Archive for August, 2009

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why save Greenlandic?

Monday 31 August, 2009

I read with interest this article in the Chicago Tribune Sunday section Saving world’s words by Jason George. The reason I’m highlighting this article is that Americans tend to minimize the importance of learning foreign languages because English is so predominant in the world today.  They refuse to localize their websites into different languages, yet expect foreign buyers to feel comfortable buying in a language that’s not their own.  Some would say, “Let foundering languages die.”  My response would be, to quote from the article, “language is much more than words-it’s our culture, our history.  It’s what connects people to one another.”  By failing to learn others’ languages & expecting others to communicate with us in our language, we are missing prime opportunities to learn about other cultures, which can make big differences in negotiating with foreigners.

In learning German, it occurred to me that there is a chicken & egg relationship between languages & how people think.  German is a very structured language, with sentence elements in specific positions, nouns taking certain forms, etc.  In turn, Germans are typically methodical & precise, a direct reflection of their language.  I don’t know if the language teaches them how to think or if how they think determines how they speak;  it just seems to me the 2 are inextricably linked.  In trying to learn French while working @ the Canadian consulate to work better with the Quebecers, the differences between French & German became apparent, just like the differences in people.  German for the most part is pronounced as it’s spelled.  French leaves a lot more open, just as the French are a lot more laissez faire than the Germans.

Americans need to learn foreign languages to address the world in its terms rather than expecting the world to accede to our terms.  It’s generally ethnocentric to assume that all businesspeople speak English well-some don’t.  It’s simply wrong to assume that intelligence is reflected by the ability to speak English, which Americans assume all the time.  There are many many foreign business people who don’t speak English very well, but do a great job of leading their local organizations.  Americans limit their opportunities to do business in places where they can’t speak the language.   Although other English-speaking countries can be a good place to start, citizens of those countries typically suffer from the same blinders that Americans do, missing opportunities in places where they don’t speak the language.  Languages provide insights into values & decision-making, which can be immensely helpful when dealing with foreigners.  Again, German reflects how the Germans think, so keeping that in mind when working with them makes things much easier.  Respect other languages by encouraging & learning them.

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Energy financing in Turkey

Friday 28 August, 2009

I attended this last minute presentation organized by Central Asian Productivity Center at the International Visitors Center by Hacettepe University‘s Prof. Dr. Hasan KAZDAGLI.  Here’s his presentation:   sunum chicago

And here’s what was not contained in the presentation:  Despite all of the oil flowing through Turkey, as a fast-growing country, it still has too little energy.  Turkey recently signed agreements with the European Union to transport oil through Austria via Nabuko, which will avoid transporting oil from Russia through Ukraine.  It’s already reached Tbilisi.  Turkey also recently signed an agreement with Russia to create a link on the Black Sea.  Turkey signed the Kyoto Protocol last year & are negotiating with the Russians to build a nuclear plant.  Turkey is the 2nd fastest growing energy market after China.  The Turkish gas market is no longer under state control.  Turkey has a goal of producing 2000 megawatts of wind power by the year 2020 & is offering special incentives for renewables.

Q&A

  • Asians, Germans, Italians, & others are investing in Turkey.
  • Human resources are strong in Turkey.  A law was passed 5 years ago granting tax exemptions to technoparks, resulting in 19 technoparks in Turkey, with 3 in the capital Ankara, which house 142 companies.  Turkey is home to 150 universities, many of which teach in English, which educate engineers, many of whom specialize in automotive.  1.5M apply to Turkish universities, but they only take the top 1% to maintain high quality.  200K graduate each year.
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US-China CEO matchmaking networking mixer

Monday 24 August, 2009

I checked out this US-China CEO matchmaking networking mixer hosted by MeetChinaBiz Here is Shawn He Yuxun’s presentation:  MCBC09s & here’s the presentation made by George Mui of the Minority Business Development Agency of the U.S. Department of Commerce Access to Global Economy China_final_8_13_2009 Unbeknownst to me, there was a program delivered earlier in the morning before I arrived in the afternoon, so I missed most of this content.  Normally I’d add my contribution, but soon after I arrived the networking portion of this event commenced.  There were tables set around the perimeter of the room where Chinese visitors would sit while local potential partners would rotate among them every 15 minutes. For the record, I do think it’s good that the US government is supporting minority businesses pursuing these kinds of opportunities.  On the other hand, it appeared as if there would be lots of visitors from China, but many were actually local representatives of Chinese companies.  I spoke with a few people who were disappointed they were forced to deal with an intermediary when they were under the impression they would be meeting Chinese businesspeople directly.

