest their workers have any real means of changing their working conditions.

Those friendly greeters? Just minimum wage retirees who are really posted at the door not to smile weakly at you, but rather to make sure that shoplifters exiting the store are caught.

Just to be certain that their own underpaid and cowed staff stays that way, they have begun a campaign, documented by the Wall Street Journal, no less, to warn their managers and supervisors that a prospective Democratic presidential administration endangers Wal-Mart’s non-union status.

wallstreetjournal

Wal-Mart Warns of Democratic Win

By ANN ZIMMERMAN and KRIS MAHER | August 1, 2008; Page A1

Wal-Mart Stores Inc. is mobilizing its store managers and department supervisors around the country to warn that if Democrats win power in November, they’ll likely change federal law to make it easier for workers to unionize companies — including Wal-Mart.

In recent weeks, thousands of Wal-Mart store managers and department heads have been summoned to mandatory meetings at which the retailer stresses the downside for workers if stores were to be unionized.

According to about a dozen Wal-Mart employees who attended such meetings in seven states, Wal-Mart executives claim that employees at unionized stores would have to pay hefty union dues while getting nothing in return, and may have to go on strike without compensation. Also, unionization could mean fewer jobs as labor costs rise.

Wal-Mart is far from the only employer that opposes the Employee Free Choice Act (co-sponsored, by the way, by a certain junior senator from Illinois), but as the largest private employer in the U.S. they certainly have the most to lose, and that largest body of private employees in the U.S. has the most to gain.

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mm403: Blast from the Past! No. 26

June 7, 2008

MUDGE’s Musings

We embark this weekend on a business trip to a conference in Boston. As conferences usually take up a great deal of uptime, without the downtime associated with a normal schedule, we will probably cover many of our daily blogging deadlines with Blasts from the Past!

The conference itself, designed to illuminate the social networking phenomena in the context of business and corporate conduct, may provide the opportunity to blog, as blogging in the corporate environment is one of its key topics. So we may be able to mix business interests and responsibilities with our avocation in this space. Should be interesting!

There’s most read, and then there’s favorite. This is a post which yr (justifiably) humble svt is, regrettably, but not regretfully, not at all humble about.

lhc250x46_thumb2

Blast from the Past!

A post we really, really loved to write, and read, and re-read…

From last summer, originally posted September 10, 2007 and originally titled “China – Two interesting aspects”.

MUDGE’S Musings

China is always in the news. Two stories from the past few days illuminate why in some interesting ways.

First, from the LA Times, a look at how we have become victim’s of our unlimited appetite for everyday low prices.

latimes_thumb2

Analysts expect prices in the U.S. to creep up as safety standards are reevaluated. Buyers and retailers may share the impact.

By Don Lee and Abigail Goldman
Los Angeles Times Staff Writers
September 9, 2007

SHANGHAI — Get ready for a new Chinese export: higher prices.

For years, American consumers have enjoyed falling prices for goods made in China thanks to relentless cost cutting by retailers such as Wal-Mart and Target.

But the spate of product recalls in recent months — Mattel announced another last week — has exposed deep fault lines in Chinese manufacturing. Manufacturers and analysts say some of the quality breakdowns are a result of financially strapped factories substituting materials or taking other shortcuts to cover higher operating costs.

Now, retailers that had largely dismissed Chinese suppliers’ complaints about the soaring cost of wages, energy and raw materials are preparing to pay manufacturers more to ensure better quality. By doing so, they hope to prevent recalls that hurt their bottom lines and reputations. But those added costs — on a host of items that include toys and frozen fish — mean either lower profits for retailers or higher prices for consumers.

“For American consumers, this big China sale over the last 20 years is over,” said Andy Xie, former Asia economist for Morgan Stanley, who works independently in Shanghai. “China’s cost is going up. They need to get used to it.”

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mm393: Blast from the Past! No. 23

May 27, 2008

MUDGE’s Musings

There’s most read, and then there’s favorite. This is a post which yr (justifiably) humble svt is, regrettably, but not regretfully, not at all humble about.

lhc250x46_thumb2

Blast from the Past!

A post we really, really loved to write, and read, and re-read…

From last summer, originally posted September 4, 2007, and originally titled “Attack of the Wal-Mart-istas”.

MUDGE’S Musings

I remain in a perpetual state of astonishment at the depth and breadth of simply fascinating commentary one finds on the web.

Here’s a wonderful entry from a newer member of the blogroll:

newsforreal

Maybe I stayed in the news business for too long after my radiation badge turned red. Maybe I’m suffering from Post-traumatic, Restless News Syndrome, or something. But I have this notion stuck in my head lately. It’s kind of like when I get an annoying tune stuck in my head, this notion pops up and up again, especially after I read the news.

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mm287: Attention Wal-Mart shoppers! China’s transportation infrastructure thanks you.

February 16, 2008

MUDGE’S Musings

Always useful, and often picking up on trends little noticed elsewhere, The Economist, best magazine on the planet, is at its typical best describing China’s massive infrastructure boom.

economist

China’s infrastructure splurge

Rushing on by road, rail and air

Feb 14th 2008 | BEIJING | From The Economist print edition

China’s race to build roads, railways and airports speeds ahead. Democracy, says an official, would sacrifice efficiency

“IT’S like approaching the Forbidden City, it’s absolutely incredible.” The adjective is one that Mouzhan Majidi, chief executive of Foster + Partners, liberally attaches to Beijing’s new airport terminal, designed by his British firm. The world’s largest, designed in the gently sinuous form of a Chinese dragon, it was planned and built in four years by an army of 50,000 workers. “The columns on the outside are red and you see them marching for miles and miles,” says Mr Majidi.

