The Manufacturing Spectrum: Ariens & BMW

Two interesting articles today reflect polar opposites in the manufacturing world, first up – Wisconsin’s Ariens: Timothy Aeppel:

Daniel Ariens’s biggest concern right now isn’t the financial crisis. It’s getting his hands on snowblower engines.

The chief executive of Ariens Co., a maker of mowers and snowblowers, got a curt email last month from the company that for decades supplied engines for his line of snow machines, telling him they’re halting production in 60 days — essentially cutting off motors at the peak of his season. A host of problems hobbled that supplier, including the loss of a huge customer and problems obtaining crucial parts, such as starters, from the engine maker’s own supply base.

“I’m quite sure we have other suppliers that won’t make it through this cycle,” says the 50-year-old Mr. Ariens.

This highlights a grim reality now dawning across the U.S. economy. Deep problems existed long before the meltdown on Wall Street and won’t be fixed by the government’s injection of taxpayer money into the nation’s banks. Even if the credit crunch eases, as now appears to be happening, companies such as Ariens are bracing for a painful recession and taking steps to survive it.

Car sales and industrial production have plunged, consumer confidence has wilted, and companies have accelerated layoffs. Manufacturing, particularly autos and machinery, is leading the way down. Exports can’t be expected to cushion the impact because the slowdown is global.

Dan Neil channels Karl Marx & Leon Trotsky while tooling around in the latest BMW 750Li near Chemnitz:

My driving partner and I were in the vicinity of Chemnitz, a somewhat dire little city in the former East Germany known for its alcoholism and an enormous monument to Karl Marx. Naturally, we had to see it.

“Bitte, kennen Sie, wo ist der grossen Kopf vom Karl Marx?” we asked passersby.

The former East Germans, standing in chilly drizzle, were delighted to help the capitalist running dogs in their gigantic limousine, a 2009 BMW 750Li. They pointed us down one of the main streets — Lumpenprolitariatstrasse, maybe? — and there it was: A huge, glowering stone bust of the German political philosopher, about the size of a FEMA trailer. Now there, there’s a redistributionist.

I have an Ariens snowblower.

The Power of One

A few years ago, I had an opportunity to hear “her deepness” Sylvia Earle speak. She included this short video in her presentation – “the Power of One“.
Earle emphasized the opportunities we all have to change the world. I recalled her talk while visiting with Hal Herron recently. Herron, of Riverton, Wyoming has been adding outdoor art to his home town in an interesting way.
Museums often create large banners to promote an exhibit. Herron sought out these banners after a showing is complete. He pays for shipping to Riverton and places them around the community for all to enjoy. Fascinating. He forwarded two photos, seen below:



Bill Perkin’s full page New York Times ad in today’s paper is another illustration of the “Power of One”.

Perkins approach requires a certain size checkbook, of course 🙂
All of which reminds me of the “two greatest commandments”.

“The Era of Leverage is Over”

Gillian Tett:

A few years ago, senior officials at the Bank for International Settlements started ringing alarm bells about the scale of leverage that was quietly building up in the financial system. Back then, though, it was fantastically hard to get American policymakers – let alone bankers – to listen.
In the go-go days of the credit bubble, Washington policymakers blithely assumed that the Western financial system had plenty of capital to cope with any potential risks. Consequently, as one former BIS official admits: “Worrying about leverage wasn’t fashionable at all – no one wanted to hear.”
Fast-forward a couple of years and, my, how those Western financiers are having to eat humble pie (even to the point of accepting a helping hand from the once-ailing Japanese). After all, the events of the past year have now made it patently – horrifically – obvious that the Western banking system has become dangerously undercapitalised in recent years, to the point where even the Federal Reserve is having to shore up its defences.
Moreover, it is now also clear that Western policymakers are belatedly trying to correct this state of affairs. The days when high leverage, mega bonuses and wacky instruments were equated with financial virility have gone; instead a more humble, back-to-basics and slim-line approach is what investors are demanding. Thus, deleveraging is now all the rage – in whatever form it might take.

Ken Burns’ Latest: National Parks

Christopher Reynolds:

It’s too early for civilians. As dawn’s first light falls on the jagged peaks, creeps down the dwindling glaciers and glides across glass-faced Swiftcurrent Lake, most of the tourists in the Many Glacier Hotel are still snoozing.
But down at water’s edge, three early risers huddle around a camera. One of the guys, leaning on a tripod and waiting for the clouds to arrange themselves over the jagged peaks, has a Beatles haircut, the build of a shortstop and a face you’ve seen before somewhere.
Perhaps during pledge week.
“I want more of the color,” he says, peering through a viewfinder. “OK, I’m doing it.” And the film rolls.
Yes, it’s Ken Burns, solemn PBS documentarian of the Civil War, jazz, baseball, Frank Lloyd Wright, Mark Twain, Congress, the Brooklyn Bridge, and more than a few other American characters and institutions. Beside him stand cinematographer Buddy Squires and writer Dayton Duncan. Upstairs in the hotel, Burns’ wife and 3-year-old are sleeping.

