FIREWORKS detonated, smoke wafted over the stage and confetti began to fall. Seventeen thousand fans cheered the European players of Team Liquid, with monikers like “MinD_ContRoL” and “MATUMBAMAN”, who had just triumphed over a Chinese side to win The International, a tournament held in Seattle’s KeyArena on August 7th-12th. In the stands Max Martinez, a 25-year-old bartender from Phoenix, was in a state of nirvana. “This is like my Super Bowl,” he said.
But the players in this tournament had no need to catch, throw or run. Their most important muscles are those in their fingers. MinD_ContRoL, a bespectacled Bulgarian named Ivan Ivanov, excels at a computer game called “Dota 2”. Valve Corporation is the producer of “Dota 2”. It has put on The International since 2011, offering more than $10m to this year’s winners. The prize money is particularly rich, but the tournament itself is not unusual. E-sports, in which computer…Continue reading
LAST year California Solar Systems (CSS), a small installer of residential solar panels, decided to “Buy American”. It turned to Suniva, a Chinese-owned firm that makes photovoltaic panels in Georgia and Michigan, rather than use cheap imports. But according to CSS’s boss, Bastel Wardak, Suniva was unable to deliver what it promised, leading to unacceptable delays. He then tried SolarWorld, a more expensive producer in Oregon whose panels could also be marketed as “Made in the USA”. But troubles at SolarWorld’s German parent put a stop to that. Now Suniva and SolarWorld are seeking new protections from America’s International Trade Commission (ITC). On August 15th Mr Wardak was one of many to testify that the two firms did not deserve them.
The case pits American solar-cell makers against solar-panel installers. It could have big implications. Solar was the biggest source of power-generating capacity built in America last year, thanks to falling prices (see…Continue reading
THE Innovation, a 147-metre ship docked in Rotterdam, looks like a cross between an oil rig and a robot from a “Transformers” film. Her crane has been loading on giant pipes throughout the night. Soon the ship will travel to sea, where an automated hammer will drive the pipes into the ocean floor to support wind turbines. “Everything in our industry has become larger,” says Koen Vanderbeke of DEME, a Belgian dredging firm that owns the ship. “But we’ve become smarter, too.”
Unlike their counterparts on dry land, marine contractors have made big leaps in productivity in recent years. From dredging and land reclamation to offshore construction of oil platforms, costs have dropped even as the speed and quality of work have increased. In Belgium, home to two of the world’s five biggest dredgers, efficiency gains have been so large that they have skewed productivity figures for the entire building…Continue reading
NINE years ago the first concrete was poured for Berlin Brandenburg airport. It was expected to open in 2012, to cost €1.2bn ($1.8bn) and to welcome 34m passengers each year. Today the only people in its terminals are those with hard hats. Six times over budget, the project has had 66,500 building errors in need of fixing. Last year its spokesman was sacked after calling the project a “shit-show” and saying no manager who was not “addicted to pills” could guarantee an opening date.
Berlin’s airport is an extreme example of a broader problem. Superficially, the construction industry would seem healthy enough. The global market is worth $10trn. Euler Hermes, an insurer, expects 3.5% growth this year. Yet more than 90% of the world’s infrastructure projects are either late or over-budget, says Bent Flyvbjerg of Saïd Business School at Oxford University. Even the sharpest of tech firms suffer. Apple’s new headquarters in Silicon Valley opened two years behind schedule and cost…Continue reading
IN WESTERN countries it is common to talk about American technology being dominant. From an Asian perspective that seems off. Fresh from visiting the region, where buskers and kerbside fishmongers can be paid by presenting a phone, Schumpeter has found it a shock being back in New York. There, buying most things involves signing bits of paper and PIN numbers are viewed as dangerously transgressive. Only 2% of credit- and debit-card transactions in America are authenticated with PIN numbers; 19bn cheques are written in the country every year.
