Saturday, March 26, 2011

Opportunity to recover American jobs?

Recent news following the earthquake and tsunami in Japan (March 2011) has produced interesting business impacts. The following comments are not "Japan bashing" but are intended to provoke Americans to reevaluate priorities in terms of their shopping and for businesses, their production priorities.
When the freighters full of cargo where struck by the tsunami, countless millions of dollars of merchandise (Televisions, DVD players, automobiles, etc) were lost. When the ports will clear and when ships will be available to transport the goods is anybody's guess. In the meantime, factories in Japan have either been destroyed or damaged with many being forced to suspend production due to either internal conditions or the conditions generated by the power and living conditions. Now reports are surfacing that other manufacturers in other locations are beginning to suffer from lack of parts and supplies made in Japan. The impact of this disaster continues to widen.
Some examples:
A) Apple Computer reports that the glue used to hold iPads together has been impacted by the Japan earthquake and tsunami. They are reportedly seeking to find alternative suppliers that meet their standards and requirements.
B) Ford Motor Company has instructed dealers to temporarily not take orders for certain shades of black and red as the colors are produced in Japan and, yep you guessed it, are not available for an indefinite time.
C) News reports that Toyota dealers have raised their prices on Prius vehicles due to a shortage of supply.
D) Various other electronic manufacturers have had to cut production and as a result prices on those items have risen (not necessarily as a decision in Japan but more by suppliers and distribution people here.

Now would seem a good time for American manufacturers to regain some of the market share they have lost to Japan. Why can we not make the glue for iPads? Why can we not make the paint for Ford (and other facilities as well)? Why do we not make electronics in this country? (The last television make in North America was Curtis Mathis, made in Canada, which went out of business years ago.

The root of the problem (if there is to be a singular source) can be found in American greed. Americans want the cheapest price for a product. On the surface, who doesn't want the best price? But the best price comes at a price itself. As we bought goods made overseas at cheaper prices, we lost our jobs and manufacturing facilities as we shipped our jobs overseas. A basic tenant was ignored - "When we export our jobs overseas, we import their poverty". We have continued to buy foreign products (when other countries make exporting our goods to them difficult if not impossible) at the cost of our economy and our jobs. We want cheap televisions and now no television is made in our country and so it goes for other goods.

Who has not heard somebody complain about tech support representative from another country that could not speak English well or drove them insane with the "thank you very much" and repetition of any and all information stated? Recent news reports indicate that the Philippines now have more American jobs than India (well known for its IT tech support for companies like Dell Computer).

The problem now is that we aren't getting the cheap prices we wanted! Although temporarily (maybe) as products made in Japan become scarcer, prices are going up. We are already at the mercy of the middle east for oil (with gas skyrocketing due to recent middle east turmoil) and now a large majority of our goods are going up in prices due to shortages in production in Japan. We wanted cheap DVD players and televisions but now the prices are going up because they come primarily form a country hit by a natural disaster.

Here is the question - Why can't our paint companies make the paint Ford needs or the glue Apple needs? Is it so unique that we can't make it or is the problem it can't be made as cheaply? One, we aren't going to continue to see prices from Japan at the levels we have had in the past. Second, considering the unemployment in this country, why can't we stimulate the economy by manufacturing here? The problem is a double whammy, corporations have to satisfy stockholders (and their own paychecks) by producing their products at the lowest possible price; and consumers demand the lowest possible price. Forgotten in this is the fact that when a company lays of employees, they lay off people who buy their product. When Ford lays off employees, they lay off people that buy and promote their product.

We can make the best televisions (or anything else) in the world. We could make great paints and glues. We have the technological know how we just need companies willing to step up and do it; and we need consumers who will buy home grow local products. Remember that the cheapness of many products made overseas is done on the backs (figuratively) and at the cost of the health and in some cases the lives (literally) of workers overseas who have to live and work in conditions we would never consider or permit by law. Recently CNN carried a report about the 1911 NEW York Triangle fire that cost 146 lives due to working conditions. The question is, are well willing to make and buy at a fair price or will we continue to export out jobs, import their poverty, and buy at the cheapest price (and sometimes quality - ref drywall, dog food, etc. from the far east). WE CAN DO IT. WILL WE?

Monday, March 14, 2011

American Society's Lack of Digital Ethics - The Death of Brick and Mortar stores?

