China’s Infrastructure-based Stimulus Package Turns Around CAT Sales

Add comment April 29th, 2009

Let’s hope ours is coming soon!!  here

Companies World-Wide Rethink Strategies

Add comment April 29th, 2009

Here is an interesting summary of a survey.  How will this affect your business?

Consumers from the U.S. to Europe to Japan appear to be growing more cautious amid fears that the world economy will worsen over the next 12 months, according to a report to be released Thursday. The new frugality is forcing global companies to revise their strategies and offerings.

Most consumers in a Boston Consulting Group survey of 21,800 people world-wide said they are cutting spending, searching for value and discounts, and staying home more. “Our consumers are going back to basics,” said Catherine Roche, a partner at the consulting firm. “They don’t want to be as conspicuous as the past … avoiding visible logos on their bags and clothes.”

Indeed, brand loyalty in most developed markets is waning — so-called brand fatigue — but remains strong in parts of Asia, according to the study conducted between October and February and then revised in March. In India and China, 79% and 71% of respondents, respectively, said brand was enough reason to pay more on a purchase, compared with 27% in the U.S. and 17% in Europe.

Still, nearly half the Chinese consumers surveyed and more than three-quarters of the Indians said they planned to at least curb spending on nonessential items. And retailers in both markets say they are trying to attract a broader customer base by lowering prices.

“I think the emerging middle class in China is brand loyal,” said Alex Miller, president of Daymon Worldwide Inc., a global private-label broker and marketer for retailers, based in Stamford, Conn. “The less wealthy people are buying private label.”

He cited the example of Aeon Co., Japan’s biggest group retail by sales, which last month announced a new branding and discount strategy for its private labels. Aeon, Miller said, wants to achieve 750 billion yen ($7.75 billion) in annual private-brand sales by 2010.

Japan’s new frugality runs counter to the brand- and quality-obsessed image it had during boom years, according to Emmanuel Huet worldwide leader of the consulting firm’s Center for Consumer Insight. “Whenever as a country you live through a crisis, there are traces of it in the psyche of consumers,” Mr. Huet said, referring to Japan’s economic crisis in the 1990s. “The big difference is that Brazil, Russia and Mexico also have been through crises in the recent past. Not so for India and China.”

Brazilians have become more price-sensitive, with about half saying they will trade down to better balance their budgets and save money. The percentage is on par with the U.S. — but higher than in any developing country besides Mexico.

Russians, meanwhile, seem more likely to put their money into durable goods, such as appliances. “With rising inflation and a devalued ruble, they might just as well ’spend it while they have it,’” the report said.

Besides country differences, the survey found variance among consumers depending on the products. Across all Western markets, half of young single men said they don’t plan to cut back spending on cars, and just under half of working couples without children said the same.

The report also hints at a shift toward products with more value and durability. Appliance maker Electrolux AB noted as much in its first-quarter earnings. “The green range is very popular all over Europe,” said Electrolux spokesman Anders Edholm. “This is really something to take into consideration. When they save water and electricity, they have to take a couple of years to get return on that investment.”

Source: Wall Street Journal

Cultural Index Needed

Add comment April 29th, 2009

The other day, I listened to a presentation about the Rockford Area Demographic, Social and Economic Trends, which frankly was somewhat depressing.  Especially at this time when the local, national and world economy is struggling on so many fronts.

So I thought, why can’t someone develop a  “Cultural Index” for the region.  You know, take into account all the many positive cultural, sports, entertainment, etc. events and somehow roll them into an Index.  Publish the Index so we can show some positive features about living in the Rockford area.

We know about Burpee, Discovery Center, Coronado, MetroCentre Events and all the festivals, water parks, etc. that many of us enjoy.  there are probably many others that go unnoticed that could add to the index.

Then, instead of complaining about job losses, crime, truancy, etc. we can look at the Index and say “you know, life is pretty good around here after all”

Might be a good assignment for someone in  “Under 40’s Group”!

Then, when something is added, change the Index.

Even Wind Industry Suffers

Add comment April 29th, 2009

The UK’s only wind turbine manufact­uring plant is to close, dealing a humili­ating blow to the government’s promise to support low-carbon industries.

Vestas, the world’s biggest wind energy group, said today that it would close its Isle of Wight facility, which employs about 700 people and makes blades for wind farms in the US.

See the full story here. Wind-UK

With the Wind Energy Exhibition next week in Chicago, I wonder what they are saying about the health of this industry.

How Would You Fix the Economy?

3 comments April 27th, 2009

This is from an article in the St. Petersburg Times Newspaper on Sunday.  The Business Section  of the St. Petersburg Times asked readers for ideas on “How Would You Fix the Economy?” 

3) They MUST either buy a house or pay off their mortgage  Housing Crisis fixed. 

It can’t get any easier than that!  If more money is needed, have all members of Congress and their constituents pay their taxes…

OK for Green, just don’t forget about Black

Add comment April 24th, 2009

I am certainly for the “Green” movement and harnessing energy from other sources and providing jobs in new industries.  I guess I can’t get so enthused as to lose perspective.

