Destroying American Jobs (ie Kodak)

[glatt]

[ZenGum]

Originally Posted by tw

That is what so many thought five years ago. Then Amazon came out with the Kindle. Amazon now sells more books electronically than in paper.

That is a different product.

We were talking about office printers. No one prints a novel to read. Office printers are used to print things like meeting agendas, minutes, annual reports, contracts, things like that, which are not read passively like a novel but studied and marked with a pen.

The printing of these things is still increasing. See Merc's post.

Your "buggy whip" comments remind me of that (possibly mythical) quote that someone said to Henry Ford in about 1920, to stop messing about with gas engines because pretty soon everything will be electric. Maybe one day, but it's further off than you think.

[tw]

AT&T pioneered the transistor, Telstar, laser, Unix OS, advanced programming languages, telecommunications, cell phones, submarine optical communication, digital switching, and even what is now a standard option for all homes - telephone, internet, and broadcasting all on one cable. The so called "Triple Play". Instead, AT&T management either stifled the innovation, refused to upgrade, or simply sold off a crown jewel so that a money losing operation could claim a few more years of profit. Even the Bell Labs are owned by people more innovative - the French. Eventually all that was left was their wireless business. To avert bankruptcy, AT&T sold itself to Southwest Bell. Purchased mostly for its name.

General Motors played the same game for over 30 years. Selling or mortgaging everything to claim profits that really did not exist. Then blamed the government, economy, unions, Japanese, taxes, and anything else they could rather than admit business school graduates design bad cars. The Volt and Camaro being latest examples.

As paper becomes less desirable and popular (in books, newspapers, Postal service, business records, financial transactions, currency, etc), some companies would rather reinvent the paper printing industry. Why are so many once American institutions simply mortgaging themselves over the past 20 and 35 years rather than innovate? Major changes in how American business works and the resulting diminished productivity take that long to finally appear on spread sheets.

A company that invented the digital camera - and could not bother to profit from it - now only has patents left. Meanwhile, it stupidly thinks it will become profitable by making paper printers. Nobody is offering to buy their only remaining assets - patents.

From the Washington Post of 4 Jan 2012:

Wall Street Journal report says Kodak might file for bankruptcy in coming weeks
An uncomfortable suspicion that an icon of American business may have no future pushed investors to dump stock in Eastman Kodak Co. Wednesday.

The ailing photography pioneer's shares fell to a new all-time low after the Wall Street Journal reported that Kodak is preparing for a Chapter 11 filing "in the coming weeks" should it fail to sell a trove of 1,100 digital-imaging patents.

Analysts have said the patents could fetch $2 billion to $3 billion, but no takers have emerged since Kodak started shopping them around in July.

In November, the 131-year-old company said it could run out of cash in a year if it didn't sell the patents. Even as it looked to a future rooted in its emerging printer business, the company was reporting a third-quarter loss of $222 million - its ninth quarterly loss in three years - and it said its cash reserves had fallen 10 percent in three months.

A company with management educated by the same people who educated George Jr will even deny they are harming America. Eventually, even Wall Street must stop denying reality. After all, any company foolishly turning to paper as its future can only be daft.

Kodak was kept alive by a Wall Street that will lend to buggy whip industries rather than to innovative ones. It is good for Kodak to sell its last remaining asset so that Kodak can claim a few more years of profits? Another money game so popular since 1980. A patriotic Wall Street would have demanded that Kodak get into some innovative business.

Even digital cameras (first developed and then all but abandoned by Kodak) are no longer a growth industry.

The New York Stock Exchange warned Kodak this week that its shares would be "delisted" - or dropped from the exchange's listings - if they stay below $1 for six more months.

Eastman Kodak was selling on 4 Jan 'after hours' for $0.44 per share. Less than half of what the stock sold for over 100 years ago.

Of course, someone might fire their president. It took Obama to fire GM's only problem. But Wall Street, that could, will only enrich themselves at the expense of workers and the nation. Money can be made by prolonging existing decay. It is how Wall Street now works. Massive profits at the expense of workers and all other Americans.

Kodak's only future is in a business that has now started a slow decline. Is no longer a growth industry. What was clearly a growth industry 30 years ago is now following telegraphs, tape recorders, and vacuum tubes.

[xoxoxoBruce]

I was talking with my solidly Republican, big business, small government, brother at Christmas. We were talking about the state of the nation and politics, when out of the blue he says, "The trouble with this country is MBAs". He couldn't understand why I laughed.

