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A new West Coast Model is emerging with ballot measures in the states of Washington, California and Oregon. The model is to make up for decades of faulty income distribution which favored tech communities in west coast states leaving behind people from minority communities and the working class outside tech hubs such as San Francisco, San Jose and Seattle. During this period budgets for education and healthcare, social services and essential infrastructure suffered as budgets were squeezed for local governments. Minimum wage also lagged behind and communities struggled to keep up. Washington votes for a ballot measure that raises the minimum wage to $13.25 statewide and mandate paid sick leave for workers. In California a ballot measure makes permanent an income tax surcharge on millionaires to use these funds for education. In Oregon measure 97 places a gross receipts tax on corporations with annual sales in Oregon over $25 million, raising $3 billion a year for schools, health care and other programs. The California and Washington measures are likely to pass, Oregon uncertain, say experts. And even in Oregon supporters have learned from the experience to put forward new proposals on the ballot. The Washington measure is supported by Nick Hanauer, and Zach Silk, president of Civic Ventures in Seattle, who say it is essential to put more money in workers wages to increase growth and to bring better lives outside the tech hub areas. Most of the tech booms of the last two decades have not touched the areas outside tech hub metropolitan areas. The conservative approach adopted in Louisiana and Kansas of reducing taxes first and then when holes in state budgets developed to cut education, health and other service expenditures has not worked, and it has led to the backlash in the form of the new West Coast Model, which is expected to be brought up in other states in the east and midwest. The tech hub areas have grown with the boom in tech but this has largely ignored the rural areas, communities just outside of the tech cities, and led to uneven and distorted growth shortchanging the working class and the middle class, and hurting investment in education and healthcare across each state. Bill Whalen, a research fellow at Stanford University's Hoover Institution conservative think tank ,says that its hard to deny that the balanced growth for all communities across the state has lagged far behind as the tech booms boosted growth in the economies of California, Oregon and Washington. An article in the German online site Zeit on Silicon Valley described this vividly showing how this can happen in communities sitting side by side in the San Jose area, with minority Hispanic communities and working class communties seeing very little of the benefits of growth. ...

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Aldi plans to open 200 stores in the US in 2025- it's low cost model is working as Americans change their buying habits to get the best value from grocery stores. The German discount grocery store chain carries low cost produce and other items straight from the truck to the shelves for super discounted prices without the individual shelf byshelf stocking of larger grocery chains such as Kroger's. Aldi's like the Trader Joe chain stores are smaller and customers say it is hard to build up a large grocery bill when one reaches the cashier counter.

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The most eco-friendly Athletes Village of any Olympics is finished in time in the poorer suburb of Ile-St-Dennis in Paris, France. French president Macron opens the Athletes Village facility in this video in FR24. 40 lowrise tower blocks are shown and they will house 14,000 Olympic athletes. This is the first time a 'sober' model is being used by reducing the cost- using existing facilities, recycling, re-use, and putting climate change low carbon technologies. The organizer Nicholas Ferrand says the project was done by using the best know-how in France on how to best respond to the challenge of urbanization in 21st century. It uses low carbon concrete, wood structures and geothermal heating to cut carbon emissions in half compared to conventional methods. It is located by the river Seine in a regeneration effort in the economically deprived suburb of Seine-St-Dennis. The suburb also holds the national stadium and is the poorest and most crime ridden of France.

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In India 70% of smartphones sold in 2015 cost less than $150. Apple's market share in India is really small at about 2%. Apple iPhone sales were up 56% in the 1st quarter of 2016 over the same quarter in 2015, according to CEO Tim Cook. iPhones cost about $300-$1000 without a data plan in India reducing the size of the market. In May 2016 Apple applied for approval from the Indian government to sell refurbished or certified iPhones at lower cost. In India the best selling iPhone is the older 5S which costs about $300. It makes up 50% of iPhone sales in India for 1st quarter in 2016, according to Counterpoint. Apple has no model at the low end, as the SE model will cost even more at $500. The Indian market is growing at 26% in 2016 over prior year, making it the next largest market after China. Another approach Apple is taking is seeking approval to open its own retail stores and sell online. A waiver has been given by the government for using locally made parts. Apple's high prices and margins remain a significant barrier in opening up the Indian market, when lower priced Korean and Chinese smartphone models offer attractive options to price conscious Indian buyers....