Solar…well I remember 25 years ago when it was a hot industry when my young family and I went yearly to Colorado.  OK so the technology is better and cheaper today.

Wind…Well, OK our region can become a center for research and manufacturing, but as I remember from a AWEA (see earlier posts), most of the wind is west of the Mississippi River.  Sorry, Mayor Daley and Chicago!

Not to sound like a party poop, I did suggest to Governor Quinn yesterday that…OK, Green is Good…but don’t forget about the manufacturers that make steel, tractors, cars and all the stuff that goes into them.

Maybe not too exotic, but there are a lot of us doing it, providing wages and taxes and wealth.

Grassley, Camp Warn of Job Effects of Raising Taxes on Small Business Owners

Add comment April 24th, 2009

  M E M O R A N D U M

 To:       Reporters and Editors

Re:      Effect of President Obama’s and congressional Democrats’ proposed tax increases on small business activity

            Sen. Chuck Grassley, ranking member of the Committee on Finance, and Rep. Dave Camp, ranking member of the Committee on Ways and Means, are concerned that the White House and Democratic congressional leaders are minimizing the job impact of increasing taxes on certain small business owners, as proposed in the President’s budget. Grassley and Camp released an analysis of the impact and issued a comment.  Here is their comment:

            “The President and Republicans agree that 70 percent of new jobs will come from small businesses.  Yet, the stimulus contained very little tax relief for small businesses –less than one-half of one percent of the stimulus bill.  The TARP bailout did almost nothing, and that is confirmed in part by reports from the Federal Reserve indicating that 70 percent of large banks have decreased small-business lending. Now the President wants to increase taxes on some small businesses, even though they’re most likely to create jobs.  This comes as these businesses are already pessimistic about their hiring abilities.  Their outlook is the worst in years. Most notably, small business hiring plans are the worst in the 35 years of the NFIB’s survey of small businesses. If small business owners are hit with a tax increase, we can say good-bye to a chunk of new and existing jobs.  Those who say only a handful of small business owners will face a tax increase need to wake up and smell the coffee.” 

            Here is the Grassley-Camp analysis:

            Small Business Owners Will Pay More than Half the Taxes From Higher Marginal Rates:  According to the non-partisan Joint Committee on Taxation, in 2011, the President would tax $88 billion of net positive business income at the 36 percent rate and $349 billion at the 39.6 percent rate.  This tax increase would raise $18.694 billion in 2011.  Multiplying this over ten years suggests the proposed higher marginal rates are likely to cost small business owners somewhere in the neighborhood of $187 billion over the ten-year budget window.  That equates to roughly 55 percent of the revenue raised under the President’s proposed higher marginal tax rates coming from tax increases on net positive small business income ($187 billion out of $338.76 billion).  Moreover, the Joint Committee on Taxation found that approximately half of the income (47%) targeted by the President’s marginal tax rate increase proposals in 2011 would be earned by small business owners.  This data is consistent with Gallup survey results showing that approximately half of the small business owners who employ 20 or more workers would be hit by the marginal tax rate increases proposed by the Administration and congressional Democratic leadership.  These small businesses with 20 or more workers employ nearly two-thirds of all small business workers, according to Small Business Administration data.

Here’s What Entrepreneurs Do to Stay Alive

Add comment April 24th, 2009

Here is a model that should be used in all governmental agencies and organizations funded by taxpayer money.  StayingAlive

These are the people who really have “skin in the game” not “entitlements.  Governments shouldn’t ask for more tax money, they should get their employees to belly up and “share in the pain”.

But do you suppose they will?

GM to Shut Plants for Two Months

2 comments April 23rd, 2009

Like we don’t have enough bad news!  What do you think this will do to suppliers of everything to GM?  And what about the employees who aren’t covered by union contracts and get Laid-Off Pay”?

Maybe the local and state governments ought to shut down for two months too!   GM

Auto Uncertainty Affecting Manufacturing

Add comment April 22nd, 2009

I hear almost on a daily basis, another local company laying off workers, or planning on further reductions of expenses.  It seems that the past few weeks has seen a major drop in incoming orders.  So being prudent business people, we prepare for the worst.  Too bad we just can’t raise prices, like the state government wants to do!

It doesn’t take much genius or economic theory to understand what is taking place.  I think the uncertainty of what is going to happen with Chrysler and GM is causing a major pause in manufacturers from placing orders for equipment.

Why?  In my own surveys, we can tell the interconnectivity of the auto makers and their suppliers and their suppliers.  It’s called “supply chain”.  So even though I don’t supply directly to, say, Chrysler in Belvidere, maybe one of my customers does.  So he says “whoops, let’s wait to see what is going to happen”  Multiply that by the # of plants (assembly, engines, transmissions, foundries, etc.) that Chrysler and GM combined have in the US and Canada and pretty soon the multiplier effect takes hold.

So where and how is the Stimulus helping?  I don’t think it’s helping one bit.

What can help is for the Washington Auto gurus get the auto situation settled ahead of schedule.  May 1st is Chrysler’s deadline, June 1st is GM’s.  Manufacturers like certainty too.

It can’t come soon enough.