Magazine

Behind U.S. Business' Rush To China


The point made in "Is it China's fault?" (News: The United States, Oct. 13) about China's currency being undervalued by "only" 15% to 25% rather than the "40% figure China's critics bandy about" is stunning. Even a 15% advantage is one that means a difference between winning and losing the vast majority of orders for which a manufacturer competes. It certainly influences a decision to send all work overseas or to balance a blend of sources that allows for development and quick turnaround in the U.S. (as it did for me during my 20 years managing businesses around the world for a multinational manufacturer).

Most manufacturers would give up body parts to get a 15% leveling of the playing field. It wouldn't stop the migration -- and shouldn't -- but it would make the difference between a logical economic migration and a virtually total, rapid abandonment of U.S. manufacturing.

Desmond J. McDonald

Saegertown, Pa. In "Is this boom in danger?" (Asian Business, Nov. 3), you say China is reaping billions in profits from its exports. Millions of Chinese, more than ever before, are employed and earning twice and triple what they ever did...and they're spending!

As long as the world keeps buying and China keeps reinvesting in its infrastructure, how will this turn into the doomsday scenario implied by your article? This response is similar to what was screamed about in the mid- to late '90s here in the U.S., just before one of the greatest bull markets. Caution should be advised, but to be so fearful is ridiculous and shortsighted.

Sven G. Carlson

San Francisco Forget about guillotining France's 35-hour workweek ("Give this policy the guillotine," European Business, Oct. 27). Citizens shouldn't be expected to toil to fire up their country's economy. They should have as much time as possible for their families and individual pursuits. Life shouldn't be a relentless race to earn. The French know that.

G. Driver

Ichihara City, Japan

John Rossant's "Give this policy the guillotine" totally confused two different aspects of France's 35-hour workweek policy. The first is the concept of a shorter working week. Given the level of unemployment in France and the increase in productivity being achieved, it can only be sensible to move toward a shorter working week not only in France but worldwide. If the amount of work were not finite, there would be no unemployment anywhere. Work may not necessarily be the enemy, but there is no real virtue in the American philosophy of longer and longer working hours at shrinking levels of hourly pay in order to enable excessive and unnecessary consumption. In all this the French action can only be right.

The second aspect is implementation. While the rationale for the policy might be sound, a move toward implementation unilaterally, which France undertook, had the effect of increasing the unit labor costs in one country alone and was clearly a mistake. It would have been a mistake even within the single currency area of the European Monetary Union, where individual currencies can no longer adjust to reflect different policies pursued in different countries -- it was doubly so in a globalized economy.

Maurice Elstub

Cannes, France

American corporations embrace globalization for its economics but continue to refuse to recognize the value of workers' basic needs. The French have it right. We have it wrong. America needs a 35-hour workweek.

Kevin Carey

Arlington, Va. I cringed years ago when Volkswagen abandoned its air-cooled philosophy of "little cars that could" in favor of higher performance and style over substance ("Will Yankee drivers buy VW luxury?" European Business, Nov. 3). A vehicle that sold equally well in First and Third World markets is now almost out of reach of anyone below upper-middle-class status. VW's recent entry into the ?ber-luxury market and (gasp) conspicuous consumption confirms this. The fact that it is spending lots of dollars just to get consumers to pronounce the name of its SUV model correctly is almost scandalous.

When the sport-utility vehicle/luxury bubble bursts, one wonders what this once-splendid auto maker will have left in reserve for the rest of us. It's too bad Volkswagen is seemingly leaving most "volks" out for the moment.