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Kerala state of 35 million people who speak the language Malayalam, is one of the rare places today that has only 4 deaths from coronavirus, 524 cases confirmed and no community transmission. Here the Guardian looks at the reasons why. The Health minister KK Shailaja started very early on January 23, with a meeting of her rapid response team when the virus was still in China.  She setup a control room and instructed Kerala's 14 districts to do this on Jan. 24. When the first case arrived on Jan. 27 on a plane from Wuhan, Kerala had already adopted the WHO  protocol of test, trace, isolate and support. These passengers were checked for temperature, tested and quarantined. With some at a nearby hospital and others in home isolation. This is all the more amazing considering that Kerala is a state in southern India on the west coast that has a large number of people living and working overseas. Many are in the Gulf countries and the arrival of these refugees could have triggered a second outbreak. This was prevented by careful testing, and contact tracing of clusters.  When one group was evasive and concealed information from an airport surveillance team -arriving from Venice, Italy,  in late Feb- a case was detected back to them.  Contact tracers tracked down all of the hundreds whom they had been in contact with and quarantined them.  By 23 March all flights to 4 Kerala airports from overseas were stopped, including Cochin and Trivandrum. On March 25 India went into lockdown.  Some of the achievements in Kerala include quarantining 170,000 people early. with strict surveillance, which is now down to 21,000. Accomodating and feeding 150,000 migrant workers from other states, before returning them on charter trains to their home areas. A big reason for the success is the high literacy rate in the state. A big emphasis on education and healthcare is a part of the Kerala model. Shailaja is a secondary school teacher, and Health minister. From the days since independence of India in 1947 the state has a strong socialist tradition of taking care of the basics- health, education and public services. It also generates a part of its GDP with income from workers who are overseas.  Another reason for the success in dealing with coronavirus is experience. The state had a virus epidemic called Nipah in 2018 which has become the story for a movie called Virus in Malayalam. There is decentralized public health system in the state and people value their health care facilities, understand and trust the health care authorites. There are hospitals at every level of administration and 10 medical colleges. But trust and education, experience tackling the virus before, are key. Kerala is showing that poor countries can deal effectively with the virus, and create a better life by adopting the right model of creating good societies that value education, healthcare services, better economic structures and distribution of wealth, and  a degree of trust and responsibility found in a state that values public spiritedness. ...

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After test driving a Tesla Roadster in California in April 2010, Akio Toyoda, Toyota CEO, asked a senior executive Ihara to test-drive Tesla's Model S prototype car. This has led to a deal between the two companies, Tesla Motors and Toyota. Under this deal Tesla will use the NUMMI manufacturing facilities in Fremont, California, to build the Model S electric car. Model S is Tesla version of an electric car that would fit high end customer's budget for an electric car. The Model S price is starts at $50,000. Before this Tesla build 1000 Roadster electric cars which cost $100,000 each. Tesla was given $465 million by the US governmet to make a car that would be closer to what car buyers pay for premium cars. As part of this deal Toyota will buy $50 million of Tesla stock after its IPO. Toyota will cooperate with Tesla in the development of electric car parts and production systems and engineering. Separately Toyota plans to bring its own electric car to the market by 2012.

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Isaacson's new book on Musk says Musk's story is a cautionary tale. The compulsion to be drama magnet or mean are not prized traits, say others.  More sinister (the hell) is celebrating a culture that does not respect the need for worklife balance, of respect for nutrition and exercize for good health. Musk's methods which he calls "algorithm", a word known more for obscurity than meaning, are nothing new. For years as the US, Japan and China, now India have innovated there is a focus on simplifying things, and to do this questioning the existing way of doing things by breaking down the existing method into pieces and reorganizing the pieces of the puzzle leaving out unneeded pieces. What is the key to his success as it was for Jobs at Apple is creating a culture in which people would invest in and take risks for innovation at the high end of the price spectrum. Jobs used design and new stuff like the iPod and iPad, iPhone to do this. Musk does this through playing the role of a social media icon but a dangerous one that does not respect worklife balance and good health habits of nutrition, exercize and mindfulness. In processes this can give you a process that takes less time and money- how India's moon mission and rover Chandrayan 3 was done for $78 million showing these work practices of Musk are nothing new, and universally adopted by successful companies and nations. Newer ask your employees to do what you would not do, is also adopted by the best managers. By turning it into a mantra it obscures the fact that America today is a country of massive inequalities where two thirds of 4th graders cannot pass ACT reading test and half of retirees have zero savings, working people and families face a cost of living and health crisis and are badly neglected. How does it help to role model as an icon and popularize a culture that tolerates and accepts such conditions that would leave men deeply troubled, including America's leaders Washington, Lincoln and FDR if they were alive today. ...

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Labour's executive director of Policy from 2020 to 2022, says steps easy to understand and grasp, and which can be effectively implemented to deliver are needed for Labour party to win confidence of the British people. Claire Ainsley says Australia is doing this under Mr. Albanese. Mr. Scholz is doing this in Germany. "Keir Starmer's embrace of a mission driven approach to government provides opportunity to tackle the root causes of stagnating wages and volatile costs." "Whether this tentative revival can be turned into durable majorities will rest on whether we can deliver on the change that people are crying out for. If voters give the centre left a chance to be in government again, then the changes Labour instigates must make a difference in people's lives." She says centre left governments in the US, Germany, Australia offer a role model of how action can be taken to improve the lives of workers and families. Other centre left governments in Canada, Spain, are striving to do this also. To make simple to understand and quantify pledges to the people and deliver on them step by concrete step. A similar approach is taken in India and in states in India. Germany is an example. Ainsley says Germany made 4 simple pledges to back its bigger visions. Solid delivery on wages, pensions cost of living support, energy, and public services. ...