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railroad infrastructure in North America

Thursday 20 August, 2009

I attended this luncheon presentation PAY THE FREIGHT: RAIL INFRASTRUCTURE INVESTMENTS IN CANADA AND U.S. hosted by the Canadian Consulate General, Metropolitan Planning Council, & Union League Club of Chicago.  Here are the presentations the panel made:  Combined Presentations

Mary Sue Barrett, President of the Metropolitan Planning Council opened with few statistics:

  • freight is increasing 350% by 2020
  • 500 trains travel on 2800 miles of track every day
  • Transportation creates $2B in economic output & 70,000 jobs
  • all on a 19th century system.

US Representative fromWisconsin Tom Petri didn’t make a presentation, so I’ll summarize what he said here.  The Midwest-Canadian relationship is crucial.  Wisconsin exporters hip out of Montreal.  Baltimore & New York want that business, but are not cost-competitive.  Canadian railroads are now North/South in addition to East/West.  Statistics from WI. company Schneider Logistics indicate transportation costs dropping from 16% to 8.8% of GDP in past years, but there have been no savings since 2004.  China now invests 9% of its GDP into transportation, while Europe invests 5%.  China will spend $730B on railroads, which exceeds the capital expenditures of the US.  We’ve lost momuentum-increasing the gas tax is not sustainable.  We need to continue borrowing from the Chinese to pay for rebuilding our infrastructure.

Q&A

  • grade crossings are still a challenge for efficiencies, with big impacts on local communities as people wait @ crossings
  • Germany imposes a road tax implemented by satellite to pay for infrastructure because Poles would not pay for gas when delivering to Germany
  • it’s a big problem to muster political will in Canada-the private sector is 10 years behind.
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German M&A specialist on complex projects

Tuesday 18 August, 2009

I caught Kai Lucks presentation on the complexity of M&A @ the Alliance of Merger & Acquisition Advisors summer conference.  Kai was in charge of mergers & acquistions for Siemens AG for many years & is now the president of the German Federal M&A Association & CEO of the Merger Management Institute.  He declined my offer to post his presentation, so I’ll summarize:

Siemens invested 32B Euros in acquiring companies in energy/environment, health systems, & automation/control of industrial/public infrastructure over the last 10 years.

With the acquisitions of Dade Behring, Bayer Diagnostics, & DPC, Siemens created a world-leading medical diagnostics company.

Siemens has a structured/phased integration process:

  1. preparation/id key positions
  2. set goals
  3. integrate/transfer to line management
  4. benchmarking

Mechanical & control design will converge in the next 10 years.

Integration success is measured in 3 dimensions:

  1. customer financials
  2. milestones
  3. attrition rates

The acquisition of the Danish firm Bonus wind power offered superproportional growth by expanding to international markets.

M&A performance is the key challenge-big M&A performance is even weaker.

Siemens’ closed loop approach works like this:

  • strategic planning makes the business case in the preparatory phase
  • deal details & integration preparation are worked out during the transaction phase
  • contract management & implementation/controlling are installed in the implementation phase
  • business management transfers know-how back to strategic planning

Professional management can strongly improve results.

Knowledge/experience management of 12 drivers based on volume, complexity, & restructuring, is key to success:

  1. Sales volume-own unit
  2. sales volume-candidate
  3. own employees
  4. candidate employees
  5. countries
  6. locations
  7. businesses
  8. value chain
  9. improvement
  10. manufacturing heads reduction
  11. locations reduction
  12. cultural change

There are 4 M&A project types:

  1. acquisition only
  2. cost cutting
  3. complementary technology
  4. integrated acquisition/re-engineering

Acquisitions of Sylvania lamps, Westinghouse power generation systems, & Huntsville automotive components provided different examples of experience management.

Utilities & power generation are in opposite phases of the merger endgame (opening, scale, focus, balance/alliance).

In 2007:

  • Europe bought $35.8B in America
  • America bought $27B in Europe
  • Asia bought $9.6B in America
  • America bought $5B in Asia
  • Europe bought $.5B in Asia

My take:  it’s a shame Dr. Lucks chose not to allow his presentation to be published because he puts together some of the best presentations I’ve seen.  In some ways they are typically German, i.e. very structured & organized, but in many ways that’s a very good thing.