[Undertoad]

J's daughter decided not to go to law school and to go for an MBA instead. I regard this as a slight improvement, from terrible to just very bad.

[Happy Monkey]

No, MBAs are worse. They're the lawyers' bosses.

[tw]

From The Economist of 31 Dec 2011 entitled "Take five":

In recent years, many big drug companies have gutted their research departments. This is partly because those department have failed to cope up with new "blockbuster" drugs of the sort that created Big Pharma in the first place, and partly because the big firms' bosses had hoped that smaller biotechnology companies, of the sort Dr DePinto has helped set up, would do the hard work of drug discovery instead, and then let themselves be bought by the big firms.

Unfortunately, it hasn't quite worked out like that. The output of the biotech firms has been a trickle, rather than a torrent. The have been one of the worst performing parts of the private equity market since 2007.

Today's results are dependent of what was in the innovation pipeline seven and twelve years ago. But cost controls - what MBAs do - means innovation is gleefully stifled. Management that 'does not come from where the work gets done' means research and innovation cannot be productive. When MBAs became CEOs of Big Pharma, then blockbuster drugs were not being developed in the 1990s. With stifled research in the 1990s, the blockbuster drugs in 2000s could not exist. So Big Pharma did after 2000 what any MBA would do. As AT&T, GM, and Eastman Kodak had also done. They played money games. And went running to wacko extremists in government for protection. Rather than fire the number one problem (as Obama did to Wagoner in GM), American wacko extremists (George Jr et al) created Federal laws to keep American drug prices 40% higher. The Economist summarizes the problem.


Merck is a perfect example of why America must surrender jobs to foreigners (ie China). Why under 35 year olds that once made $45K in 1992 and $47K in 1999 (when America had an educated president) were only making $32K in 2007 (when America had an MBA president).

Merck was once one of the best Big Pharma companies with new and innovative drugs. Then Raymond V. Gilmartin took over in 1994. A 1968 Harvard Business School graduate. In the 2000s Merck was crying because it had no blockbuster drugs in the pipeline. Gilmartin did what MBAs do – stifle innovation to increase profits. He even lied about health problems created by a profit center - Vioxx. Under Gilmartin, the problem was known. As an MBA, he quashed honesty to make profits. Rather than do what made Merck great, the MBA hired lawyers and cost controllers. While stifling the innovation pipeline.

Gilmartin is now doing the only thing he understands. He a business management professor in Harvard. Teaching more students how to stifle innovation in the name of profits. To enrich the rich while destroying American jobs.

Merck's previous CEO was Roy Vagelos. Educated in Chemistry at U of Penn. Became a medical doctor in Columbia U in 1954. Spent time as a research doctor in places such as National Institute of Health. Authored over 100 scientific papers. Was the Chief Scientist at Merck before becoming CEO. Came from where the work gets done. Which is a definition of an American patriot.

Vagelos is the reason why Merck was the Big Pharma benchmark for innovation. Could develop so many blockbuster anti-cholesterol and statin drugs including Zocor. Merck did much of the research (ie the 4S study) that proved how cholesterol caused deaths and how the problem could be averted with drugs. Ten years after Vagelos retired, Merck was still earning profits because that CEO was an American patriot. He was not a dumb and evil business school graduate - Gilmartin.

Merck no longer has blockbuster drugs in their innovation pipeline. Like any anti-American company (such as Fiorina at HP), Merck's lackluster future is directly traceable to doing what is taught in business schools. We can even quantify how bad their MBA CEO Gilmartin was. He was paid $37million annually. While productive and patriotic companies such as Google pay their CEO Eric Schmidt $500thousand annually.

Reality is so obvious - ie Wall Street - that only a wacko extremist could deny it.

The Economist says why American Big Pharma was running to government for protection. And got it from another MBA named George Jr. (Same wackos who loved George Jr also called Sen John McCain a liberal.)

Thanks to wacko extremists, Federal law keeps American drug prices 40% higher compared to the same drug sold elsewhere in the world. Another trophy to an MBA education. Money games and lawyers (ie Vioxx) to mask innovations and honesty that MBAs stifle. An MBA who was running Merck into the ground ten plus years ago demonstrates why The Economist says Big Pharma is now becoming a welfare case. As anti-American as the heart attack of America: Chevy.

