Don’t do business in the USA

All my life, I’ve had this impression of America as a nation of competent, ‘can do’ super capitalists, a people relentless in the pursuit of profit. I guess you can say I’m an Americo-phile. Maybe the last one. But for the second time this year, I’m very disappointed by this country.

It’s because of this business trip. Here’s what’s wrong this time. First, just setting it up took months. A visiting C.O.O. met us in Vancouver and sold us on the idea of launching a partnership with them in NYC. He told us about a client base of 5,000 per month. Our business has huge margins, so 5,000 potential clients – even if it translates into only 50 or 100 actual clients – are worth close to a million dollars per year. That may not sound like much if you’re IBM, but to us, it’s good money.

So I contacted the C.O.O. to set up the appointment. No response. I tried again and again, and went through side channels and nothing. Barely a week before the original meeting was to occur, I’m sent to another person in their company, who agrees to finally meet me. So I get down there to Wall Street to find – well, nothing. Nothing done on their side. Long story, short, after changing locations twice I find out that the potential base isn’t 5,000 per month, but 300.

I’m furious at that. But not surprised – as I said above, this is the second time in six months that I’ve been completely screwed over in America.

My last trip here, I met another large company and we spent two hours working out a side deal, and after getting it all put down on paper – they haven’t delivered. They never return emails on time, don’t respond to urgent requests, and sit and do nothing while we send them business. I’ve re-explained the terms of our agreement to them at least 5 times, but they won’t let it sink into their thick heads.

What a bloody waste of time. Many of the people I’ve been dealing with in the US are lazy, they lie, and they are mortally disorganized. After doing business in Italy, Switzerland, France, Britain, Canada and the USA, I have to say that this country comes dead last for me. If I have money to spend or time to invest, I’ll be looking at Brazil or Germany before I look here.

And it’s not only me, it’s in the air right now. A lot of us pro-American right-wingers are getting sick of actually dealing with this country. Yes we admire it’s ideals, its beauty, its culture and its friendly people – but to be honest – when it comes time to deliver, American businessmen fail.

I recently came across a book called “The Rise of American Incompetence”. Slate discussed it, and the problem last week:

…thanks to widespread incompetence, American management is on its way to becoming an international laughingstock…Doubtful of the ability of provincial American executives, with their limited language skills, to negotiate today’s global business environment, the boards of massive U.S. firms like Coca-Cola, Pepsi-Cola, Alcoa, and insurer AIG have hired foreign-born CEOs. Carl Icahn, the 1980s corporate raider, has reinvented himself as a borscht-belt comedian/activist investor, who delights conferences and reporters with jokes at CEOs’ expense. On a recent 60 Minutes, Icahn complained to Lesley Stahl about the incompetence of American management. “I see our country going off a cliff, and I feel bad about it.”

If you’re European or Canadian and you’ve come to New York lately, or you’ve waited on payment, or delivery of something from Americans, then I suspect you’ll agree with the title of that book and with Icahn – American business is really going off that cliff (likely in a Canadian-built car).

I don’t know what it is – maybe they’ve been on top so long that they’ve forgotten that they have to fight to stay there, maybe it’s their poor education system, maybe their protectionist politics, maybe all the great entrepreneurs have moved into the tech sector and left the rest of the economy with the dregs, but whatever the cause, this country’s businessmen are impossible to work with, and I am – nearly – done trying.

A few stories about the US Dollar

As I write this the Canadian Dollar is trading at about $1.10 US. The highest in my lifetime. This high number means that our company has lost Canadian $9,750 (US$10,725) because some of our contracts were priced in greenbacks.

But it’s not just Canada that’s rising against the US Dollar – everyone is (except China of course). Here are a few unrelated news stories on the plight of the American Dollar:

Model Rejects US Dollars

Gisele Bündchen is said to be keen to avoid the US currency because of uncertainty over its strength. The Brazilian, thought to have earned about $30m in the year to June, prefers to be paid in euros, her sister and manager told the Bloomberg news agency. However, Ms Bündchen, 27, declined to comment on her pay arrangements.