Asian firms have leapfrogged ahead, offering a new model of financial technology. Exhibit A is Ant Financial, a payments company affiliated with Alibaba, one of China’s two giant internet firms (the other is Tencent, whose WeChat messaging app is ubiquitous and supports payments). Ant is popular in China and has ambitions outside it. Already the world’s most valuable “fintech” firm, worth $60bn, it has 520m payments customers at home and its…Continue reading
“I’VE never known it to be an embarrassment for a business leader to be associated with an American president,” declares Max Bazerman of Harvard Business School. Donald Trump, in particular, has positioned himself as a businessman-president, whose corporate acumen would unleash a new era for American business. Investors seemed to believe him—his election prompted a giddy “Trump bump” in the stockmarket—and corporate bosses flocked to his side. This week they fled. For many, it seems as much a clear-eyed business calculation as a moral awakening.
Some distanced themselves more quickly than others. The trigger was Mr Trump’s reluctance to condemn neo-Nazis and white supremacists who staged violent protests in Virginia on August 12th. Kenneth Frazier (pictured), chief executive of Merck, a big pharmaceutical firm, was the first to leave Mr Trump’s advisory council on manufacturing. On August 14th Mr Trump denounced racist groups in a scripted statement. But the bosses of Under Armour, a sporting-goods outfit, and Intel, a computer-chip giant, defected, too.
On August 15th Mr Trump appeared once again to equate white supremacists with demonstrators opposing them. As word leaked the next day that chief executives might resign en masse, Mr Trump swiftly tweeted that he was disbanding his manufacturing council and his strategic and policy forum,…Continue reading
WHEN Heathrow airport opened, in 1946, the only retail facilities were a bar with chintz armchairs and a small newsagent’s. The first terminal was a tent, a far cry from the four halls, resembling vast shopping malls, at the London airport today. Retail spending per passenger is the highest of any airport. This summer’s consumer crazes include Harry Potter wands and cactus-shaped lilos.
Heathrow’s journey from waiting room to retail paradise is the story of many airports. Before the 1980s, most income came from airlines’ landing and passenger-handling charges. Then “non-aeronautical” revenue—from shops, airport parking, car rental and so on—rose to around two-fifths of their revenues, of $152bn worldwide in 2015. But amid signs that non-aeronautical income is peaking, especially in mature aviation markets such as North America and Europe, the industry fears for its business model.
When airports were state-owned, and run not for profit but for the benefit of the…Continue reading
THE headlong plunge of shares in Teva, a pharmaceutical giant—down by over 40% since August 2nd—is causing consternation beyond the firm’s shareholders and employees. The company was founded in Jerusalem in 1901, is the largest in Israel and is the country’s only multinational with its headquarters still at home. Since beginning its rapid expansion abroad in the early 1980s it has been called “the nation’s share” by Israelis, whose pension funds have invested heavily in its success.
That prosperity came chiefly thanks to the firm’s most popular proprietary drug, a bestselling medication for multiple sclerosis called Copaxone. Over the past two decades its sales paid for a global spree of buying generic-drugs competitors. Last year Teva completed its most ambitious purchase, of Actavis Generics, an American generics manufacturer, for $40.5bn; financing the deal took its debt to $35bn. But Teva’s transformation into the…Continue reading
RUPERT MURDOCH’S penchant for mass-market media has made him billions of dollars. It also gets in the way of empire-building. In 2011 News Corp’s bid to take full ownership of Sky, a European pay-TV giant, fell apart amid public rancour over phone hacking by journalists at the News of the World, one of his tabloids (since closed). Now a renewed Murdoch family takeover attempt for Sky, a bid of £11.7bn ($15.2bn) by 21st Century Fox, faces yet more scrutiny over concerns about alleged scurrilous reporting at Fox News, Mr Murdoch’s American cable-news channel.
On August 8th Karen Bradley, Britain’s culture secretary, asked Ofcom, the media regulator which had already reviewed the bid, to take another look to determine whether 21st Century Fox meets Britain’s broadcasting standards. Ms Bradley’s request followed fresh complaints about Fox News from members of parliament, including Ed Miliband, the former leader of the opposition Labour Party, and from…Continue reading
AMERICA is a grumpy and confused place. For an overarching explanation of what has gone wrong, a decline in trust is a good place to start. Trust can be defined as the expectation that other people, or organisations, will act in ways that are fair to you. In the White House and beyond there is precious little of it about. People increasingly view institutions as corrupt, strangers as suspicious, rivals as illegitimate and facts as negotiable.