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One of Boeing's major customers airline Norwegian Air has subsidiaries in Denmark and Sweden that have gone bankrupt. Boeing has 92 undelivered orders for 737 Maxs and 2 787 Dreamliner aircraft waiting to be taken to Scandinavia. Additional 219 orders from leasing companies for aircraft were cancelled. In addition airlines such as Emirates are renegotiating price of 787 aircraft orders. Boring's commercial aircraft division is using up $4 billion a month just to keep production and suppliers running. It has used up half of a $14 billion credit line and has $15 billion in cash.The 737 Max crashes and failures cost an additional $18.7 billion in costs. 2019 ended with $27 billion in debt. Boeing has few options- the Trump administration is likely to support a government guarantee because Boeing is one of America's best companies and makes up 1% of U.S. GDP. Boeing assembly lines for models 747, 767, and 777 are going into full production on April 21. 787 line will open April 23 and run at full capacity by April 26. ...

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The European automobile market staged a recovery in 2014 with sales up 5.7% to 12.6 million, according to the European Automobile Manufacturers Association. The big gains were made by the lower cost brands such as Renault's Dacia made in Romania, and VW's Skoda made in the Czech Republic. Dacia sales increased in 2014 by 24% to 359,141 and Skoda's sales increased by 14% to 554,479. A Dacia Sandero without air conditioning, power locks or radio is priced at 7,990 euros in France compared to a better equiped Skoda Fabia at 12,640 euros and a VW Golf at 17,388, a big price difference for budget car buyers. The major brands continue to dominate with the Golf model continuing as the best selling model in Europe. GM and Ford with the Opel Corsa and Ford Fiesta also increased market share. VW's market share is 12.7%, Skoda's 4.4%.

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Talks about the 3 Scion models now in their third year, with 150,000 Scions sold. The xA delivers gas mileage of 32 city and 37 highway and has sales growing at 20% over the previous year 1st quarter( 2006 over 2005). Prices are in $17,000 range for tC sporty 160 hp Scion and $15,000 range for the xA. Two new marketing approaches to create the Scion experience. First, Pure Price, meaning price posted on the website is what you get no hidden stuff. Second, after market accesssories to customize the scion can be purchased inhouse from Toyota. Note the marketing is for a carefully planned rollout the west coast with details to create the buzz and excitement for a young crowd. See the link to Honda's Hit marketing plans which have been meticulously laid out, (Marty Bernstein, April 27, 2006).

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Ford gains market share in California, as Toyota and Honda's share of the market declines. Ford's market share is up 2 percentage points on the east and west coasts compared to 5 years ago, according to R.L. Polk data. The Ford Fusion sales for the first half of 2013 are up 18% over the prior year and exceed 300,000. Growth in the coastal U.S. markets comes from the 2013 Fusion, the C-Max, hybrids, and the redesigned Escape. Cars and crossovers are especially important in coastal markets. In the past Ford depended mostly on SUV sales in the midwestern markets with imports dominant in coastal markets. This is now changing with models like the Fusion and hyrids introduced by Ford. With it the image of Ford is also changing, as buyers in California are among the most affluent and culturally influential in setting trends.

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VW opens a new plant in Russia to manufacture 150,000 cars in 2009. Russian sales of foreign brands went up by 65% in 2008. The sales there are 2.4 million vehicles. With the number of cars at 180 per 1000 people, compared to 552 in Germany, most cars on the road already 10 years old, and with a population 1.7 times the size of Germany's, the potential for sales in Russia are significant. VW plans to produce the Octavia and Passat models , later adding Polo and Skoda Fabia models. VW hopes to increase sales in Russia from 3.2% to 10% by 2010, to catchup wth Toyota which also opened a new factory near St Petersburg. In 2008 Toyota sold more than twice the number of cars sold by VW. See VW's progress in other areas in the link to Skoda. The Octavia which it will bring to the Russian market is a success story from VW's Skoda operations in Czech Republic.This is a lower cost vehicle compared with VW's other models. VW is one of the fastest growing brands in Europe, ahead of Toyota, and it does very well in Poland and in Eastern Europe. It is the leading brand in China, ahead of GM. ...

