The Iceberg

Defective accelerator pedals discovered in Toyotas? In Toyotas?

Flashback: 1984, Houston.

We had ordered integrated circuits from our Japanese supplier. A standard clause in the contact indicated that “no more than 1 in 10,000” could be defective. (The manufacturing process was error-prone and we wanted the best quality.) We ordered 100,000 chips. Upon arrival, we detected a small plastic bag of 10 chips in the larger shipment. An attached note basically said:

We don’t know why you want the defective chips, but here they are.

UnFlash

Japanese quality was a given. A certainty. And now? Defective accelerators on Toyotas?

Executive management focus in the past decade has shifted to ‘shareholder value’ and meeting, eh, beating analyst expectations. This is the way to get a (gargantuan) bonus. In the past, there was an annual planning and review cycle, but that gave way to semi-annual, then quarterly, monthly, weekly…

“Hi, Dan! What have you done for me today?”

… reviews. Efficiency is the mantra chanted by analysts and management. Sometimes things are sensible:

“We are spending $100B a year. There must be areas where we can reduce.”

Sometimes management is ridiculous:

“Our expenses are $100B/year. I hate spending. I want to drive expenditures to zero.”

To get the efficiency, companies move work to the lowest cost location – off-shoring, right-shoring, near-shoring and point-missing. The belief appears to be almost universal: The same or better quality is available (some-shore) at a (much) lower cost.

Hence the promise:

“Every one of the engineers at your call center in Beserkistan will have a Ph.D. and an IQ higher than 175.”

The truth:

“And they’ll all be 17 years old.”

The relentless drive for ‘efficiency’ has unpleasant implications for quality. Cutting fat (and muscle) before moving to an enumeration of DNA molecules inevitably degrades quality.

Example: Paying a commuter airline pilot $25,000/year – meaning that they have to commute from home (Seattle) to work (Newark) because they can’t afford to live away from their parents, may not attract very best staff. And, even if the pilot is another Sully, and he flies simply because he loves the job, the overnight commute will impact his ability to perform in an emergency.

Toyota? Just the tip of the iceberg.

Bo Derek Shopping Spree

To complement my business in New York, Nazy gave me a shopping list. Concerned - in fact, terrified, I prepared with a glass or two of wine with lunch before heading to the Century 21 store next to the hotel. Century 21 has a vast collection of designer items (mixed with a much vaster collection of designless items). The items are scattered randomly amongst thousands of square feet of racks, nooks and crannies. The store is always crowded. In short:

“The things I do for my wife,” I thought.

When I entered the store, I realized that I had forgotten my list. I knew, however, that Nazy wanted something from Purple from Pucci. "It has something to do with a movie," I thought locating a sales person.

“Do you have any, eh, Bo Derek’s,” I asked.

The clerk just looked at me.

I eventually located the Pucci rack in the hope that I’d be inspired by something that was purple. Unfortunate and clueless, I simply looked for reasonably priced items that were offered at a huge discount. Unable to decide, I headed to office for a meeting. Later, I called Nazy to ask for advice.

“What is it, Dan?” She asked.

“It’s a bargain,” I explained, sure to get her attention. “Marked down 70%.”

“But what is it?”

“It’s a, well, eh, it looks like a very short sweater with long sleeves.”

“That’s a bolero, Dan. That’s exactly what I wanted. What color is it?”

“It’s purple,” I replied. “Or maybe it’s blue.”

“Purple is a mixture of red and blue, Dan. Is it a red-purple or a blue purple.”

“It could be pink.”

“Pink!?”

“Maybe Pink mixed with, eh, yellow?”

“Hmm. Well, the price is right, so get it.”

“Actually, Nazy, I’m not in the store right now. I’ll go back tomorrow.”

“It will be gone. You simply don’t understand how shopping works.”

Nazy was wrong! [Note this officially approved exclamation.] Not only was the, eh, ‘bolero’, still there (in the right size), it had been marked down again – making it an even better bargain. The giant signs (“Further Markdowns!) grabbed my attention and I located something else in Nazy’s size. Bravely, I purchased it without input from Nazy. See photo above.

Questions and Answers (again)

You incessantly blather about headquarters – specifically the lack of any ability to make a decision. Are you actually asserting that no decisions are ever made at headquarters?

Of course not. Sometimes an executive steps in and makes a decision…

So there!

…. to sack people who ask questions. Sometimes, by a quantum-mechanical fluke, an actual decision is disgorged. For example, our company, reacting to the global economic downturn, cancelled orders, closed factories and drove partners into bankruptcy – thereby assuring our profitability for the year.

Well done.

Unfortunately, the economic downturn wasn’t as bad as expected and when things turned around, we couldn’t get product. For some reason our ‘partners’ preferred to deal with other customers. But we’re not worried; the person who made the hard decision to close everything was rewarded with a promotion and will now be responsible for cleaning up the mess.

Did you really shuffle between Terminals 1,4 and 5 and gates A and B at Heathrow?

No. I took the train – except for the walk from Gates B to Gates A at Terminal 5.

And we sell what?

I have vented on the USA Tax situation in previous posts. Some readers have suggested that it is a privilege to pay taxes. (I have referred these people to nearby psychoanalysts.) Some point out that, although the situation is somewhat unfair:

“It’s not that bad. You simply pay the same taxes that you’d pay in the USA if you were living here.”

I realize, of course, that what they are thinking is more like: “Gilded expatriates like you shouldn’t be allowed to take advantage of low taxation domiciles.”