Some of us can remember before the World Wide Web (that's what www stands for, for those who didn't know). There was Prodigy, Compuserve and one other I forget. They were not connected. Then suddenly, www appeared and our lives began changing - more and more rapidly. The world shrank quicker and quicker as the web expanded. But unfortunately laws and ethics did not keep up. Today laws concerning the digital life are woefully behind the times and so are ethics. 
Today brick and mortar stores are rapidly becoming the showcase for on-line stores. Sometimes brick and mortar stores and on-line stores complement each other but other times they stand opposed to each other. 
In the case of banks, there is no "physical product" there are only services - loans, checking accounts, ATM cards, which do have a physical aspect but in the end they are non-physical services. As services, brick and mortar can compete effectively with on-line banks. On-line service can point to brick and mortar operations as needed and can reduce the need for brick and mortar without eliminating them.
Where physical products are involved, brick and mortar are at a disadvantage unless America develops a "digital ethic". Some examples: 
A) E-Readers did not sink Borders; the lack of American Digital Ethics was the larger player. Borders had various problems and all contributed to their bankruptcy and wherever the future takes them but e-readers were only a small part of the problem. The bigger issue they and many other face is the lack of a digital ethic in America. Witness the person who comes in with a Kindle e-reader, which they use because they have poor eyesight and can enlarge the print with his e-reader. They won't be able to buy or download any books from Borders because the Kindle does not use the widely accepted "e-Pub" standard. (at the present, Kindles can only download from Amazon, they cannot read the more widespread standard of "e-pub" books. Borders, Barnes & Noble, and Apple all use e-pub.). The person comes in asking questions and discussing how they hate shopping on-line for books. They like to look at the cover colors and turn the pages. (On-line stores offer only limited browsing of books.) The store clerks assists them and then they leave the store to go home and buy their books on line. E-books are cheaper because they don't require the facilities, space, and personnel support that brick and mortar books require. For e-books, you simply add another hard drive to the computer network and voila, more e-books are available. And the extra hard drives don't even have to be in the same location, spare hard drive space from other locations can be used. 
B) Electronics stores (especially camera stores) suffer the same issue. Go to any local electronics place, especially one that specializes in digital cameras. People come in and try out the cameras, examine the size of the bags and the layout of the pockets inside. And when their decision is made, they go home and buy the same product on-line at one of the well-known on-line stores. (If you are a camera person, you know the two I have in mind.) Electronic departments in stores like Target and Wal-Mart are not as aware of this as their workers tend to not have the personal investment in the store that "mom and pop" local stores have. That and they tend to stock the lower price end of products. The specialty stores will have the higher quality products. (Try buying a 200-400mm zoom lens for a digital camera at the aforementioned stores and you will see what I mean.) One large photo chain told me they do not want people browsing Brick and Mortar and then coming to them, they consider it unethical. Nice to see some integrity. That's why I use them. But when I have been in a brick and mortar camera store I always try to buy something to justify my time there. 
C) Car Dealers are just beginning to experience this ethical dilemma. A person comes in and test-drives a vehicle. They ask all sorts of questions. They come back and test drive some more. They come back with their spouses and test drive again. Then they go home and send out emails to a three state area soliciting prices on the vehicle of their choice. Then the dealer with a small building, little overhead, maybe only one salesperson, and one or two mechanics gets the bid with his low price. He doesn't worry about a long-term relationship with the customer, they live so far away they will probably never come back. If there are any issues with the vehicle, the customer will most likely be on the doorstep of the dealer they test drove first thing with a loud complain about service. The customer should at least include the test drive dealership on their email list. 
Is it unreasonable to expect people to spend in stores they shop in and use the resources of (If you operate a McDonald's think of the people that come in and use the restrooms and leave without buying food.)? No! Germany has an ethic that when I was last there that would address this issue. If you want to see an irritate store clerk, go in and ask a lot of questions about products in their store and then walk out without buying anything. They don't do that but the American visitors do. They don't mind you looking but if you take up their time, they expect you to buy something. 
Brick & Mortar stores cannot survive being a showcase for on-line stores. If the trend continues, we can simply close down the malls and turn them into on-line showcases with only one of each item for sale. You can see the color and inspect the texture but then you have to order from the on-line store at the local kiosk that is sure to be there and wait for delivery. 
Brick and mortar stores operate with facilities designed to make the shopping experience enjoyable and sale staffs that when trained properly can offer assistance finding the right items and offer recommendations.  (Remember buying a printer for your computer and finding out they didn't include the cable to connect to the computer?) 
Bottom line, if you shop at a brick and mortar, buy something while you are there. 


Tuesday, March 1, 2011

Rules of this blog

Not a lot of rules:
1) No over the top comments/responses about politics or religion - respect that we call come from diverse backgrounds. Respect each other and each others right to have differing views. 
2) No foul language comments/responses- this is to be a blog viewed by all ages.