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The world is too dependent on one semiconductor manufacturer, Taiwan Semiconductor Manufacturing Company, TSMC. Companies in Taiwan make 65% of the dollar value of the world's chips. How did this happen? It poses a threat to the US and to the world economy. Finally the US is making an effort to correct this. The European Union already has plans to produce 20% of the world's next generation chips in 2030. Intel plans $20 billion investment for 2 chip factories in the US. Only months earlier this report in WSJ says Intel president Bob Swan was giving more contracts to TSMC for next generation chips.  It shows how much the pandemic has changed views on supply chain security. Intel ousted Mr. Swan for missteps in relying too much on TSMC as this dangerous policy became evident during the pandemic. Such was the culture that existed before the pandemic on supply chains, on investment allocation, and related issues. As a single semiconductor factory can cost $20 billion, the Biden administration is getting involved with Congress to rebuild America's semiconductor industry and independent supply chain. TSMC is built on subsidies from Taiwan government. Morris Chang founded TSMC in 1987 after studying at MIT and working 30 years at Texas Instruments. At founding half of the investment for TSMC came from Taiwan government. The US to rebuild will require the government to support the chip industry in many ways. In this sense the US manufacturers who ceded manufacturing to TSMC were shortsighted- AMD, Intel, Qualcomm Apple. They without realizing it built the model on which TSMC would thrive and invest and grow. Take just one example- to meet Apple's first order TSMC spent $9 billion with 6000 people working round the clock to build a factory in 11 months. Yes Apple did not have to worry about chip manufacturing and quality by contracting it out. Yet over the years it was ceding the manufacture of the most important chips in its products to an exclusive supplier. It was also ceding away the technologies that went with it. Americans were told not to care by the best universities and professors, by economic departments and scientific educational institutions for two decades leading to the situating facing America today. Meanwhile Taiwan is supporting its chip industry even further as it relies on the chip industry to provide protection in its struggle to maintain its independence from China. A situation no American manufacturer understands or had planned to create, but is now left to the Biden administration and president Biden to solve. After twenty years of unchecked capital allocation and investments by the leaders of American manufacturing based on an inadequate and incomplete understanding of the role of manufacturing and manufacturing technologies in the life of America since its founding two hundred years ago, president Biden faces the task of restoring confidence in America. And this at the time of a pandemic that has taken hundreds of thousands of lives.      ...

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White drives a Chrysler 300 sedan diesel powered and made for European use, fast enough to go past speed limit but still gives an average of 28 miles in city and highway driving. The EPA rating for this car is 22 miles per gallon in its US V-6 model, so the Chrysler CRD 300 made for Europe has a 27% fuel efficiency advantage over its American counterpart. White borrowed it from a friend who was showing European diesel technology in the U.S. Cleaner diesel technology is spotlighted in this test drive. Also attention is drawn to fuel availability. This fall oil companies will be required to supply Americans at the gas pump with low sulfur diesel fuels on which the diesel cars with the clean diesel technology run, for cars like the Chrysler CRD 300. Automakers from Japan, Europe and the US are looking to transfer this technology developed for Europe to the US, with some improvements to meet American environmental standards, especially in lare sedans, SUV's and pickups. The statistics for US diesel use on the road are as follows: 1. About 3-4% of light vehicles in the US run on diesel. White quotes industry executives as comfortable with a JD Power estimate of diesel use by 2010-2012, or about 6-8 year horizon of 10% of all passenger vehicles. 2. John Moulton, president of the powertrain division of Robert Bosch Gmbh, forecast diesel use by 15% of the passenger vehicles in the U.S. by 2015. Use in Europe is about 50% by comparison. 3. Usage of diesel will be highest in the bigger cars and vehicles . This is where the 20-30% savings in fuel cost would be substantial enough to cover the $2000-$6000 additional cost for the diesel powered vehicles using the latest clean diesel technology. DaimlerChrysler is already moving forward with coming up with versions of the diesel models used in Europe for the American market. VW currently is the leader in the American market. About 20% of VW's sold in April 2006 use diesel. This is going up every year 12% in 2004, 14% in 2005. In 2008 VW will have all its mainstream models available in all 50 states in diesel versions. ...

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During the 8 years of the Clinton administration and the 8 years of the Bush administration China moved from employment of roughly one fourth of its workers by the private enterprises and the rest by state owned enterprises to three fourths now employed by private enterprises and one fourth by state owned enterprises. This completely reverses the situation. See graph by China's National Bureau of Statistics appended here. And during this period both administrations were open to low cost goods from China, encouraging China to accelerate its conversion to an export model, heavily dependent on US and European markets. Now with the US and European markets collapsing, China is increasingly worried about what happens to all the small factories catering to the American market.

