Thursday, October 11, 2012

Meet the ‘Car Guy’

He is young, energetic and known by his credentials as the quintessential ‘Car Manager’; invaluable traits for Tata Motors as it moves forward

Tata Motors’ front man, Rajiv Dube is one of the most admired top tier executives in the country. From the launch of the Tata Indica V2 to the $230 billion Jaguar-Land Rover deal, the man has been in the limelight through it all. Dube is one of the top contenders for the top job at Tata Motors after Ravi Kant retires this year, and his experiences at the helm of various Tata projects speak for themselves. Currently the President (Passenger Cars), Dube has climbed the ladder remarkably fast and held responsible positions like Senior VP (Passenger Cars) and VP (Manufacturing & Commercial).

Dube has overseen the investment of close to Rs.17.4 billion in new product development. He has had a major role to play in the development and launch of the game changing Indica Vista. Even though Tata Motor’s officials denied any comment on the subject, some analysts suggest that Dube is the quintessential ‘Car Manager’ that Tata Motors was so desperately looking for. As per a stock analyst who did not wish to be named, “A number of people from the top management are eligible for the job. However, there has to be a leader who can check on the fall in sales of Indica at the earliest.” Sirish Chandran, Editor, Overdrive, suggested (without commenting on any specific candidate for the company), “These are difficult times and the convention of business models is changing... Tata needs to find a person who has an international perspective.
 

Source : IIPM Editorial, 2012.

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Wednesday, October 10, 2012

PROFILE: DIGVIJAY SINGH

'Diggi Raja' has attained an enviable political stature, and has kept his feet firmly on the ground

On the personal front, this Raja of Raghogarh is said to be a man who tries painstakingly to keep his words. Talking about returning to Madhya Pradesh politics is like anathema to him. He is happy dispensing his duty as General Secretary of the party. Diggi Raja has command of important states like Uttar Pradesh apart from managing and planning election campaigns, yet he has his feet firmly on the ground. His baiters suggest that his engineering background affects his decision making. For example, he dwells so deeply in any problem that by the time he reaches to the conclusion, the problem loses its relevance. His crusade for poor and landless and plan for redistribution of untilled land made him deeply unpopular among the 'upper castes' in the state. Congress paid the price in 1998 elections. But one of his best friends and one time accomplice of Sanjay Gandhi, Mahesh Joshi, maintains that Singh has always been a man of integrity and that his dependence on bureaucrats dented his popularity.

Singh is also always ready to help everyone, even the people he doesn’t know personally. It is therefore not surprising that the father of Pragya Singh, one of the accused of Malegaon Blasts, has alleged that when Singh was CM, he tried to get her a job. Old habits die hard. Such beamers have troubled Singh from time to time, but he's far too experienced to let them bog him down.


Source : IIPM Editorial, 2012.

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Tuesday, October 09, 2012

WORLD INC: LEADERS IN TURMOIL

...for tightening belts alone won’t work! Some of the world’s leading companies face testing times in 2009 

Swearing by the miseries of world leaders, there should not be even an iota of doubt about how worrisome the future is. It may be too long before the world economy stabilises and given the plight they are in, it is a typical Catch-22 situation. So what is the way out? For starters, they must chalk out plans really fast and not wait for economic conditions to stabilise. Joongi Kim, Associate Dean, Office of International Affairs, South Korea states, “Multinationals have a lot of hidden potential. Once the perceived opacity of the company is lifted, much more upside potential exists.”

So while Sony should focus on creating demand for its products in the home market; it should also try harmonising the business interests of its various units. Rob Enderle of Enderle Group states, “Sony (also) needs massive restructuring.” Arcelor Mittal has a prudent approach as Independent International Investment Research Plc states, “We expect the company’s leading market position, product diversification, internal raw material sourcing and ongoing restructuring activities to aid improvement in top and bottom-lines from FY2010.” Vikram Pandit’s decision to split the giant into two business units – Citicorp and Citi Holdings may bring some relief as it would help manage manpower & operational costs. Even Intel needn’t worry too much, so long as it is able to maintain and strengthen its market leadership. However, 2009 may not be the year of reckoning for Toyota as Markus Leitner, Director, Fitch Ratings explains, “Weak global auto markets will continue to have a negative impact leading to reduced profitability & materially higher financial leverage ratios.” It will have to focus on emerging markets. And the way Time Warner is struggling, it may have to knock hard on the doors of the new President Barack Obama for a bailout! And why not? Desperate times do call for equally desperate measures.


Source : IIPM Editorial, 2012.

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Monday, October 08, 2012

The death of the global auto industry

B&E’s Karan Mehrishi dives deep into the auto quagmire and gasps for breath...