Merck was once patriotic under Roy Vagelos - who came from where the work gets done. The Economist describes what happens when top management is dumb – is educated in business schools.

[tw]

Originally Posted by Happy Monkey

No, MBAs are worse. They're the lawyers' bosses.

The current CEO of Merck is Kenneth C Frazier. A Poly Sci graduate (from Penn State who is also on their pedophile board) who then graduated from Harvard Law. In a company dominated by MBAs, Frazier was their choice because he was the lawyer responsible for covering up and subverting lawsuits for Vioxx. A drug that Merck knew causes heart disease and strokes.

So they made him president of their global health unit. Since as a lawyer or MBA in America, he must be smarter. He is not Merck's CEO because he knows so much about research, innovation, and things that advance mankind. After all, he even spun lies and a coverup in court so that Merck would be not guilty for harming people with Vioxx. Reality: Merck withheld information about Vioxx for over five years, resulting in between 88,000 and 140,000 cases of serious heart disease. No problem. A lawyer’s job is to lie and protect profits at the expense of human life. He will make a fine CEO - according to MBA school concepts.

When a new drug (vorapaxar) was rejected by a safety panel, Frazier said, "Scientific innovation is hard." H-h-h-a-a-r-d was also a problem for George Jr. Anything is hard when not educated in how get the work done.

Why would anyone put a lawyer as head of a drug company? Because winning lawsuits is more important than developing new drugs and advancing mankind?

Welcome to why so many American jobs must be shipped overseas. Then the Tea Party blames liberals, illegal immigrants, evil foreigners, and Obama. Rather than CEOs so corrupt as to say, "the purpose of a business is profits".

[tw]

Originally Posted by ZenGum

Office printers are used to print things like meeting agendas, minutes, annual reports, contracts, things like that, which are not read passively like a novel but studied and marked with a pen.

Decades previous paper has moved on to smart phones, electronic calendars, tablets, and products yet to be developed. Companies such as Kodak hoped to profit by reinventing old technology products. Kodak is now bankrupt and delisted from the NY Stock exchange.

FujiFilm also had Kodak's problem. So it moved from buggy whip products to new technologies. For example, flat LCD screens (new technologies) have a wider viewing angle because FujiFilm innovated. Fujifilm also shifted into high tech chemicals.

An innovative Kodak would be making 3D printers. Or tablets. Or 3D movie technology. Or advanced optics and masks necessary for producting seminconductor and MEMs devices. Not possible in many American companies (not just Kodak) with a buggy whip mentality. As a result, America now another problem. A shortage of people with technical abilities necessary to innovate.

NY Times discusses a larger problem created by so many big American companies with Kodak’s attitude. Apple management defines the problem with examples.

[tw]

From the NY Times of 21 Jan 2012:

How U.S. Lost Out on iPhone Work
But as Steven P. Jobs of Apple spoke, President Obama interrupted with an inquiry of his own: what would it take to make iPhones in the United States? ...

Why can't that work come home? Mr. Obama asked.

Mr. Jobs's reply was unambiguous. "Those jobs aren't coming back," he said, according to another dinner guest.

The president's question touched upon a central conviction at Apple. It isn't just that workers are cheaper abroad. Rather, Apple's executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that "Made in the U.S.A." is no longer a viable option for most Apple products. ...


[In 2007] Mr. Jobs angrily held up his iPhone, ... People will carry this phone in their pocket, he said. People also carry their keys in their pocket. "I won't sell a product that gets scratched," he said tensely. The only solution was using unscratchable glass instead. ...

After one executive left that meeting, he booked a flight to Shenzhen, China. If Mr. Jobs wanted perfect, there was nowhere else to go. ...


The answers, almost every time, were found outside the United States. Though components differ between versions, all iPhones contain hundreds of parts, an estimated 90 percent of which are manufactured abroad. Advanced semiconductors have come from Germany and Taiwan, memory from Korea and Japan, display panels and circuitry from Korea and Taiwan, chipsets from Europe and rare metals from Africa and Asia. And all of it is put together in China. ...

"The entire supply chain is in China now," said another former high-ranking Apple executive. "You need a thousand rubber gaskets? That's the factory next door. You need a million screws? That factory is a block away. You need that screw made a little bit different? It will take three hours." ...


An eight-hour drive from that glass factory is a complex, known informally as Foxconn City, where the iPhone is assembled. To Apple executives, Foxconn City was further evidence that China could deliver workers - and diligence - that outpaced their American counterparts.