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This is a WSJ special report on Nissan and the failure of Carlos Ghosn's management style at Nissan leading to deep discontent in management ranks and employees, and also in Japan. Ghosn failed to invest in Japan seeing it as an aging society, and preferred the U.S. for investment. This was an affront to many Japanese, not just Nissan employees.  A big problem was that Ghosn's salary was larger than that of all nine top Nissan executives combined. Even during the 2008 financial crisis and cost cutting Ghosn's salary was understated by using accounting methods not approved by its auditor Ernst & Young. Under new Japanese rules oversight on compensation was given to Mr. Imazu who had to uncover the different shell companies that were used to shield the compensation and benefits going to Ghosn from public view. Lack of transparency and frugality was a major issue as one Nissan executive put it- "where is the transparency, and where is the frugality." New laws introduced in Japan in 2015 required release of compensation for any company executive making more than $800,000. Under these rules Japanese prosecutors were able to investigate the situation at Nissan.  In the end when the CEO of Nissan, appointed by Mr. Ghosn announced the arrest and detention of Mr. Ghosn, the Japanese audience applauded, showing how deep the discontent was in Japan. On November 19, in a carefully managed operation that would make a detective type story Japanese prosecutors arrested Mr. Ghosn as his plane landed in Tokyo, and arrested his assistant Mr. Kelly on the same day after his plane landed and his car was taken off the road to a rest area. Ghosn story has also its management lessons as this type of hard driving management with time spent jet-setting more than in contact with people and employees of the company is becoming unpopular. It is bad for employees and presents a rather unhealthy lifestyle, lacking any kind of role model for the rest of the company and society where the company is located. In this case not just Yokohama, but all of Japan, which resented the way it was treated. Recent articles have highlighted the situation at other companies. The General Electric story about the failure at GE in the U.S. - also explored this week in the WSJ -tells a story of hard driving management style of some executives that is increasingly becoming unpopular. A more thoughtful management style, with mindfulness, not based on personality or ego, is more productive leading to better decisions after taking in all views and enabling participation of other top and middle managers. ...

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Health and Education are the best bets for investment to revive the economy. BW's Mandel says the health and education fiscal channel is still functioning, while other ways of stimulating the economy are in breakdown mode. Taxpayer money given to banks, businesses and households will be saved to pay down high levels of debt and because of uncertainty. But funds directed to schools and hospitals will be spent to buy new equipment, modernize and update, put up new buildings, and hire workers. Health care especially is keen on hiring new nurses, medical technicians, home aides, and so on. And over the past year health care and education workers have risen by 500,000. In these hard times the hardest hit areas like Michigan have seen health and education make up 23.7 % of jobs, while manufacturing has dropped to half that, only 12.5%. And in the past decade health and education has had a stabilizing influence already. Nationally these areas have hired steadily, adding 5.3 million jobs since 1999. Meanwhile the rest of the economy has seen booms and busts, and off shoring and outsourcing overseas, with only 400,000 new jobs created in 10 years. Education has suffered neglect for needed infrastructure including broadband and internet capabilities for classrooms, and health care suffers inefficiencies such as computerization of records, and cost inefficiencies. These areas can be modernized and improved, adding to benefits years from now. They are large sectors employing 30 million workers or 22% of the workforce, and now badly needed to stabilize the economy as these employees are well paid and could help keep consumption from falling badly. A Gallup poll taken in February, shows 56% of Americans showed that education investments were "one of the most important items " for stimulus spending, coming out on top, and beating tax cuts....

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Should Arthur Levinson and some of the team he has assembled at Genentech leave it will be a big loss for Roche, as it was his team that helped bring a series of new drugs to the market such as Avastin, Herceptin, and Rituxan to bring Genentech sales from $1 billion in 1999 to $9 billion in 2007. As drug companies buy biotechs in large numbers, with $70 billion in deals this year almost twice the toal for 2007, the question remains whether the drug companies have succeeded in retaining talent as consolidation yields cost savings but does not improve drug discovery. Drug companies are struggling with this, and a couple of models have emerged for keeping minds engaged in scientific discovery satisfied that they have the freedom to operate as they always have and work with the teams they have assembled, similiar to the work style and in the similiar culture as before. Almost like walking into the offices they use as if its like before. J&J has come up with a hub and spoke model to acquire companies and then leave them alone- preserving their management teams, unique cultures and brands. Centocor was bought in 1999 by J&J and 10 of the top executives stayed on and developed Remicade, a drug for inflammatory disease that has sales of $3.3 billion. Glaxo has developed a new structure under new CEO Andrew Witty, which breaks up the primary research labs into "discovery performance units" or DPUs, which also include new biotech startups. In April Glaxo acquired Sitris, a Cambridge, Massachusetts startup. The company had come up with a new science for tackling heart disease, diabetes and other diseases associated with aging. Harvard trained scientist and CEO, Christoph Westphal, went with Glaxo turning down other companies because the independence of the DPU appealed to him. Each DPU has a 3 year budget and this also appealed to Westphal. He could walk into the labs, says Westphal as if nothing had changed. Is Roche making a mistake in acquiring Genentech when it could have left it alone. Are the consolidation savings worth it if some of the discovery team at Genentech leaves and there is the feeling that the culture will change, and if Levinson feels that he was not consulted about Roche's move. These are questions that remain even when Roche's CEO, Severin, says he does not want to change things at Genentech because Roche's actions will speak louder than its words. ...