The share of Americans who say “most people can be trusted” fell from 44% in 1976 to 32% in 2016, according to a survey from the University of Chicago. In a new book, “The Retreat of Western Liberalism”, Edward Luce, a commentator for the Financial Times in Washington, argues that distrust will contribute to America’s decline and eventually, even, to autocracy. Lack of faith is chewed over in boardrooms, too. In his latest letter to shareholders, Jamie Dimon, JPMorgan Chase’s boss, describes trust as America’s…Continue reading
SILICON VALLEY’S leading firms celebrate disruption, but not disruptive employees. Google has found itself at the centre of controversy after an anonymous software engineer, later revealed to be a young Harvard graduate called James Damore, published a ten-page memo on two internal company networks explaining why there are so few women in the upper echelons of the technology industry.
Instead of sexism, he pointed to “biological” factors, such as women’s supposedly greater interest in people and their predisposition to anxiety and stress at work. In promoting gender diversity, he charged, Google silences those people whose political views differ from California’s liberal mainstream.
“DON’T be evil” is Google’s corporate motto. If only it were so simple. The online-search giant is in a tricky spot after an employee published a long, anonymous memo online about why women are under-represented in the technology industry. The main reason may not be sexism, asserted James Damore, the young Harvard-educated software engineer later revealed to be the memo’s author, but biological factors. Women are more interested in people and emotions, he wrote, and tend towards “neuroticism”, meaning they are more anxious than men and worse at handling high-stress jobs.
The ten-page memo also lamented liberal Silicon Valley’s new willingness to “discriminate to create equal representation” and its reluctance to hear opinions that clash with the mainstream view on diversity. On August 7th Mr Damore told Bloomberg, a news service, that he had been fired by Google. Sundar Pichai, the company’s boss, said that portions of the memo violated its code of conduct…Continue reading
ROLE models for women in business are still too rare, not least in Britain. Last November an independent review backed by the government urged FTSE 100 companies to raise the share of women on their boards from 27% to 33% by 2020. Sadly, that push this week lost one of its leading champions, Helen Alexander, the deputy chair of the review.
Business had no better ambassador. She was self-effacing but a world-class networker—a winning combination that helps to explain, along with her intelligence and charm, why all sorts of firms flocked to have her on their board (from Northern Foods to Centrica, Rolls-Royce and the British arm of Huawei), to advise them (Bain Capital) or to chair them (the Port of London Authority and, more recently, UBM, an events business). In 2009 she became the first woman to be president of the Confederation of British Industry, the country’s main employers’ group.
But Helen had built her reputation in the media industry. From 1997 to…Continue reading
“MUTUAL benefit, joint responsibility and shared destiny,” sings a choir of enthusiastic schoolgirls in a music video called “The Belt and Road, Sing Along” from Xinhua, a news service run by the Chinese government, that mixes shots of cranes and shipping containers with people enjoying foreign landmarks. Western firms are scarcely less optimistic. Launched by China in 2013, the One Belt, One Road policy, known as OBOR, has two parts. There is a land-based “belt” from China to Europe, evoking old Silk Road trade paths, then a “road” referring to ancient maritime routes.
OBOR will span 65 countries (see map), and China has so far invested over $900bn in projects ranging from highways in Pakistan to railway lines in Thailand. Western multinationals, spotting a bonanza, are selling billions of dollars of equipment, technology and services to Chinese firms building along it.
America’s General Electric (GE) made sales of $2.3bn in equipment orders from OBOR projects in 2016,…Continue reading
“DON’T you know about our summer?” asks a spokesperson of a Swedish multinational, himself presumably on holiday as kids chirp in the background. Almost everyone is gone until September, he says. At a German multinational, “the whole board is away for August,” admits a spokesperson. Faced with a slew of out-of-office messages across corporate Europe, there seems little choice for a business correspondent but to report on the phenomenon itself.
The practice of collectively taking July or August off dates from the Industrial Revolution, when it made sense to send off all assembly-line workers simultaneously. In England’s north entire factories used to descend on the same resorts. As any tourist who has found themselves in front of an cream shop that is closed during a sizzling southern European summer will know, it has spread beyond factory jobs.