This August 2008 couldn’t have been more ironic. Here I was supposed to file in the most devastating report I have ever made on the global auto industry, and there I had Audi’s offices requesting me to help them understand how Audi compares with other international auto players and the challenges Audi faces. Ironic because my research on America’s ‘greatest’ companies was complete, and the list of American idols – that is, the biggest five loss making companies America had created in the last year – was staring me on the face! These five stalwarts had a combined loss above $80 billion in the year 2007. What stunned me was that the leader of this bunch was clearly General Motors, with an individual loss touching close to a sickening $39 billion!!! Well, when I’d met Rick Wagoner, Chairman, GM, last year to get his exclusive quotes with respect to his $750 million investment in India, I had had no inkling of the times to come, and he’d also been quite confident that “GM wanted to leverage its global resources” to succeed in “such a high growth market.”

Strangely, nobody’s been picking up my phones in GM’s Detroit office since then. But Fritz Henderson, GM President and COO, Detroit, on August 20, 2008, writes in a rare letter to the editor in Wall Street Journal, “In the editorial ‘Can America’s Auto Makers Survive?’, Paul Ingrassia asks whether Detroit’s auto makers can survive. In the case of General Motors, the answer is, emphatically, yes. And not only survive, but thrive... At GM, we’re taking the difficult and necessary steps to reduce our cost structure to be more competitive and build a stronger foundation for our future.” I was stumped. It wasn’t that I was going to analyse the close to $2 billion loss GM suffered in 2005. The fact is that the last six months of GM (January to June 2008) has seen it rake up losses close to another $19 billion. In the last three months (April to June 2008), GM had losses of $15.5 billion! I really couldn’t see where the improvement, that GM President Henderson was referring to, was.

But it’s not as if GM’s alone in the bloodbath. Ford is not too far behind when it comes to sharing in the scathing hits. When William Clay Ford Jr. gave an interview to Planman Media a couple of years back, he had just entered India and was typically gung-ho about cutting it clean very soon. In the first week of August 2008, Ford reported the biggest and worst one quarter loss (April to June 2008) in the history of the corporation! $8.7 billion! Year 2007 loss: $2.7 billion! Year 2006 loss: $12.6 billion!

Not surprisingly, while annual sales have regularly fallen or remained stagnant at GM (2006: $205 billion sales; 2007: $181 billion; 2008 six months: $80.6 billion) and Ford (2006: $160 billion; 2007: $172 billion; 2008 six months: $85 billion), the sales at Toyota (2006: $179 billion; 2007: $202 billion; 2008 six months: $118 billion) and Honda (2006: $84 billion; 2007: $94 billion; 2008 six months: $54 billion) have been constantly rising. But more importantly, companies like Toyota and Honda have raked up humungous profits year after year! Toyota had profits of $11.6 billion, $14 billion and $6.18 billion in 2006, 2007 and the first six months of 2008. While Honda, during the same periods, had profits of $5 billion, $5 billion and close to $2 billion!

Compared to the accumulated profits of $44 billion in the last three years of the fuel-efficient focused Japanese Big 2, the Detroit Big 2 had accumulated losses of a mind numbing $82 billion!!! What gives?!?! That’s when I came across four extremely critical issues that could surely define the reasons why the global auto industry dies sooner than later...

The no-brainer auto issue #1

Understanding the first is unbelievably simple! Fuel-efficient cars [in other words, cars that run on traditional petroleum and give increasing miles per gallon]! The reality is that companies that have focused less on providing high level quality (in terms of say, styling, driving, luxury, SUV experience) and more on providing flat fuel efficiency have succeeded beyond anybody’s expectations. The corollary is that companies that have focused on the opposite have tasted devastating billion dollar losses. It’s obvious that the solution was not something hidden away in strategic thingamajigs. And to say all this as an afterthought is, like I wrote above, a no-brainer. But in truth, the concept that fuel efficient cars are the future, was for every auto major across the world to see. Sadly, the only ones that focused on it with passion were the Japanese giants.


Source : IIPM Editorial, 2012.

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Saturday, October 06, 2012

IRELAND: BAILOUT

The Irish Policymakers Argue that the Country’s Economic Fundamentals are still better than That of Greece, Manish K. Pandey Analyses how Poor are they in Finalising the Rationale Behind Their Arguments 

Though it is expected that the government budget, which is due to be announced in one week, to an extent will scale up the investor confidence (the government announced last week that it plans to reduce the budget deficit by $8.20 billion in 2011 and by a further $12.31 billion over the following three years), investors are yet to be convinced that Ireland can rectify its dire financial situation. In fact, considering the present situation, the government’s aim of bringing the deficit in line with EU fiscal rules of 3% by 2014, from 32% this year, still looks illogically optimistic. Further complicating the situation is the weak economic outlook. In fact, GDP growth is not expected to return to near the rates of the Celtic Tiger years, even in the longer term. As per Moody’s Analytics, Irish GDP is expected to clock an average growth of 2.6% during 2014-2019, way below the 5.5% average reported during 2001-2007. This might force the Irish policymakers to announce even more austere measures in the 2011 budget than previously planned for, which in turn could weigh heavy on the economy’s recovery. Melanie Bowler, London based economist at Moody’s Analytics, too agrees to the fact as she tells B&E, “Higher yields on government bonds will drag on growth by crowding out private consumption and investment. At the same time, it will raise interest payments on government debt, adding to the burden on public finances and limiting other government spending.”