Last week, the dollar hit long-term lows against the euro, the British pound and the Canadian dollar. According to Brazil’s weekly magazine Veja, when Ms Bündchen signed a deal to represent Pantene hair products, she demanded that the brand owner, Procter & Gamble (P&G), paid her in euros.

Euro Will Hit $1.50 US by January

The ECB will keep its key rate at 4 percent on Nov. 8, according to a Bloomberg News survey. Trichet will meet the press after the bank’s decision. The euro has gained 23 percent since the ECB raised rates eight times, starting in December 2005.

“Money will continue to flow into the euro,” said Kengo Suzuki, currency strategist in Tokyo at Shinko Securities Co., which agreed to be taken over by Japan’s second-largest publicly traded lender Mizuho Financial Group Inc. “The ECB will want to keep the option of raising rates.”

The euro may rise to $1.50 by year-end, he forecast.

Australian Dollar Peaks, China to Diversify Currency Holdings

The Australian dollar scaled a new 23-year high against the beleagured US currency today, bolstered by expectations the central bank would lift interest rates again in the near term to check inflation.

Also boosting the Aussie were comments from a senior Chinese official who said on Wednesday that China should diversify its $US1.43 trillion stockpile of foreign exchange reserves by buying more strong currencies such as the euro.

Sarkozy tells America to Buck Up. Also, he’s going to tell China to let the Yuan Float

French President Nicolas Sarkozy on Tuesday called on the US to avoid a ‘too weak’ dollar and said he will personally urge China to allow its yuan currency to appreciate. Meeting with business leaders from the French-American Business Council during his first official visit to Washington, Sarkozy said neither the US nor China need weak currencies.

‘I will go to China and I will tell (authorities) they have such a spectacular success… you don’t need to have a currency so devalued to succeed,’ he said, referring to his scheduled visit on Nov 25-27. On the weakness of the US dollar, which hit another record low Tuesday against the euro, Sarkozy said: ‘A strong economy should have a strong currency. You don’t need a dollar too weak; your technology, your know-how is enough.’

Must control self

God help me, I’ve got a phone interview with a guy in Korea in 5 minutes. His name is Suk Bum Yoo – but said Korean style, it’s Yoo Suk Bum.

Must stop laughing. Must get it out of my system:

‘ring ring’

Seoul: “Hello?”

Vancouver: “Yes hello, Yoo Suk Bum please?”

Oh the perils of international business.

Canada-US Parity and Productivity

As I write this, the Canadian Dollar is trading at 99.9cents US. It hit parity yesterday and actually rose above $1.00 US. It hasn’t done this since my first birthday. Bloomberg is reporting that this may be a long-term situation.

I hope it is. We Canadians have been lazy, the low dollar has been a crutch for our economy. Here’s what I mean:

Our company arranges internships for universities. Our labour costs are between $30 and $60 per hour. We factor this into an internship placement and with other costs, this means we can charge universities and students a net price of $899 and be able to spend up to 15 hours on an internship placement while still earning a profit.

Students from Korea, Brazil and Mexico account for half of our business, and for them our prices are fixed in US dollars for the rest of 2007. This means that our earnings are declining while our costs do not. So what do we do? Lower wages? Hell, no – we can’t – not in this labour market. The unemployment rate in British Columbia is 4% and most of that 4% are new immigrants or unskilled labour or people changing jobs. The unemployment rate for professionals? It can’t be more than 1%. If we lowered salaries, we’d lose staff to our competitors.

So what do we do? The only thing we can do – work harder and better. Become more productive.

I despise the Federal Liberals and won’t hide that, but sometimes a little wisdom inadvertently slips out from that camp. Here is their “leader” Stephane Dion on productivity:

I don’t believe small is beautiful necessarily, or big is beautiful necessarily. There are a lot of simplistic assumptions about that. Sometimes when you are big, you die. What you need to be is fit,” Mr. Dion said.

He’s right there. Businesses in Canada needed to get fit or die. We’ve been putting this off too long – with parity, the crutch has been torn away from us and now we need to prove what we are worth.