Until 2015 France had a rule that mandated some bakeries to stay open in August, so that Parisians—or rather…Continue reading
THE modern pharmaceutical firm lives or dies on the strength of its drug portfolio. As patents expire on lucrative medicines, they must replace the income that has been lost by inventing new drugs, or buying them in from outside. Both paths are expensive. But the costs of failure are greater, and this is how it was possible for a large and successful firm—such as British-based AstraZeneca—to shed 15% of its market value in a single day last week. Around £10bn ($13.2bn) was lost on news of disappointing results in one of its clinical trials (its shares have since rebounded by 4%).
The trial was to find out if a pair of drugs would treat a form of lung cancer. The drug, Imfinzi, and the experimental drug tremelimumab, belong to a new category of immunotherapy medicines called “checkpoint inhibitors”. Similar drugs are made by Bristol Myers Squibb (BMS), by Merck in America and Roche, a Swiss firm. In an interim finding, it was reported that Astra’s combination did not offer an…Continue reading
ONE reason for Italian anger over the decision on July 27th by Emmanuel Macron, France’s president, to stop Fincantieri, a shipbuilder from Trieste, winning control of a French shipyard at Saint-Nazaire, was that recent cross-border deals have mostly gone France’s way. Italian businesspeople have grown nervous about French firms’ “colonisation” by means of acquisitions in luxury goods, media and telecoms, including the €46bn ($55bn) merger between Luxottica, an Italian maker of spectacles, and France’s Essilor, announced in January (the group’s headquarters will be in Paris). The bad taste will linger even if the two governments strike a deal over Saint-Nazaire by the autumn, as they have pledged.
Yet Mr Macron’s move has been even more dismaying for those at home who want the state to get on with privatisation. During his presidential run Mr Macron promised to raise €10bn from sales of some of the state’s sprawling portfolio of holdings in firms. The aim was to pay…Continue reading
FORGET your subscription to Netflix. Would you pay $5 a month for a collection of TV channels that gave you programmes such as “90 Day Fiancé”, “Pit Bulls and Parolees”, “My Cat from Hell”, “Worst Cooks in America” and “Shark Week”? Irresistible as this may seem, it is not yet on offer. But many believe that it has come closer. Discovery, a cable-network group, agreed on July 31st to buy another: Scripps Networks Interactive, owner of Food Network and HGTV, among other channels, in a $14.6bn deal. The combined firm will have 19 lifestyle- and reality-television-oriented channels including Animal Planet, DIY Network, Travel Channel and the flagship Discovery Channel (home of “Shark Week”).
The impetus for the combination is the declining market in America for expensive pay-TV bundles of 200 channels, which can cost close to $100 a month. In the past few years millions of consumers have spurned such bloated packages for…Continue reading
OF THE world’s three great commercial centres—New York, London and Hong Kong—two are on the defensive. London faces a rupture with the European Union, which wants to seize the City’s euro-related activities and shift them inside the currency zone. In Hong Kong the fear is of deeper assimilation by mainland China, followed by irrelevance.
Entrepots, after all, can become obsolete. Venice once teemed with merchants, not tourists. Yet while London’s problem is complacency, Hong Kong’s pessimism seems overdone. It remains vital both to China and to the country’s trading partners—the adaptor that converts the mainland’s financial and legal voltage into the one used by the rest of the world.
Today’s gloom partly reflects a fear of Chinese autocracy. During Schumpeter’s recent visit, Xi Jinping, China’s president, in town for the 20th anniversary of the resumption of mainland rule, warned that, while the constitutional structure of “one country, two…Continue reading
IN THE film “The Devil Wears Prada”, the character of Miranda Priestly, whose role is based on a feared Vogue editor, scolds her new assistant for not understanding fashion. Fashion, she tells her, is whatever a select group of designers and critics says it is. What she does not say, however, is that their judgments are themselves often influenced by another group: fashion forecasters, who predict what will be “in”. Might these seers of style in turn be undone by artificial intelligence (AI)?
