Arthur Guinness Birthday 9/24/1725

Today is the birthday of Arthur Guinness. Those that are lucky enough to appreciate a pint, raise your glass and count yourself an honorary Irishman. While you are enjoying your pint, here is a great article in the WSJ on the merits of Guinness by author Colm Toibin. Cheers!

WSJ link

Buffet's Chinese suits

Warren Buffets love Chinese suits. According to the WSJ, Buffet even taped a testimonial that plays at the HQ of Trands suits. Italian industry is made up of relatively small factories that focus on a narrow segment such as water pumps. Chinese imports have placed the Italian manufacturing industry in a precarious position. I wonder what will happen to the Italian garment industry if Chinese suits reach a quality that has been traditionally been the domain of Italy? Well we will all be driving Chinese cars, why not wear suits made there too.

WSJ link

Obama's union problem

Since the unions threw all of their money behind Obama its now time to see some ROI. First tariffs on Chinese tires and now the paper industry. Right or wrong Obama is going to have a hard time balancing the divergent views of the unions and the benefits of free trade.

WSJ link

Cadbury's position in emerging markets

According to the WSJ, Cadbury has a large presence in Latin America and India. Kraft wants to use this presence as leverage to enter these countries in a major push for market share in the confectioner business. Hershey would be smart to make a push to acquire Cadbury in opposition to Kraft. With the iconic Hershey label and Cadbury's presence, the combined might of such a company would be a main competitor to Mars Chocolate.

WSJ.com link

Outsourcing to the US?

Too many short sighted CEO's see outsourcing as the panacea to drive down costs. Rethinking this strategy is Farouk Shami, CEO of a one billion dollar hair iron company. Citing counterfeiting problems and poor quality control, he is opening a plant to manufacture all of his company's production in TX. New Balance continues to assemble the majority of their shoes in MA. Of course how many NBA and NFL players endorse New Balance compared to Nike? Many times outsourcing brings problems with quality control or impacts company reputation, such as Dell's poor customer service scores. Once the decision to move some operations offshore takes into consideration factors other then monetary costs,the decision becomes more complex.

WSJ.com link

Mercury Marine employee concessions

The employees of Mercury Marine in WI choose to vote to give back many items that were in their expired contract. The one I saw that illustrated the new reality of business is how the workers with have a wage freeze for 7 years. With the cost of living increasing between 2-4% per year, the average line worker will be continuously facing a lower standard of living. The article mentions that the union choose to give in to company demands instead of losing their jobs entirely to either a non union plant in OK or a foreign country. Welcome to the new state of the world economy were the entity with the lowest labor cost has the competitive advantage, no matter the perceived benefits of the long term employees.

WSJ.com link

The value of benefits to competitivness

Read this article and see how the part time worker reacts when presented with the opportunity for 90% company paid health care premiums. They work harder to met the full time criteria with greater output. I don't see why companies are so short sighted when it come to creative methods of worker motivation such as this.

WSJ.com link