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VW's sales in the U.S. doubled between 2009 and 2012, and VW set aggressive goals for the U.S. market to reach 800,000 by 2018. The goal was a stretch goal because this was double the level of 438,000 vehicles in 2012. This was part of its Mach 18 plan to pass GM and Toyota in global sales by 2018. Now this goal appears less achievable, because of new models from Honda and Ford which surpass VW's Jetta and Passat in technology, features and fuel efficiency. The U.S. market sales have increased by 9.6% in 2013, VW's sales declined by 1.3% so far through August in 2013, at 282, 913 vehicles. Ramping up production at the new Chattanooga plant will have to be put off and 500 contract workers have been given leave from the assembly line. By contrast Toyota sales for the 8 month period 2013 increased by 7% and 8.6%. In August Toyota's were up 23%, Honda's 27%, and VW down 1.6%. VW executives have said the company needs sales of 400,000 to make the U.S. manufacturing operations profitable. VW made a strategic decision to cut costs and bring the Passat price more in line with competition from similiar cars from Japanese carmakers. But this was done not relying solely on productivity and other improvements, but used cost cutting using cheaper materials. VW even went one step further by taking away the European suspension which delivered a more precise ride, and installed a lower cost suspension on the Jetta and Passat. Customers have noticed with some buying older models with the European suspension. Honda and Toyota moved in the other direction in the last 2 years coming out with more advanced features on the Accord and Camry. Ford did this with the Fusion. The new Accord has a backup camera, iPod connection, power seats and alloy wheels as standard. As a result Passat sales were up only 3% through Aug 2013, and Accord sales increased by 17%, Ford Fusion sales up 13%. VW's response is to ramp up discounts. It is also coming up with a new engine, Jetta compact with a sportier ride will be introduced, and a redesigned Golf hatchback for 2014. The slowdown in sales at VW shows how competitive the car market has become with Korean, German, Japanese and American carmakers quick to make inroads in turn with weak points of the competition. Strategic missteps can be costly for any manufacturer and the customer can never be taken for granted....

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Modi's success in tackling problems of electricity development in Gujarat state and the model for India, as a new Modi administration is elected for India in 2014. Other areas that are the focus for development include high speed rail and transportation, other infrastructure development, creating new jobs in manufacturing. Modi made three trips to China in the last decade as a four term chief minister of Gujarat state (similiar to a governor of a U.S. state), and has adopted a China type focus on infrastructure development and manufacturing for the western state of Gujarat, which was part of the old Bombay state in British times. Mumbai, the new name for the old British settlement of Bombay on the west coast, is about 300 miles south of the major Gujarat city of Ahmedabad, at one time a major textile manufacturing center. Mumbai and commercial minded people from Gujarat occupy a role similiar to Shanghai in India's economic development. Under British times trading minded Gujaratis settled on the east and southern coast of Africa, in the Persian Gulf, with retail businesses. Of India's two largest companies the Reliance Group made its early start in textiles in Gujarat in the seventies, set up by a young emigrant who returned from the Persian Gulf. The Tata Group which owns Land Rover was set up by a Parsi immigrant community in Gujarat. Its founder Jamshedji Tata set up India's steel industry under the British at the turn of the century. The Parsis settled in Navsari, Gujarat, immigrating from Iran and other parts of the Persian Gulf centuries ago. When the media talks of Modi's origins as a tea seller's son, one has to take this in the context of the origins of people such as Reliance founder Ambani who was the son of a schoolteacher from a rural village in Gujarat. With about a 1000 mile coastline facing the Persian Gulf, Gujarat has been known to engage in the textile trade long before the arrival of the Portuguese and the British in the 1600's, and before the Muslim period from the 1300's. Many Gujaratis settled in Mumbai and are a key part of the commercial, financial center in the city. Just as Britain with its commercial centre of London evolved over centuries with commerce affecting attitudes towards democracy, free media and capitalism compared to more feudal France, Gujarat and Mumbai has evolved in a similiar manner compared to other states in the north of India. With all the media infomation and misinformation on Modi's mishandling of communal riots little has been said of the unique position of Gujarat and Gujaratis in the industrial development and modernization of India. Compared to other parts of India historically there is a greater degree of tolerance in Gujarat for other communities, similiar to Britain's compared to France and Spain, because of this commercial outward looking orientation for new ideas. ...