Fashion forecasting has always been a peculiar profession. The business came into its own in Paris in the 1960s when agencies began releasing “trend books”, collections of fabrics and design ideas. Retailers use these books for inspiration as they put together designs.
The biggest of these forecasting firms is WGSN, with a market share of 50%. It employs 150 forecasters who scour the world’s catwalks, bars…Continue reading
IT HAS been a turbulent few days for the BBC, Britain’s public broadcaster. On July 19th it published the names of those to whom it pays £150,000 ($195,000) or more a year. The ensuing furore was less over the level of pay, but the differences between men and women. Some female presenters discovered that they earned much less than their male peers. Of the 96 people listed, two-thirds are men; across the BBC, just over half are.
In a petition, female presenters said this was evidence that women at the BBC are paid less than men “for the same work”. Although this may be true for people on the BBC’s list, it is much less clear for the rest of its 9,000 female employees: a gender pay gap at the top of an organisation does not necessarily mean that similar gaps exist at lower levels.
In Britain, as in other European countries, the average gap in pay between men and women in exactly the same jobs is tiny or non-existent, according to data for 8.7m employees worldwide gathered by…Continue reading
NAIROBI, Kenya’s capital, is also known as the “Green City in the Sun”. It might as well be called the city of malls: it has never had such a wide choice. The newest outlet, named Two Rivers, sits on a road near the American embassy and contains no less than three different malls in the space of a square mile or so. Here, you can scoff a Burger King before wandering around a huge new Carrefour supermarket to stock up on French cheese, British-made breakfast cereals and Turkish-made clothes. The owners proudly proclaim that it is sub-Saharan Africa’s biggest mall. It is certainly among the glitziest.
And yet walking into Two Rivers is an odd experience. The scale is huge, but the place is eerily quiet. More than a few shopfronts are empty, with hoardings instead of windows. Those that are occupied have a mere trickle of customers, and the goods they sell—furniture, clothes, electronics—are ambitiously priced. Two Rivers feels a bit like a Potemkin village, projecting an illusion…Continue reading
STRENGTH and reliability were once the watchwords of Germany’s carmakers. Tardiness and scheming seem more apt terms now. Nearly two years after Volkswagen (VW) was caught rigging emissions tests, the difficulties continue to pile up. Europe is turning against diesel, and even petrol. And German firms are facing accusations of collusive behaviour, including claims of more widespread rigging of emissions tests for diesel engines.
Diesel’s days look numbered. Sales in Europe are falling fast. Before VW’s misdemeanours came to light, they accounted for over half the market in large European countries. No longer: Morgan Stanley, a bank, notes that diesel passenger cars took less than 39% of sales in Germany in June. Another bank predicts that diesel’s share will soon drop to 30% across Europe.
Dismay over premature deaths caused by pollution is one reason. The European Environment Agency says smog causes nearly half a million early deaths in Europe annually. Diesel engines…Continue reading
NOT since the dotcom boom at the turn of the century have technology shares been on such a tear. On July 19th the S&P 500 index of information-technology stocks hit a record high, closing above its previous peak in March 2000 (see Buttonwood). As titans like Google, Facebook and Amazon hog the limelight, other firms can go unnoticed. One that deserves more attention is Priceline, the world’s largest onlinetravel company.
Those old enough to remember the dotcom boom may still associate Priceline, which was founded in 1997, with its “name your own price” feature, which let consumers bid for hotel rooms and flights. Today it is a Goliath. Its stable of online sites for booking hotels, cars, flights and restaurants spans the world and includes Booking.com, Kayak, Agoda and OpenTable. Over the past decade Priceline’s pre-tax earnings…Continue reading
HONEST souls intent on paying full whack for the music they listen to used to have a hard time in China. In the era of compact discs, rare was the shop which did not sell counterfeits. The same held true when discs turned into downloads and online streams of songs: hardly any service charged money.
Slowly but surely, China is becoming a market where people pay for music. Over the past five years, digital-music revenues for the recording industry nearly quadrupled, to $195m; most of that amount comes from music streaming (see chart). That sum may still be a tiny fraction of the global total of $7.8bn, but streaming has clearly taken off in China.