We need to start doing our jobs in 10 hours instead of 15, and a lot of other people need to start making changes too – hopefully our competitors won’t … and hopefully no government will get in the way of us driving our competitors into the dirt.

All business

I’ve been all business lately.  I ran with that idea I had earlier and it’s proved to be a money-earner with a lot of potential.  At the moment though it’s a cash sink that requires a lot of effort, but at the rate it’s been going, I’d say another 6 months and I’d be able to quit my day job.

Black as Rearden

George Jonas had an article in Today’s Post in which he compared Lord Black to a ‘character out of an Ayn Rand Novel”.

He was referring to Black in the context of his wrongful conviction. He wrote:

Larceny through government isn’t new, though we usually expect to see it in Russia or China. But in our days of government intervention, it has become as lucrative to investigate, regulate or tear down businesses as to build them, in America as well. Unlike bank robbers, corporate scavengers carry no firearms. They point regulators at their targets, a grand jury being their biggest gun.

This got me thinking back to the Ayn Rand reference and to the trial of Hank Rearden in Atlas Shrugged :

A few years ago, they would have jeered at his air of self-confident wealth. But today, there was a slate-grey sky in the windows of the courtroom, which promised the first snowstorm of a long, hard winter; the last of the country’s oil was vanishing, and the coal mines were not able to keep up with the hysterical scramble for winter supplies. The crowd in the courtroom remembered that this was the case which had cost them the services of Ken Danagger. There were rumours that the output of the Danagger Coal Company had fallen perceptibly within one month; the newspapers said that it was merely a matter of readjustment while Danagger’s cousin was reorganising the company he had taken over. Last week, the front pages had carried the story of a catastrophe on the site of a housing project under construction: defective steel girders had collapsed, killing four workmen; the newspapers had not mentioned, but the crowd knew, that the girders had come from Orren Boyle’s Associated Steel.

They sat in the courtroom in heavy silence and they looked at the tall, grey figure, not with hope – they were losing the capacity to hope – but with an impassive neutrality spiked by a faint question mark; the question mark was placed over all the pious slogans they had heard for years.

The newspapers had snarled that the cause of the country’s troubles, as this case demonstrated, was the selfish greed of rich industrialists; that it was men like Hank Rearden who were to blame for the shrinking diet, the falling temperature and the cracking roofs in the homes of the nation; that if it had not been for men who broke regulations and hampered the government’s plans, prosperity would have been achieved long ago; and that a man like Hank Rearden was prompted by nothing but the profit motive. This last was stated without explanation or elaboration, as if the words “profit motive” were the self-evident brand of ultimate evil.

Read more…

Black Guilty

Conrad Black found guilty of obstruction

 Globe and Mail Update

July 13, 2007 at 11:47 AM EDT

Chicago — The jury in the Conrad Black trial has begun to return verdicts on each of the counts against Conrad Black, John Boultbee, Peter Atkinson and Mark Kipnis.

Conrad Black has been found guilty on 4 charges, including obstruction and three counts of mail fraud, and not guilty on 9 other charges.

On count 13, the jury judged Conrad Black guilty of obstruction of justice in connection with the removal of 13 boxes of documents from his office at 10 Toronto Street in Toronto. It carries a maximum penalty of 20 years in jail and a $250,000 fine.

Read the rest

So unfair. Lefties I’m sure will be ecstatic over this – though I doubt 1 in 20 could explain what he was convicted of. The only way for the universe to come back into karmic balance is if Hillary Clinton announces she’s withdrawing from the race because she’s going slowly insane from the syhpillis that Bill gave her. We can only hope anyway.

Richer than America

That’s a chart from the Sauder Business school at UBC.  The trend has the Canadian dollar passing the American in the next month.

I was looking at this because I saw the dollar hit 95.74 US today.  My co-worker was talking about going down to the states now that their dollar is so weak – he was saying that they’re our ‘Mexico’.

I double checked the stats and he’s kind of right.  As of the last few weeks we are now richer than Americans.

The median hourly wage in Washington State is USD$18.39 – or CDN$19.29.  The median hourly wage in BC is CDN$20.29.  This means that we British Columbians are now typically $1.00 per hour richer than our American neighbours.