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The Chevy Volt GM's plug in electric car comes out in 2010. Toyota plans to bring its plug in electric car in late 2009. A company in China, BYD, has already come out with an electric car, the F3DM, priced at 150,000 yuan or $22,000. By contrast the Chevy Volt is expected to be priced at $40,000 when it comes out in 2010. Essentially this gives the market leadership to BYD, because it would have 2 years of experience with its cars on the road, and $40,000 is just not a commercially viable price if a competitor can sell it for half the price. So how does BYD do it? Wang Chuanfu is founder and chairman of BYD Co. a battery and car maker. BYD has built up low cost, high quality and highly motivated research and development capabilities. Wang put together about 10,000 technicians and engineers, many fresh out of colleges and technical schools in China. As it learns the efficiencies of manufacturing and design it is able to bring this to bear on the H3DM improvement, for introduction of other new electric car models. And this technical capacity comes at a much lower cost in China compared to western countries. Wang's focus on this area making it possible to price at $22,000. The CEO of Mid American an Iowa based energy producer with majority stake ownership of Warren Buffett, was attracted to BYD for this very reason, and bought a 10% stake in BYD for $230 million. Wang believes there is a more level playing field in electric cars because of the simplicity of their design and fewer parts, making for a faster move up the learning curve. Electric cars have just 2 motors (45 parts each) and 2 gearboxes (60 parts each), a total of 210 parts excluding nuts and bolts. BYD's gasoline car the F6 has 1400 powertrain parts, 840 parts for the V6 and for transmission 560 parts. Says Wang, this puts all of us on the same starting line. The F3DM is the first real electric car being able to go for 60 miles exclusively on electricity on a full charge. A car that can go 180 miles on one full charge called the BYD e6 is planned for 2009. BYD uses iron-phosphate technology which is safer because of stable chemicals and less chance of fire from overheating. This is a key criteria for this lithium ion battery technology for cars. The Chevy Volt battery being developed by A123 company at MIT uses a similiar technology. BYD started with lithium ion battery development years ago. Its founder Mr Wang was fascinated by batteries when he studied metallurgical physics and chemistry in the mid 1980's for his Masters degree. He found a research position at the General Research Institute of Nonferrous Metals in Beijing, then decided to form his own company BYD in 1995, to develop lithium ion batteries with about 20 engineers. Experience was gained selling batteries to Samsung, Nokia and Motorola. In 2002 the company went public on the Hong Kong stock exchange. Wang was attracted to the idea of electric cars at this early stage even though he did not know how to drive. In 1998, says Wang, he had his engineers start upscaling development from cellphone battery technology to electric car battery technology. At the same time to pursue his vision for the development of electric cars Wang made the decision to learn car development by making and selling gasoline cars. The first car was a small sedan called the F3 brought out in 2005. By the last quarter of 2008 the F3 was one of China's best selling automobiles. Demand for BYD's F3 and F10 models is growing even as car sales are dropping in China, helping BYD to gain in car sales relative to Cherry Automobile and Geely Holding, two of the largest competitors. ...

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Consideration is a term being used in Detroit auto company marketing efforts, if a customer gives little consideration to a company or brand or if its not on his list of brands or companies to consider, then snap you are not even in the running. The customer does not even visit your dealer showrooms, and no matter how well you make your cars its not going to make a difference. It has to take a lot of neglect of customers for this sort of situation to arise, but its exactly the situation Detroits auto companies face. They are trying marketing ploys such as this one by Ford's advertising agency, but its impact is uncertain. The efforts at GM also focus on marketing but again efforts to put Honda Accords and Toyota Camrys in Saturn dealerships next to the Saturn Aura, for side by side test drives have not had much impact on Aura sales. So a similiar effort for the Chevrolet Malibu in Chevy dealerships has been scrapped. There is even skepticism that a lifetime warranty on engines and transmissions by Chrysler on its vehicles will have much impact, so large is the customer resistance and ingrained perception of American car manufacturers. Over time perceptions may change but it will take a while to convince the American customer who feels he was once treated with disdain, and who will give a good hard look at things before he changes his mind. The figures bear this out. Years of neglect of car buying public and focus on SUV's and trucks is showing up in a 51.3 % share of the market for the American Three companies down from 60% 4 years ago. So half the market has pretty much been conceded to the likes of Honda and Toyota. Actually in the West and East coasts the numbers probably range to 60% and 70% depending on the local area in these 2 regions. So that means more established dealerships for cars, years of marketing effort focussed on cars, sales contacts and so that may take years to dislodge to any degree. The figures behind consideration by JD Powers show that 54% of car buyers are import loyalists, a slightly higher figure than the 51.3% showing that the trend is even more defection to imports in the 1-3 years ahead. And 22% consider both domestic and import cars. With this segment there is more selection in the imports beause only now are the American Three carmakers building up their car model lineups, especially Ford, so this will be ahard fought segment with no certainty that the Detroit Three carmakers will come out on top given the lead and established networks of the carmakers like Toyota and Honda. Only 25% are domestic or American carmaker loyal. A lot may depend on the way a customer is treated from reading letters to the editor in the media by buyers of US and import cars. A car buyer treated with no respect and sincere concern for his needs and preferneces is likely to remember the treatment for a long time. Not just products but attitudes and people in sincerity will have to change....