FOR A man poised for combat with evil spirits, Philippe Moscato looks remarkably at ease. In casual clothes and chatting about the tools of his trade—a “Vogel” crystal, compass, steel crucifix, pendulum and bag of salt from Jerusalem—he says he can deliver unreal results. Hired to exorcise an apartment in a wealthy district of central Paris, he predicts that the air will change. In the winter, he says, the owners will no longer need their central heating, the result of beneficial vibrations.
Mr Moscato’s work involves first waggling a pendulum, supposedly to assess the flat’s readiness, then lighting a candle, reciting from an exorcism manual, before blessing salty water that he splashes in every room. As he sprinkles, he delivers a flow of incantations. For an hour’s work he pockets €155 ($178). He has requests three or four times a week to de-spook property, and exorcises a person on average once a week. Paris, Lyon and the French Riviera are the areas most contaminated…Continue reading
GROOT, a character from Disney’s film “Guardians of the Galaxy”, is usually mass-produced by the entertainment company as a small, collectable figurine and sold by retailers such as Toys “R” Us. But just before the release of the second film in the franchise earlier this year, Byambasuren Erdenejargal, a Mongolian enthusiast, noticed that people in a 3D-printing group on Facebook were searching for a computer model of Groot. So Mr Erdenejargal decided to create one. He spent four days perfecting the design and its printability before uploading his creation to Thingiverse, an online 3D-printing community based in New York. His digital model of the arboreal creature has since been downloaded (and probably printed in physical form) over 75,000 times.
Fans of popular TV programmes and films have long used arts and crafts to express their attachment to fictional characters. Etsy, an online marketplace for artisanal products, is full of…Continue reading
WHEN the deal was struck just over a decade ago, for $1.8bn, 666 Fifth Avenue, a 41-storey Manhattan skyscraper, became the most expensive office building ever sold in America. Now it is in limbo, awaiting billions of dollars of investment to rebuild it and raise it almost twice as high. Across the Hudson River, another hunt for money is under way, to build a property called One Journal Square in Jersey City. In June a property-investing start-up called Cadre attracted financial backing from Silicon Valley luminaries including Andreessen Horowitz, a venture-capital company.
The thread linking these ventures is Jared Kushner, Donald Trump’s senior adviser and son-in-law, whose family business, like that of the president, is in property. Mr Kushner helped conceive all three projects. He has a “passive ownership interest” in Cadre (meaning he is not actively involved in its management). His family co-owns 666 Fifth Avenue and One Journal Square.
Unlike the president, Mr…Continue reading
“PRETTY close to a laughing stock.” That is Walter Shaub’s verdict on America’s standing in the world, at least from an ethics point of view, under President Donald Trump. Mr Shaub’s view counts: he stepped down this week as head of the Office of Government Ethics, a federal watchdog.
He is leaving his job six months early, frustrated at the president’s failure to separate himself from his businesses, at White House foot-dragging on disclosing ethics waivers for staff, at its failure to admonish a Trump adviser who plugged the family’s products in an interview, and more. “It’s hard for the United States to pursue international anticorruption and ethics initiatives when we’re not even keeping our own side of the street clean,” Mr Shaub told the New York Times.
No American leader has ever entered office with such wide business interests as Mr Trump. In the context of the country’s corporate…Continue reading
IN THE litany of bosses’ gripes about Brazil’s inclement business climate, rigid labour laws vie for pride of place with its convoluted tax laws and its licensing rules (on everything from health and safety to protection of cultural heritage). No wonder: Brazil ranks a miserable 117th out of 138 countries on labour-market efficiency, according to the World Economic Forum. Its rigid labour law was transplanted from Benito Mussolini’s Italy in 1943. Employers find it thoroughly unsuited to a modern economy and cheered on July 13th, when the president, Michel Temer, signed into law the biggest overhaul of the unwieldy statute in 50 years.