Let me simply note that the exchange rate has gone from 1.72 (when we arrived) to 1.03 (now). Thus, if I were being paid, say 172,000 Francs when I arrived, that would be equal to $100,000 for (US tax purposes). Now, the same Swiss salary is equal to $166,995 (for US tax purposes.) It looks, therefore, I like I have gotten a 66.9% raise – even though my income is unchanged. Note,that my rent, grocery, insurance and other bills don’t go down just because the US$ collapses.
So, in addition to ignoring the international taxation treaty that they (the USA) negotiated and which is agreed by every country (except the USA, North Korea and Libya), they also mishandle the economy with the sole purpose of artificially inflating my salary so that I will have to pay them more taxes.

Yet this isn’t the worst that can happen. A friend of mine who has been living in Singapore for the last 23 years, discovered a large and unexpected withdrawal from an account that he maintains in the USA. It turns out that the state of California, discovering a California mailing address for someone who filed a tax return with the IRS, constructed an imputed tax liability, added penalties and interest and then simply took the money from his account. And, because California is a fiscal mess, they’ve fired all of the people who would normally deal with the irate and aggreived citizen. Note: This is not a situation in which my friend is complaining about unfair taxation. This is a situation in which even though no tax (i.e. $0; zero, nil, zilch) is owed, the government still took the money and will not respond to telephone, email or fax messages requesting redress.

The worst news? My employer sells the systems that find these tenuous links (California mailing address, Federal Tax form filed) that allows this confiscation.

The mountain photo depicts the safest place to flee – and disappear.

Who Cares?

Like everyone else, I am disappointed by Apple’s iPad announcement. I expected Steve Jobs to walk across the Mississippi while dispensing a few loaves and a couple of fish to the cheering multitudes. Instead, I got an iPhone that’s too big to put in my pocket - eh, or was that a laptop that’s too small to have a keyboard.

The frenzied reaction served to obscure a few other items of interest to the world of IT. It is, for example, clear that Apple and Google aren’t friends anymore. Apple wants to control search (and associated advertising revenue) on the iPhone.

Aside: I still cannot believe that advertising pays for the Internet while providing substantial profits to Google. I have never, ever, clicked on any advertisement at any time or in any place.

In fact, this seems to be the time for “fallings out” with Google. Not content to break up with Apple, Google has decided to take on the entire country of China.

I’m personally baffled. China (it appears to be the government) simply wanted access to a Proprietary, Valuable Intellectual Property while, at the same time, wanted to block access to non-proprietary, free web content. Google cried: “Foul!”

China is modernizing very quickly. The country is rightly proud of the progress they’ve made. In my opinion, however, while they’re proud, the government is also not confident of its own position with their citizens or of the local ability to innovate and develop. And, given the rapid growth, they see less need to care about complaints from outside. I think it will change – eventually. But I note that dealing with China is always a challenge

1994, China

We were trying to close the refinery deal. Negotiations had dragged on for months, well, years. We sent engineers, they sent professional negotiators. We didn’t realize that we’d been ‘had’ until we were halfway back to The Hague. They didn’t forget anything. But now, it was time to close the deal. We had a company managing director to make the pitch:

“We’ve been working on this for 2 years. We are ready to go. In fact, I have 25 people in The Hague sitting on their asses doing nothing. We need to close. Time is money.

“I have 100,000,000 people sitting on their asses. So what?

Rules and Regulations

Nazy and I are very happy in Zürich. It did take a while (9 years) to (partially) understand the recycling rules, statutes, regulations, processes and procedures. But now, we bundle newspapers, sort glass (blue, brown, white) and know the difference between a PET container (Coca Cola) and a non-PET plastic container (Shampoo). We’re aware of the once a year chance to toss anything (anything!) away for no additional charge. We know that we can take old electronics back to any store that sells electronics. We know where to dispose of batteries, light bulbs, broken ceramics and dead pets.

Naturally, we’re not complete experts. (75 years of intense study is necessary before qualifying for the right to take the 5-day test, success in which will allow you to be entered in the queue for a personal interview.) We don’t wash or scrape labels off of metal cans before depositing them for recycling. And we did have a problem with the Christmas Tree – a 4 meter behemoth. We remembered to bring it downstairs in early January. But we forgot to chop it into small pieces and, eh, it’s still outside. Nazy wants to sneak out, late at night, and dismember the branches which she plans to scatter amongst the various ‘green garbage’ containers. We'd burn it in the fireplace, but that will cause pollution problems.

Our support for rules and regulations has rubbed off on Melika. The family lawyer, she is now working in a firm in Santa Barbara. Her passion for the law leads her to respect and follow local admonishments and practices.

(Almost: The photo shows Melika and the dog entering a museum; note the No Dogs sign.)

STEPing Out

“Do I understand this correctly, Nazy?” I asked. “You want to buy a ‘step’. Right?”

“Yes. For aerobics.”

“Are you aware of the steps that we already have?”

“What..”

“There are 44 steps from the street to the front door of our apartment. And, there are 12 steps in the spiral staircase to the loft.”

“I can’t exercise on..”

“And you want to purchase one more step? A step to nowhere?”

“Dan…”

“This will go with the giant Ball.”

“You, Dan, should carefully consider what you’re saying.”

“Yes, dear. Shall we drive to Athleticum to get the step?”

We were:

“Totally successful,” Nazy enthused.

“149 Francs for a plastic step?” I thought.

“This Reebok step can be adjusted for 3 different heights.”

“You could put different size books on the existing staircase to get the same ..”

It does adjust to different sizes, but the mechanism for doing so was less than clear. (See instructions above.) We tried pressing, shoving, unscrewing and adjusting the linkage mechanism. Then, my sister Marjorie called.

“Why don’t you just look on the web?” She asked – reasonably.

A famous search engine directed us to the correct site with clear instructions:

“If you can do Lego™ Blocks, you can adjust these steps.”

It was, as they say, 'easy' - in the sense that it's always easier when you know how to do it.