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Maybe It’s Time to Boost American Manufacturing

The trade deficit has just hit a 16 month high.  Despite the boost in exports, we are still importing more than we are shipping abroad.   Job cuts are predicted, and it is expe cted he economy may get worse.

Maybe it is time to think about manufacturing here again.  Perhap when we measure the true cost of goods and services we import, it would be cheaper in the long run, overall, to just make them here.   With the changing paradigm of the world economy it’s time to rerun the numbers and take another look at what we truly spend on imports.

We once made stuff.  Not just a few things.  We made a lot of stuff.  Our cars were among the best.   We made durable goods that were actually durable and didn’t fall apart.  Same for garments and other goods.  Our service was among the best in the world.   We were good at our game.

And then we started to believe we shouldn’t manufacture so much.  The lowly manufacturing should be left to the other, developing countries, as this was now a global economy.   We outsourced and imported.   We found where we could make it cheaper and had it made.  Quality control and the toxicity of the materials and chemicals used in the products made in China and elsewhere cased to be a large concern.

And now it’s coming back to bite us.   As the Congress explores loaning money to the auto manufacturers to make them competitive again, perhaps it is time to look at other industries as well.   We could go back to manufacturing shows and even textiles, hard goods.   With the knowledge we have, we can make them technologically viable and environmentally secure.   We could make product that would be better quality than a great many of our imports.

Perhaps it means modifying our consumer mentality.  Rather than buying a dozen cheap acrylic sweaters from China that fall apart with a couple of months, we buy instead a couple of good wool sweaters than could last for years.   We could again review the quality of what we buy and not just the quantity.   We can train domestic workers and cut down on the cost of energy and transportion by making it here and shipping it here, as well as abroad.

It’s an idea.  But may it’s an idea whose time has come.  Again.

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Hire Sales People and Not Just Sales Clerks

Retail sales are down again.   People are pulling back on their purchases.  Instead of sales rising .3 percent, they fell by .3 percent.   So much for predictions.

The only venues with brisk sales are the Costco’s and the Wal-Marts.  Stands to reason since people are bargain hunting and these are the places where you find the bargains.   The mid-sized stores and department stores are hurting, and while the smaller venues and boutiques also feel the pain, I would think there is a better prognosis for their sales figures.

Why?  Because people are preferring either to shop at the big box stores or to make their selections at the more intimate shops.   The intimate shops offer ambiance and selection, attention to detail, while the mid-size and department stores offer you pricing higher than the big box stores with no service.   So now, there is the word–service.

Time was most stores gave you service.  No, you didn’t expect it from the big box stores, but you did get lower pricing instead.   Department stores were supposed to give you service.  Nordstroms was revered for its sales training and service.   Now it is often only slightly better than the other department stores and chain shops were you find the sales person on the phone talking to his or her friends, or studying the different ways to snap and crack chewing gum.  No service.  In fact, to ask the sales person a question makes you feel like you are putting them out.

In certain boutiques not all that much is different.  The sales people are far too caught up in themselves to pay you any mind.   As for what you buy, what do they care?  Buy something and leave them alone.   If they bother to find the size and color you want, they make you feel like it’s a major contribution to the sales effort.

Times was the reason you had service is because managers trained people how to sell and how to give you the service you once received.   It’s probably time to revist those days.  Teach people how to sell, how to deal with customers.  Teach them how not to chew gum and how to stay off their cell phones when customers are in the store.

If you train your sale staff properly, who knows, they may actully be able to sell and not just ring up the cash register.  In other businesses, besides retail, they may sell and not just take orders.   You may be able to actually boost your business when times are tight and people aren’t buying.   Buying, after all is based on perceived need, price and the comfort the customer feels toward you goods and services.  Feels toward you.

If your a a specialty shop or boutique, especially train your people so they act like it is really a specialty shop.  Train them how to assess fit, color, how to make a fuss over the customers, to make them feel they are special.   They are, after all.  They have selected your shop instead of the other thousands.

Those that know how to sell will do better than those who do not.   The poor economic times practically dictate this rule.   Unless you have a big box store.   No?   Then hire sales people.  And check them out before you hire.