The reform is a big victory for the unpopular Mr Temer, who is under investigation in a corruption scandal (he denies wrongdoing). It introduces more flexible working hours, eases restrictions on part-time work, relaxes how workers can divvy up their holidays and cuts the statutory lunch hour to 30 minutes. It also scraps dues that all employees must pay to…Continue reading
IT IS said that Travis Kalanick, who resigned as Uber’s boss last month, has been reading Shakespeare’s “Henry V”. Prince Hal’s transformation, from wastrel prince to sober monarch, is doubtless one he would like to emulate. But as a guide to the ride-hailing firm’s financial dilemma, “Macbeth” is the best play. This line especially resonates: “I am in blood stepp’d in so far that, should I wade no more, returning were as tedious as go o’er.”
Uber has bled money for years in an attempt to become the absolute ruler of its industry. Once Mr Kalanick’s replacement is found, voices will whisper that the firm, like Macbeth himself, is in too deep to alter course. But the new boss must change Uber from a company that sacrifices anything for its ambitions, to one which has a realistic valuation and uses resources efficiently.
Its product is elegantly simple. Uber makes a market between drivers and passengers and takes a cut of about a fifth of the fare. The…Continue reading
THE factory of the future will be a building stuffed full of robots making robots. A factory in Amberg, a small town in Bavaria, is not quite that, but it gets close. The plant is run by Siemens, a German engineering giant, and it makes industrial computer-control systems, which are essential bits of kit used in a variety of automated systems, including the factory’s own production lines.
The Amberg plant is bright, airy and squeaky clean. It produces 15m units a year—a tenfold increase since opening in 1989, and without the building being expanded or any great increase in the 1,200 workers employed in three shifts. (Production is about 75% automated, as Siemens reckons some tasks are still best done by humans.) The defect rate is close to zero, as 99.9988% of units require no adjustment, a remarkable feat considering they come in more than 1,000 different varieties.
Such achievements are largely down to the factory’s “digital twin”. For there is another factory, a…Continue reading
A DECADES-old dream of many low-cost carriers (LCCs), to break into the market for long-haul flights, has also been a long-standing nightmare for executives at full-service airlines, who earn their corn chiefly on such routes. So a series of setbacks for Norwegian, the latest LCC to try its hand at long-haul flights, has set off a round of Schadenfreude at established airlines across Europe. On July 13th, Norwegian revealed a disappointing set of results for the three months to June. A week earlier its chief financial officer of 15 years, Frode Foss, resigned with immediate effect, sending the share price down by 8%. Over the past year the shares have lost a third in value, as investors grow nervous.
The worries go back to Norwegian’s decision to begin long-haul flights. Founded in 1993 by Bjørn Kjos, still its CEO and biggest shareholder, it took over some domestic routes in Norway from a bankrupt charter…Continue reading
STONECUTTERS ISLAND in Hong Kong used to be a favoured habitat for poisonous snakes and eye-catching birds such as the white-bellied sea eagle. Thanks to Hong Kong’s rapid development, it is no longer so hospitable. Its sky is full of gantry cranes, stacking 20-foot-long shipping containers in multicoloured tessellations, like giant Lego bricks. A cluster of decorative containers, daubed in graffiti, line the perimeter of container terminal eight, which is partly operated by COSCO, a state-owned Chinese shipping giant. In bright yellow lettering, one slogan instructs passers-by to “Respect Past, Embrace Future”.
Few Hong Kong companies have as much to tell about the past as Orient Overseas Container Line (OOCL), the world’s seventh-biggest container shipping line. Its founder, Tung Chao-yung, owned the first Chinese-crewed steamship to travel from Shanghai to France in 1947, and went on to build a shipping empire of over 150 vessels. His…Continue reading
A GOOD fit is everything, stylists often counsel, but in assessing its market America’s fashion business appears to have mislaid the measuring tape. A frequently-cited study done a few years ago by Plunkett Research, a market-research firm, found that 67% of American women were “plus-size”, meaning size 14 or larger. That figure will not have changed much, but in 2016, only 18% of clothing sold was plus-size, according to NPD Group, another research firm.
Designers and retailers have long thought of the plus-size segment as high-risk. Predicting what these customers will buy can be difficult, as they tend to be more cautious about styles. Making larger clothes is more expensive; higher costs for fabric cannot always be passed on to consumers. In turn, plus-size women shopped less because the industry was not serving them well. “We have money but nowhere to spend it,” says Kristine Thompson, who runs a blog called Trendy Curvy and has nearly…Continue reading