While many U.S. manufacturers are decamping to greener, and cheaper, pastures overseas, Bobcat, a division of Ingersoll-Rand Co. Ltd., has found advantages sticking close to its North Dakota roots to build the little machines that, among other things, are used to clean barns, dig dirt and plow snow. Bobcat has exploited its location to keep a finger on the pulse of its core market of small landscaping and construction contractors, helping it quickly develop and ship products. Also, the company’s rural setting, executives say, has bred the kind of culture where problems are solved with the can-do, make-do ethos of the farm.
“There are a lot of barriers any foreign producer has to overcome to give us a real challenge,” says Richard F. Pedtke, the president of Ingersoll-Rand’s compact vehicle division.
For example, the company usually can deliver any of the hundreds of attachments it sells for its machines to a customer within four days, a feat almost impossible and certainly costly for any company with long supply lines stretching overseas. And by keeping manufacturing, engineering, and marketing closely linked, with people in those roles sometimes living across the street from each other, the company is better able to anticipate how markets are shifting and find new applications for its machines, says Mr. Pedtke.
Category: Business
A Lesson from Europe on Healthcare
A few weeks ago, I wrote a column arguing that this country’s increased medical spending over the last half-century has, on the whole, been overwhelmingly worth it. Thanks to new treatments for everything from premature births to heart attacks, human life has continued to lengthen — defying expectations — even without major improvements in public health. Yet, strangely, we talk about medical spending as if it were nothing more than a drag on the economy, rather than an investment in the most important thing of all: our well-being.
I received about 500 e-mail responses from readers, and the most common reaction was a version of a simple question. “Why do Americans spend so much more than folks in most other developed countries while getting worse results?” as Sumati Eberstadt of East Greenwich, R.I., wrote.
In Greece, the government and individuals combine to spend about $2,300 per capita on health care each year, and the average life expectancy is 79 years. Canada, where the hospitals are probably cleaner, spends about $3,300, and people live to about 80. Here in the United States, we spend more than $6,000, yet life expectancy is just below 78.
Philanthropy from the Heart of America
In the last five years, though, something utterly unexpected has happened. The decline has stopped. More people are moving to Ord, the county seat, than leaving, and the county’s population is likely to show its first increase this decade since the 1920’s.
The economics of rural America have not really changed. If anything, the advantages that Chicago, Dallas, New York and other big cities have over Nebraska have only continued to grow. But Ord has finally figured out how to fight back.
It has hired a “business coach” to help teach local stores how to sell their goods over the Internet and to match up retiring shop owners with aspiring ones. Schoolchildren learn how to start their own little businesses — like the sixth-grade girl who made a video of the town’s history and sells it at school reunions — so they will not grow up to think the only job opportunities are at big companies in Omaha or St. Louis. Graduates of Ord High School who have moved elsewhere receive mailings telling them about job opportunities back in town.
Markets in Everything: 7:11
the Chicago White Sox] have just announced that for the next three seasons, their evening home games will begin at 7:11 p.m. instead of the customary 7:05 p.m. or 7:35 p.m. Why? Because 7-Eleven, the convenience store chain, is paying them $500,000 to do so.
Good News for Inexpensive Flights to Europe
IAG:
In a move bound to drive British Airways and its Irish CEO nuts, Ryanair has launched a surprise takeover bid for Aer Lingus. The deal values Aer Lingus at 1.48bn euros (1.9bn dollars). Predictably, the spin started immediately. “This offer represents a unique opportunity to form one strong airline group for Ireland and for European consumers. We will expand, enhance and upgrade the Aer Lingus operations,” said Ryanair Chief Executive Michael O’Leary in a statement. “This offer, if successful,means both companies will continue to operate separately and compete vigorously in the small number of routes on which we both operate, currently around 17 of the approximately 500 routes operated by the two airlines,” he added.
GM Janesville Plant History
GM’s Janesville, Wisc., Assembly plant has produced more than half a million trucks capable of running on corn-based E-85 ethanol. But back in 1919, farmers counted on the Janesville plant for another reason: Samson Model M tractors.
The Model M cost $445 and used a four-cylinder Northway engine with a disc-type clutch. Moving parts were enclosed and self-oiling, making them low maintenance. The Model M was advertised to be so simple that the toolbox only contained three wrenches.
Grove on the HP Morass
“Every time I see that a company that has departed from the … combined chairman-chief executive role go back” to combining the roles, Grove said, “I’m sorry to see that.”
. . . HP had split the roles of chairwoman and chief executive in February 2005, when Carly Fiorina was ousted by the board.
. . . Grove was in New York to speak at the Grove School of Engineering at the City College of New York. The school was named after Grove, following his $26 million donation to the school last year, the largest ever to the school.
Dependency Ratios
This relation between the number of people who aren’t of working age and the number of people who are is captured in the dependency ratio. In Ireland during the sixties, when contraception was illegal, there were ten people who were too old or too young to work for every fourteen people in a position to earn a paycheck. That meant that the country was spending a large percentage of its resources on caring for the young and the old. Last year, Ireland’s dependency ratio hit an all-time low: for every ten dependents, it had twenty-two people of working age. That change coincides precisely with the country’s extraordinary economic surge.
Kraft Foods (Oscar Meyer Parent) Spinoff?
Today’s meeting of Altria’s board may bring Kraft — which sells food carrying the Maxwell House, Nabisco and Oscar Mayer labels, among others — one step closer to its goal.
With the last major legal challenge over marketing practices by the tobacco industry having cleared two weeks ago, Altria’s 11-member board is likely to discuss the timing of a much-anticipated and imminent corporate overhaul. But Altria’s board is not expected to announce a Kraft spinoff after the meeting.
Wall Street analysts who follow Altria say they expect the company, which has been planning an overhaul since 2004, to take its time in making a final decision on the timing of what would be one of the largest tax-free corporate spinoffs.
Target’s “Popup” LA Store
Target is, of course, well known for persuading designers to turn their skills–and publicity-generating ability–to its mass market. The latest twist, as explained in this report is to open full-blown, but temporary, boutiques like this “pop up” Paul & Joe store on Melrose Place in L.A. My niece Rachel and I hit it on July 29, the day Moore’s story ran, and it was packed with women eager to buy discount-priced clothes in a non-discount environment.