Chris Greiling

Fishers, Ind. Your review of Daniel Okrent's book Great Fortune reminds me of some peculiarities of the prestigious Rockefeller Center ("Rockefeller's baby," Books, Nov. 3). You mention that it is "mistakenly associated in the popular mind with John D. Rockefeller Sr., the ferocious monopolist who created Standard Oil." Although the statement is literally correct, please allow this defense: Rockefeller may be considered the greatest visionary strategist of the industrial world, ever. That comes from his immediate perception of the abysmal distance existing between the oil well and the specific consumer need for a precisely defined "standard" product. The quasi-monopoly he built secured fair supply and stable price in the age of illumination (7 cents to 8 cents per gallon -- before oscillating between 3 cents and 30 cents). By merely naming his business "Standard" Oil, Rockefeller proved to be the genius he really was. Of course there is a shadow on the picture. Ill-advised in legal matters, he adopted a completely flawed line of defense, which cost him his reputation. It was his great, great mistake. Definitely.

Pierre Chavenon

Clamart, France Your article "All the world's a call center" (News: The United States, Oct. 27) mentioned that call centers in India would not only help companies in the world cut costs but also improve the quality of their customer service. This is valid as long as the transactions or questions handled by the operators in those centers are not so complex. And it is valid as long as the customers' business culture is very close to the worldwide standard. If the customer over the telephone is from Japan or China, can the operators in India handle their calls as appropriately as those from the U.S. or Britain?

The companies making use of call centers in India would need to think about how to train their operators in India about the very different business cultures in the Asia Pacific region, and also how to transfer the product's knowledge to the operators in India quickly.

Masami Moriya

Tokyo

I worked in 15 call centers in six years, mostly in Toronto, but also in Britain. I hope that's a record, but I certainly wasn't alone in the job-hopping. I would meet the same people as I hopped along. Didn't seem to bother employers: I'd put my 10 most relevant jobs on my r?sum? and still get hired. I don't buy it that people in India are better at customer service. They are just in their first call center job. When they get to call center No. 15, they'll be just as irritable and impatient as I was.

Erik Cyr

Oshawa, Ont.

As a technical support specialist for an Internet service provider, I am angered and offended at the insinuation that I am a poorly educated American working in a dead-end job, providing poor service to my customers because I don't care about them or my job. I am college-educated, and this is a career choice for me. I would suggest that Diane Brady come up with a computer problem, call for tech support from an overseas call center, and see how long it takes to fix the issue, if in fact it ever truly is fixed. Then I suggest she contact me with the same problem and compare her experiences.

Eric Wasson

Indianapolis In "The BusinessWeek/Architectural Record Awards (Special Report, Nov. 3), I take exception to the comment: "Most architectural contests honor aesthetics and applaud the beauty of the structure built." I believe you may be doing a disservice to architects -- even though your awards program is being done in association with the American Institute of Architects, of which I am a member, and your jury includes architects.

There is an implication in the quoted sentence that your awards honor architectural projects because those awarded satisfy the functional, and in your case, "business" aspects of the respective projects. Every architectural project that wins any kind of award is judged on its functionality, without which -- despite the aesthetics involved -- it could not receive any award.

Have there been exceptions to this? Probably, yes. But, and as an example, [the design of] a school may reflect the best aesthetics since the Parthenon, but if that school functions as if it were a sports arena, obviously the project is not worthy of winning any awards. Aesthetics and functionality are not two disparate issues facing architects or those who review their respective works. They are not choices. They are givens.

Gerald Gurland

West Orange, N.J. Russell Simmons and his group follow the core principles required for successful brands in the next economy ("The CEO of hip-hop," People, Oct. 27). He knows it's about the brand. On the operational side, production will continue to move to a place where it can be produced for the least cost. Simmons recognizes that media and entertainment can define what we wear, where we eat, and how we spend our time. He is in a very sweet spot as consumer brands and entertainment continue to converge. There are some great lessons to be learned here for business leaders in many sectors. It's great to see an example like Simmons out there.

Robert W. D'Loren

President and CEO

UCC Capital

New York

I commend you for grabbing the attention of teens. I compose beats, write lyrics, and sing hip-hop. I have a studio in my garage. I have followed Mr. Simmons' career from its inception and highly respect the man.

Stefan Barone

Staten Island, N.Y.


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