A little hyperbole is understandable. The terminal is 3km (1.8 miles) long. The floor space is 17% bigger than all the terminals at London’s Heathrow combined (including about-to-open Terminal Five). Chinese officials like the Forbidden City analogy. Just as the towering vermilion walls and golden roofs of the imperial palace inspire visitors with awe, China wants its golden-roofed terminal to impress those arriving for the Olympic games in August. Part of a $3.8 billion expansion, which included the opening of a third runway in October, it is due to open on February 29th, weeks ahead of schedule.

The numbers are mind-bending. Beijing’s airport is now the ninth busiest in the world. The longest sea-crossing bridge: 36km (22+ miles), six-lanes, between Shanghai and Ningbo (anyone else never hear before of Ningbo, much less that it’s important enough to build the longest bridge in the world to get there?).

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mm275: Republic of WalMartia?

February 4, 2008

MUDGE’S Musings

It’s a big target (as it were): Wal-Mart. The 800-lb. retailing gorilla that everyone (in a blue state) loves to hate.

This nanocorner of the ‘Sphere© has done its share of W-M disparagement: a tongue not-so-deep in cheek look at Wal-Mart’s function as armory to the red state militia; a look at rising prices in China, Wal-Mart’s sweatshop of choice; Wal-Mart’s key role in the rise of the compact fluorescent bulb; and most recently, a casual backhand at Wal-Mart in the context of another (supposed) 800-lb. gorilla in its business, Starbucks.

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mm241: The "Wal-Mart of Coffee?" Actually, no…

January 2, 2008

MUDGE’S Musings

Before Starbucks, yr (justifiably) humble svt never set foot in a coffeehouse. Especially in MUDGE’s college town, coffeehouses were scruffy places filled with scruffy grad student types, and not tremendously inviting as a result.

Then along came Big Green. Absolutely not scruffy. Took a while to learn the slightly twee lingo; still not entirely comfortable ordering my “5-shot venti Americano,” but I do, pretty regularly, and I am a coffeehouse convert as a result. Although, mainly Starbucks.

It’s a phenomenon of retailing: their stores have sprouted everywhere; in many big cities it’s not inconceivable to pass several while walking from one’s parking space to one’s downtown destination. Sometimes they’re even across the street from each other.

So, I always imagined that the invasion of Starbucks into an area meant that smaller chains, like Peet’s and Caribou, and locally owned independent shops, were a rapidly disappearing endangered species.

A recent story in Slate.com set me straight:

slate

Don’t Fear Starbucks

Why the franchise actually helps mom and pop coffeehouses.

By Taylor Clark | Posted Friday, Dec. 28, 2007, at 7:35 AM ET

The first time Herb Hyman spoke with the rep from Starbucks, in 1991, the life of his small business flashed before his eyes. For three decades, Hyman’s handful of Coffee Bean & Tea Leaf stores had been filling the caffeine needs of Los Angeles locals and the Hollywood elite: Johnny Carson had his own blend there; Jacques Cousteau arranged to have Hyman’s coffee care packages meet his ship at ports around the world; and Dirty Dozen leading man Lee Marvin often worked behind the counter with Hyman for fun. But when the word came down that the rising Seattle coffee juggernaut was plotting its raid on Los Angeles, Hyman feared his life’s work would be trampled underfoot. Starbucks even promised as much. “They just flat-out said, ‘If you don’t sell out to us, we’re going to surround your stores,’ ” Hyman recalled. “And lo and behold, that’s what happened—and it was the best thing that ever happened to us.”

Sure enough, when I began to think about it, I realized that, while Starbucks was expanding from the one store in the center of our town, to the five or six today, at least one of which has a drive-through window, there are more non-Starbucks coffeehouses in town than ever before, many of them having opened and are still open after Starbucks started to sprout like dandelions in our suburban lawns.

So what’s happened is, rather than clobber the independents and the smaller chains, in the manner of Wal-Mart (which has for all of its over 40 years eviscerated locally owned Main Street stores wherever they open) Starbucks has simply increased the market for everyone.

It’s the law of unintended consequences at its best, because they’d like nothing better than to squash their competition. Instead, Starbucks has built their own business big time, and made the world safe for coffee drinkers and smaller shops everywhere.

[Please click the link below for the complete article — but then please come on back!]

Why Starbucks actually helps mom and pop coffeehouses. – By Taylor Clark – Slate Magazine

Some caffeinated observations:

  • The most expensive short-term job I ever had was located in a downtown Chicago office building with, what else? a Starbucks in the lobby. Finished the three-month gig with seemingly less money than I started with!
  • Many members of MUDGE’s immediate family do not share his preference for Starbucks; most call it too strong or bitter, preferring, interestingly enough, Dunkin’ Donuts, for example. I find that particular coffee okay but bland.
  • An example of a thriving mom and pop coffeehouse is found in our son’s trendy neighborhood. It recently changed hands, and the energetic 2nd generation Americans running it are doing very good business, if one can believe anecdotal observations of the frequently crowded store. It’s just a quarter block east, and across the street, of a similarly busy Starbucks. A rising tide, indeed.
  • Of course the other thing you should know about your correspondent is that, fan though he is of Starbucks, most of the time these days (yes, even in the dead of winter) he prefers his caffeine carbonated and cold: DMD (Diet Mountain Dew). But Pepsi has not built friendly shops in which to sip a Dew while reading a newspaper, or connecting to the ‘Net. Go figure.

It’s it for now. Thanks,

–MUDGE

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