If their dollar gets any lower we’ll have to build a fence along the border to keep them out.  But then again it could help us solve our worker shortage.   Maybe they’ll do the jobs Canadians won’t do?  If the price is right, you never know.

Business planning working out quite well

Looking good for that business idea.  Didn’t realize there was such a market out there.  I’ve taken 2 orders from Saudi Arabia – though as always there needs to be some haggling on payment terms.  I’ve also got a huge order from Vietnam – something on the order of 30 workers – but at a very discounted rate, so it only comes out to about USD$10,000.  I’ve got another order from Kuwait but that requires some negotiation as well – I want to get that fee up quite a bit.

That’s from only a few days of planning.

Now … anyone reading this interested in going to either Riyad, Saudi Arabia or Saigon, Vietnam?  Seriously.  If you are, leave a comment with your email.

All business

Someone gave me a brilliant business idea last week involving the Middle East and sacks of cash.  I’ve been working on that a lot and so not blogging much.  I’m going to be doing some more of that the next few days – contacting people in Saudi, Kuwait, Dubai etc… – to see if this is workable.  If so, then it’d be an income boost of about $100,000 per year.

I have experience in the Middle East, pre 9-11 I lived and worked in the Cairo suburb of Heliopolis.  After that I spent a few months in the Sinai.  I looked into going to Alexandria post 9-11, but decided it was mental.  In my last job in Toronto I did a lot of business with the Middle East and was able to build a few good, relevant contacts with Saudi Aramco – the owner of all of Saudi Arabia’s oil.

$100,000 per year extra would mean that I could spend much more time in Central Canada and Europe.  I also used to live in Milan, and I love the city of Como, on the Swiss border.  That money would mean that I could take a flat there for a month or so each year.

As far as I can tell, blogging doesn’t pay much – and it certainly doesn’t pay for an Italian villa.  So you’ll excuse me for a mo’.

Just posting links for the moment.

Japanese cyborgs are going to take your jobs

This robot looks too bad-ass for construction.  Bounty hunting maybe.

Anyhow that robot or one of his descendants is going to take your job – that is if your job involves simple manual labour. Bet you wished you’d studied…

The white robot…used a screwdriver with its right hand while leaning forward on its left arm, balancing itself just like a human would…”Our country is rapidly ageing and it is an urgent task to develop robots that can perform tasks only done by humans now,” the statement said.

“If a humanoid can substitute human functions, the entire social cost would be reduced,” it said. Kawada Industries said the company hoped eventually to put the HRP-3 Promet Mk-II to commercial use.

Project manager Takakatsu Isozumi said the company wanted to target clients such as construction contractors by 2010, with each robot costing around 15 million yen (120,000 dollars) each. “We want to increase the actions that this robot can do at construction sites, such as driving construction vehicles,” he said.

HotAir.com is proposing using the robots as an alternative to migrant labour. Maybe … but I wonder how much the spare parts are, how much repairs are, how long this lives in a real environment, how training is done?

I work in recruiting. I can get $2,000 for a construction worker placement in Alberta. The company will spend a few dollars training my worker and then something like $60,000 per year on salary and taxes. So at $120,000 – and assuming no repairs or maintenance, this thing would need to survive more than 2 years to be worth it.

At least that’s what you’d think on the face of it. But It can be effective for construction companies even if it only lived a month. Just the threat of it will depress wages. While illegals will work for a lot less than Canadians, they probably don’t depress wages too much because of the risks involved. But with a robot? No risk.

In fact – as a construction company, you wouldn’t even need to buy one.  As soon as these things become commercially available, some company like Manpower or LaborReady is going to buy an army of them and lease them out to work 24-hours a day.  Hmmm business opportunity there…

It’s official – Canada is mediocre

Who is John Galt?

Quoted in the Post:

“Our culture is unwilling to accept the failures that are built into an environment that genuinely supports risk taking. Nor are we wholly comfortable with differentiation, success and excellence,” the report says. “This culture holds Canada back in entrepreneurial and technological innovation.”

Someone else noticed it.