Related: Yellowstone Sunrise VR Scene and Waterton Lakes National Park

Open Records Guerrilla

Nathan Halverson:

But if you want to download and save those laws to your computer, forget it.
The state claims copyright to those laws. It dictates how you can access and distribute them — and therefore how much you’ll have to pay for print or digital copies.
It forbids people from storing or distributing its laws without consent.
That doesn’t sit well with Carl Malamud, a Sebastopol resident with an impressive track record of pushing for digital access to public information. He wants California — and every other federal, state and local agency — to drop their copyright claims on law, contending it will pave the way for innovators to create new ways of searching and presenting laws.
“When it comes to the law, the courts have always said there can be no copyright because people are obligated to know what it says,” Malamud said. “Ignorance of the law is no excuse in court.”
Malamud is spoiling for a major legal fight.

Former housemates John Mackey and Kip Tindell talk about poker, retailing, and the limitations of shareholder capitalism

Justin Fox:

My column in this week’s Time is about John Mackey, the CEO and co-founder of Whole Foods Market, and Kip Tindell, the CEO and co-founder of the Container Store, and their shared belief that corporations perform a lot better over time if their executives focus more on employees and customers than on shareholders.
Mackey and Tindell go way back–they shared a house in Austin with three friends one year in the mid-1970s as they worked their way through the University of Texas on the eight-year plan. They’ve recently begun hanging out together a bit, and when I met Tindell at a National Retail Federation event in New York late last year, he invited me to come down to Texas to talk to the two of them. So I did. We met at Whole Foods’ headquarters in Austin, which is perched atop the chain’s flagship store, and we talked, and talked. Tindell is stereotypical laid-back, slow-talking Texan. Mackey is a not so stereotypical hyper, fast-talking Texan. But they seemed to get along pretty well. As for me, I mostly just stayed out of the way.
What follows is an edited transcript of the conversation. I cut some stuff out, moved a few passages around, and removed a lot of “uhs” and “you knows” (mine as well as theirs). Beyond that it’s a pretty faithful representation of what was said. It’s pretty long, too. But most educational.

The Coming Boom in Medical Travel

The Economist:

HEALTH care has long seemed one of the most local of all industries. Yet beneath the bandages, globalisation is thriving. The outsourcing of record keeping and the reading of X-rays is already a multi-billion-dollar business. The recruitment of doctors and nurses from the developing world by rich countries is also common, if controversial. The next growth area for the industry is the flow of patients in the other direction–known as “medical tourism”–which is on the threshold of a dramatic boom.
Tens of millions of middle-class Americans are uninsured or underinsured and soaring health costs are pushing them and cost-conscious employers and insurers to look abroad for savings (see article). At the same time the best hospitals in Asia and Latin America now rival or surpass many hospitals in the rich world for safety and quality. On one estimate, Americans can save 85% by shopping around and the number who will travel for care is due to rocket from under 1m last year to 10m by 2012–by which time it will deprive American hospitals of some $160 billion of annual business.

An Update on Eclipse Aviation

James Wallace:

‘As a self-described “aviation nut,” Vern Raburn ? the former software executive and one of the early employees of Microsoft who remains a close friend of Bill Gates ? was well aware of a famous saying in the aviation industry: The way to make a small fortune is to start with a big fortune.
The charismatic, high-tech whiz raised at least a billion dollars from investors, including Gates, who were willing to hitch a ride on his dream that Eclipse Aviation, the company Raburn founded in 1998, could produce light and inexpensive six-seat jets (a pilot and five passengers) that would become an air-taxi service for the masses.
But last week, while Raburn was at the famed Oshkosh air show, where his friend and actor John Travolta was promoting prompting Eclipse Aviation, Raburn was ousted by his board, leaving questions about not only the future of the company but about the legacy of a computer industry pioneer who believed he could draw on software development background to transform general aviation.

Nassim Nicholas Taleb: the prophet of boom and doom

Bryan Appleyard:

“You have to worry about things you can do something about. I worry about people not being there and I want to make them aware.” We should be mistrustful of knowledge. It is bad for us. Give a bookie 10 pieces of information about a race and he’ll pick his horses. Give him 50 and his picks will be no better, but he will, fatally, be more confident.
We should be ecologically conservative – global warming may or may not be happening but why pollute the planet? – and probablistically conservative. The latter, however, has its limits. Nobody, not even Taleb, can live the sceptical life all the time – “It’s an art, it’s hard work.” So he doesn’t worry about crossing the road and doesn’t lock his front door – “I can’t start getting paranoid about that stuff.” His wife locks it, however.
He believes in aristocratic – though not, he insists, elitist – values: elegance of manner and mind, grace under pressure, which is why you must shave before being executed. He believes in the Mediterranean way of talking and listening. One piece of advice he gives everybody is: go to lots of parties and listen, you might learn something by exposing yourself to black swans.
I ask him what he thinks are the primary human virtues, and eventually he comes up with magnanimity – punish your enemies but don’t bear grudges; compassion – fairness always trumps efficiency; courage – very few people have this; and tenacity – tinker until it works for you.