That's because nothing like Foxconn City exists in the United States. ...

Another critical advantage for Apple was that China provided engineers at a scale the United States could not match. ...

Apple executives believe there simply aren't enough American workers with the skills the company needs or factories with sufficient speed and flexibility. Other companies that work with Apple, like Corning, also say they must go abroad. ...

"We shouldn't be criticized for using Chinese workers," a current Apple executive said. "The U.S. has stopped producing people with the skills we need."

[classicman]

“We sell iPhones in over a hundred countries,” a current Apple executive said.
“We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.”

“Companies once felt an obligation to support American workers, even when it wasn’t the best financial choice,” said Betsey Stevenson, the chief economist at the Labor Department until last September. “That’s disappeared. Profits and efficiency have trumped generosity.”

Companies and other economists say that notion is naïve. Though Americans are among the most educated workers in the world, the nation has stopped training enough people in the mid-level skills that factories need, executives say.

To thrive, companies argue they need to move work where it can generate enough profits to keep paying for innovation. Doing otherwise risks losing even more American jobs over time, as evidenced by the legions of once-proud domestic manufacturers — including G.M. and others — that have shrunk as nimble competitors have emerged.

Link

[infinite monkey]

[regular.joe]

I don't know about MBAs and Lawyers. I think that we build iPhones in China for the same reason we don't see blond heads in a tomato field in California.

[Undertoad]

Originally Posted by the part tw didn't excerpt

The facility has 230,000 employees, many working six days a week, often spending up to 12 hours a day at the plant. Over a quarter of Foxconn’s work force lives in company barracks and many workers earn less than $17 a day.
...
“They could hire 3,000 people overnight,” said Jennifer Rigoni, who was Apple’s worldwide supply demand manager until 2010, but declined to discuss specifics of her work. “What U.S. plant can find 3,000 people overnight and convince them to live in dorms?”

Buck fifty an hour, live at the company dorm, 72-hour work week. Yes, these do not sound like "American" jobs... post labor movement that is.

[tw]

Originally Posted by Undertoad

Buck fifty an hour, live at the company dorm, 72-hour work week. Yes, these do not sound like "American" jobs... post labor movement that is.

The article states bluntly that labor is only a tiny part of costs. For example, iMacs (and other PCs) that cost $22 in America cost $6 in China. And both sell for $thousands with $hundreds in profits. Labor costs are virtually zero in both countries. But in America, technological abilities no longer exist. Shenzhen, China does innovation no longer possible in America.

Wall Street Journal was blunt about this. A CT coil manufacturer foolishly thought as UT posted. At $2 per hour, he would make a fortune in Mexico. Then learned costs were less when using $10 per hour labor in CT. Completely opposite of what UT repeatedly said. He returned to CT years later to save his company. Because labor costs are relevant when myths replace facts. When spread sheets and other myths replace industrial knowledge. American labor that costs five times more money means lower costs. Contrary to sound bytes.

Same myth was promoted by GM. GM's higher costs were not due to unions. That myth was also called brainwashing. Labor is a tiny part of each car - as has been posted with numbers at least five times previously. GM's cars cost more to build than a Mercedes Benz because GM cars were that poorly designed. Took almost twice as much labor to assemble due to insufficient technical knowledge in GM's management.

Apple executives were blunt about something we who do this stuff have been seeing and saying for decades. America has less and less technical abilities every decade. Most of an Apple cannot be done in America. Labor costs are irrelevant. How blunt must the NY Times article be?

What the NY Times did not say. The Silicon Valley discusses ICs. Not integrated circuits. Indians and Chinese who are now more than 50% of new employees. And paid same wages. Why? Because the Silicon Valley has trouble finding Americans with sufficient education and knowledge. Those educated by sound byte myths claim those ICs are hired because they cost less. Nonsense. They are paid same.

A problem so severe that most of what makes an iPhone can no longer be manufactured in America. Apple executives were blunt about it. And still, some ignore facts to instead blame labor cost.

Examples have been posted for years. Many educated by MBA myths blame labor costs rather than insufficient technical knowledge. Too many Americans are educated in communication, finance, law, or business schools. Educated in how to sell off America's wealth while doing nothing productive. Labor costs explain none of this. As Apple executives were so blunt about.

He had to go to Shenzhen, China to find a solution not possible in America. How could a fact made so often and so obvious be ignored?