Housing too is likely leave a permanent scar. In fact, much of the surge in unemployment (unemployment rate in Ireland is hovering at a record 13.9%) has come from housing, which before the recession accounted for about 10% of GDP and employed over 10% of the total Irish labour force. These figures have now contracted by over 33%, with residential building shrinking by a whopping 50%.

But the current 90 bn pound bailout package would require the government to impose further spending cuts and tax increases, which means Ireland’s 12.5% corporate tax rate, which is among the lowest in Europe, will be raised. And that’s the first thing we believe Ireland should never do as this will weigh heavy on foreign investment and, in turn, exports, two of the only few factors driving the recovery in Ireland at present. In short, if Ireland were to take the bailout, leave the tax rate untouched, yet work on minimising expenses through other methods, then the current issue might resolve itself in the next half decade, no less.


Source : IIPM Editorial, 2012.

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Friday, October 05, 2012

LANGUAGE BAN: PROTEST IN TIBET AND CHINA; NEWS REVIEW

Restriction on Tibetan Languages in Classrooms is Causing Protests

But more than this, the Tibetan languages per se have stood as the totem poles and vanguards for leading the anti-China movement. Thus, the Chinese regime is hoping that over time, once the newer generations of Tibetans start forgetting their original language, the pre-existent basis of revolt might disappear.

Language based protests across the world have led to huge revolts – even in the Asian continent, Bangladesh is a prime example of how a different language led to a separatist movement from Pakistan, despite both being Islamic states. Will the current issue lead to an endgame?


Source : IIPM Editorial, 2012.
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Monday, September 10, 2012

Hating India is a Democratic right; but not at a cost to India

Blind and fanatical belief in ‘ISMS’, Apart from sheer greed has become the hallmark of activism and ngos in India. hating India is a Democratic right; but not at a cost to India

Nobody (no one at least in his/her right senses) has ever said that balancing these conflicting priorities is simple. It has always been an incredibly tough, complex and demanding challenge, and will always remain so. Well governed societies with dollops of common sense seek a balance between these conflicting priorities. A democracy with the rights to free speech and protest offers the best method of resolving these conflicts. As philosophers have always known: democracy is a terrible way of governing and managing societies, but humanity is yet to find a better way. Indeed, the world is full of ‘isms’ and no sensible person will claim that the ‘ism’ they profess to believe in is the only solution.

The problem with contemporary India is that activists not just blindly believe that their ‘ism’ is the best; they also want to ram it down the throat of all Indians. God knows what ‘ism’ the Goddess of Small Things Arundhati Roy believes in. The fact is: Indian democracy has given her the freedom to rave, rant, protest, write, excoriate, condemn and demonise anything that tickles her fancy in a manner that no other Third World country would allow (I wonder what would be her fate if Arundhati Roy spouted venom of the kind she spouts here in Saudi Arabia or China or any of the hitherto Marxist paradises that existed before the collapse of the Soviet Union in 1991). I personally think she has every right to speak the way she speaks because we are indeed a democracy. In any case, she had publicly seceded from India back in 1998 when the Atal Bihari Vajpayee government went ahead with nuclear tests. The problem is not that. The problem is the utter contempt she has for the other point of view; the complete unwillingness to even consider that India confronts twin problems of internal security threats and human rights abuses. No wonder she was wallowing in ideological pleasure when she described the murderous Maoists as Gandhians with Guns even as they were planning to ambush and kill more than 75 CRPF personnel – most of them poor Indians whose cause she claims to espouse. So she travels from seminar to seminar, rally to rally, protest meet to protest meet condemning the Indian State and the security forces. In her lexicon and world view: the only internal security threat that India faces is the Indian State.

Now, what would happen if policy makers actually implemented her vision and embraced terrorists from Pakistan and her Gandhians with Guns as the real patriots of India? I suspect, she couldn’t care less. As the Activist Number One of India, her job is to denounce and condemn. And Roy – and hundreds of thousands of activists like her in India – have learnt the art of propaganda very well. I feel proud of India as a democracy when people like her rave, rant and shout. But I really start worrying about the future of India when persistent propaganda leads the government to start thinking of doing what she wants. Taken to the logical conclusion, the Roy solution is to dismantle the entire Indian armed forces, the para-military forces and the police.

The manner in which the ilk of Roy are chipping away at the foundations of the Indian State and society is so insidious that many people like you and me do not seem to recognise the terrifying consequences of the sustained hate propaganda they have launched. But I have little doubt that India will soon pay a price.


Source : IIPM Editorial, 2012.
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