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international negotiation competition

Friday 14 August, 2009

I was lucky to be invited to the closing dinner of the International Negotiation Competition which was sponsored by the  Center for Advocacy & Dispute Resolution @ John Marshall Law School.  All of the participants & judges were there to witness the awards to the winners.  Competing teams came from 15 foreign countries, although the winners were from UC-Davis.  The judges seemed to be lawyers & law professors from in & around Chicago who specialise in negotiations, some in an international context.

The reason I’m writing about this is to pat the competing teams on the back.  Teams came from 11 countries where English is the commonly used language, (Australia, Canada, England/Wales, Hong Kong, India, Ireland, New Zealand, Northern Ireland, Singapore, South Africa, & the US).   However, teams from Denmark, Japan, Nigeria, Puerto Rico, & South Korea had to compete in English-imagine how hard it would be to negotiate in a language that’s not your own.  Pretty tough.  The Danes came in 2nd place, & they speak excellent English, so that’s not so great a surprise, but the Koreans came in 3rd, & I think that is a fine accomplishment.

In addition, the legal systems are different, to varying degrees, in every country.  Some are code law, some are common law, as it is here in the United States.  3 of the 5 goals of the conference encourage international collaboration:

  1. focus on international disputes/transactions
  2. meet students & lawyers from other countries
  3. it helps students become aware of & experience the special aspects of international legal negotiations, including differences in negotiating styles, ethical & social norms & business practices, as well as enhanced difficulties of cross-cultural communication.

I can’t encourage these enough  To travel to a foreign country & compete on local terms with locals is a very difficult task.

This competition travels to different sites each year (2008-London, 2007-Singapore, 2006-Orlando, 2005-Dublin, 2004-Paris, 2003-Calgary, 2002-London, 2001-Orange County, CA, 2000-New South Wales, AU, 1999-London, 1998-Malibu, CA), interestingly all but Paris, English-speaking countries.  I think they should mix that up a bit.  Non-English speakers have only won twice, Koreans in 2008 & Danes in 2004.  I wonder how much bias there is in favor of English-speakers & against non-English-speakers.

Regardless, I think this is a great competition & we should try to encourage more of these kinds of competitions in many other disciplines.  When I attended Thunderbird, upper-level classses offered real-life simulations in international finance while marketing classes took on actual global advertising & B2B marketing competitions on behalf of sponsoring firms.  There are no better learning activities to apply school-fed theory to the real world, literally.  We can’t get enough of them.  (special thanks to Patricia Gill)

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what’s new @ the WTO?

Wednesday 12 August, 2009

I munched @ lunch to this lecture WTO and International Trade Agreements:  Under Pressure in Light of a Global Economic Downturn @ John Marshall law school by Mark Nguyen of MDN Trade LLC Here’s his presentation WTO-Protectionism-Chicago-June30-09 & the handouts to go along with the presentation WTO-March09-Handouts

Here are some additional points he made not included in his presentation:

  • countries are trying to prevent “job leakage”
  • export restraints are the focus of high-tech companies
  • developed vs. developing country issues are arising
  • the decline in global output is the 1st in 60 years
  • because supply chains are globally integrated, we won’t see a return to the depression of the 1930’s, at least not @ that same level
  • Free Trade Agreements (FTA) have been more effective than the WTO since 1994
  • Dispute settlements are pretty straightforward:  9 months, with 3-4 months for appeals
  • in Europe, computer monitors were equated with TV’s which required higher tariffs
  • the US Fast Track process has expired
  • an FTA of Asia Pacific would include 21 countries
  • Despite no Doha agreement, the WTO still moves forward
  • China produces 60% of the coke required for making steel;  the price is higher outside of China than inside China, which results in an effective subsidy
  • China’s internet filtering is blatant protectionism with a lack of notification & transparency

Q&A

  • It’s critical to get Russia to join the WTO, but depends on the price of oil
  • Regional Trade Agreements get exceptions on enforcement provisions when they create more trade;  specific quotas can be attacked
  • don’t bring intellectual property to China;  the Chamber of Commerce is looking @ certification;  the government wants developers to turn over source code
  • look to Europe for approaches to carbon emissions;  if they are not part of the treaty, Brazil, China, & India will be penalized-if the US loses, it can lead to retaliation from China.