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There’s a Thief in Every Business Section

There are a lot of true crime buffs.   We all know a few.   Some are fascinated by the more bizarre, the murders with strange sex twists.   Others dwell on the pathos, abducted kids and murdered spouses.   The media is filled with stories and these stories as small in scope as they sometimes are will often take priority over more major events.   People are fascinated by what gets to them emotionally, more than what gets to them intellectually.   This has been proven time and time again.

For me, I prefer the business section for my true crime stories.  Nary a day seems to go by when there isn’t some article about people being arrested for one scam or another.  Most often they victimize people with the Ponzi scheme, promising big returns and then using Peter’s money to pay Paul.  Until they are caught.  They then make headlines where it is reported they have lived a lavish lifestyle on investors’ money and all the promised returns are as bogus as the business plan.

There are any number of wire fraud cases, SEC infractions, chicanery, stock frauds, stock option and securities frauds.   Recently the Los Angeles Times reported an Orange County Salesman was ordered to repay $66 million to investors in a securities scam.   James Halstead was indicted on 16 counts and has denied any wrongdoing.  A few years ago Santa Barbara’s own Reed Slatkin defrauded fellow investors in the largest Ponzi scheme in history.   He was sentenced to 14 years for that.

One wonders how these scam artists keep getting away with what are essentially the same scams in different packaging.   You would think with so many of these cases making headlines, the investors would run background checks on these guys.   You think, before turning over what is usually a substantial sum, they would do the research and see if these people are who they really say they are.  They would look deeper and review the financial histories of these characters, measure their successes, if any.   They would ask around and see if these guys were reputable.  No, it doesn’t happen.   They ask their friends who are taken in by the same line of bull as they believed.

In the case of Slatkin, a simple check on at least one of his cohorts would reveal previous criminal histories for financial fraud.   If you look deeper into the other characters you will most often find it is a good sales game supported by hype supported by nothing.   And then the victims all get on the news for their lost millions to tell their tales of woe.   Inevitably, there is one character who has dumped his life savings into the scam.   To get nothing back.   Well, they do say buyer beware and you can’t cheat an honest man, and all sorts of things that lead you to believe that greed often gets in the way of a clear vision.

There are ways to research people, before you invest your hard earned cash.  There are background searches for business research and for potential venture partnerships.   Take advantage of these searches.   The money you save could be your own.

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Giving CEO’s Too Much Money?

There is a growing controversy about the hefty salaries and bonus companies are awarding the CEO’s and other C Level Executives.   The controversy may have reached critical mass when the politicians climbed in on the act, decrying the bonuses to be awarded to the chief executives at Freed Mac and Fannie Mae.   It’s the rare time when Republicans and Democrats seem to agree.

I have always found it odd that cheif executives are rewarded for their failures.   I realize they are contracted to receive these weighty bonuses, but shouldn’t these bonuses be performance based.   With Fannie Mae and Freedie Mac it is difficult to see how these guys should be rewarded for running these businesses into the ground.   In this case the taxpayers are going to pay, and pay plenty, so why must they pay extra to deliver a few million bucks as the screw ups take their leave?

More than a few influential folk have categorized the bonuses and salaries of key executives as “obscene.”   It is not surprising they would do so, especially when you hear stories about major layoffs of laborers and lower worker peoples while the CEO’s get their unfair share of the loot.   I realize that if a CEO greatly improves the lot of the company he or she should be awarded.   But when they drive it into the ground, rewarding them for their failures does seem somewhat illogical, if not insane.

The failure of Freddie and Fannie brings out the controversy between free market values and the need for government assistance.   You can argue the case either way and make some decent points, although I always find it odd that the free market people are the first to ask for government aid when it is their business that is in trouble.   In this case, after years of greed, corruption, fraud and mismanagement, the real estate industry is just begging for a hand out.

So then we deal with the larger concern, that of accountability.   Who is accountable for their actions, anymore?   And where do ethics cease to be ethics, if no one pays any attention to their general principles?   In this case companies are melting down one after the other, financial institutions, real estate concerns, investment concerns, but no one seems to be around to take the heat.   And for the heads of Fannie Mae and Freddie Mac, if tradition allows, we will kiss them on the way out the door.

The golden parachute is perhaps a concept whose time has come and gone.  Especially in this economy.  Perhap it’s time to reconsider the heft rewards of the C level offers.  That appears to be what the public desires.  Small wonder.