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The US needs good manufacturing jobs for the jobs and income that it brings into communities, and also because of the tax revenues from the companies making products in America that provide the basis for local governments to provide good public services in healthcare, education, and transportation. To say comparitive advantage that helped first Japanese and now Chinese manufacturers is real and how society gains is to deny some basic facts that are self evident from observation that contradict textbook ideas in economics. Comparitive Advantage is a textbook economics concept that says countries are proficient in what they make best and should specialize in that product. But it is a static concept that exists only in textbooks. If Japan in 1960, China in 1980 and India in 2000 were each presented with this idea they would have turned down the idea of making steel and remained makers of lower end products such as footwear and textiles. If Japan in 1980, China in 2000, and India in 2020 were each presented with this idea they would have turned down the idea of making semiconductors and remained makers of lower end products such as steel. A senior vice president of US Steel in the late 1960's even told this writer a graduate student at Northwestern in Chicago- as the US can make steel better than India or China let us keep making it for you. He and much of the business faculty at Northwestern also could not understand in 1970 why Airbus was being setup to compete with Boeing who by the concept of comparitive advantage should have had the whole market to itself for commercial aircraft . By this kind of thinking Airbus would not exist today because it did not have the lowest cost or the manufacturing technologies Boeing had through its vast manufacturing operation. America would be still the only one making aircraft in 2023 if textbook concepts ruled the day. By indirect methods such as hidden preferential arrangements, provision of inputs such as land, capital and labor, tax relief, the costs can be represented in a way that shows it is cheaper to manufacture overseas. The lack of a level playing field is what president Biden is correcting by doing what first Japan, then South Korea, then China and now India are doing since the 1960's. By 1974 in four years after its founding in 1970 Airbus came up with its first model the A-300 using advanced technologies. America will regain its leadership in the cost and manufacturing of many products through Biden policy and the efforts of American companies by 2030, and do this in a transformative way that will benefit the world as a whole.  It is an enormous error to say the US does not need good manufacturing jobs, that local governments do not need the tax revenues from manufacturing plants to build services for communities where manufacturing workers live, and the US does not need the manufacturing experience curve that leads to reduced costs. It is this loss of the manufacturing experience curve that is the most vital aspect for understanding the need for the US government to compete effectively with the governments of Asian countries to keep manufacturing healthy and strong at home. Economics experts ignorant of how important this science and engineering principle is fail to grasp this. Related to this is the idea of a virtuous cycle in manufacturing- whoever braves the hard years of moving up the learning and experience curve gets rewarded because once that country has mastered that skill it gets better an better as the technology advances- making it harder and harder to prevent a new monopoly in manufacturing by the country (Japan, China or Taiwan) that had the highest costs and the least advantage ten or 20 years earlier but just persevered through it all with the government's help to gain cost competitiveness. This part does not make it into the economics textbooks which are mostly theory and much of it outdated by the time they are written. Observation is the best teacher and guide as it is in science, to guide policy and action. Obsessive attachment to theory that ignores observation becomes the enemy of progress. Comparitive advantage is one concept that needs to be retired even from the textbooks. Overseas manufacturing then is a piece of the overall picture that fits into what is good for the US. Macroeconomic principles determine microeconomic outcomes as opposed to microeconomic principles with companies out on their own being forced to compete without a level playing field, or handing out technology for special status in a recipient country as some do putting the US at a macroeconomic disadvantage. This is also healthy for the recipient country overseas, as recrimination with loss of manufacturing jobs in the US inevitably leads to the kind of recrimination that does not serve either country well as in the case of China today, and worse still can lead to conflict, even war. After the egregious situation of loss of manufacturing communities across the US leading to destabilizing the social fabric, it is hard to see such thinking prevail about the US not needing manufacturing as a vital part of its social fabric and industrial strength. China, it can be said, would have developed, and developed well over the past two decades without overconcentration of US and EU manufacturing in China. Without aggravating the problems of climate change and contamination of air, land and water, and destabilizing the social fabric in the US hurting workers and communities across the US, if macroeconomic policy was made to manage this process in the US government without it being left entirely to individual companies to decide. Instead China faces today a difficult situation through events such as destabilizing the social fabric in the US (the Trump tariffs), advanced economies in G-7 resistance to sharing of technologies, the damage to its environment from microeconomic locally determined policy at individual companies, and the global effects of climate change from climate unsustainable levels of growth since 2000.  ...

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Honda's market share slipped from 11% in 2009 to 9% in 2011 in the U.S. after the tsunami and earthquake led to shortages of cars. Sales are expected to be 50% higher in May 2012, as inventory shortages are reduced, according to Edmunds.com. With increased competition, and new models such as the Crosstour Accord in 2009, CR-Z hybrid coupe, Insight hybrid in 2010 failing to catch on, Honda is increasingly falling back on its best selling Accord, Civic, and CRV sport utility vehicles for increasing sales. The Ridgeline pickup truck introduced in 2005 may be discontinued. The Honda Fit subcompact sales declined by 61% in April 2012 from the prior year. Fiat and Kia small vehicles have increased sales compared to the Fit. The Fit is manufactured in Japan and the strengthening yen makes it unprofitable. A cost competitive Fit will be made in Mexico starting in 2014. Honda's strong point is its higher customer retention rate of 60%, second to Hyundai's 64% repeater ratio, according to January 2012 survey of J.D. Power. Honda normally relies on the U.S. market for over half its operating income, and for the year ending March 31, 2012 most of the operating income, 223 billion of 231 billion yen, was from the U.S., which gives some idea of how much rests on the U.S. market. For now Honda is using incentives to recover market share at the expense of operating profit. During the last fiscal year Honda's operating profits declined to 2.9% of sales. Honda's goal is to move this up to 6% in the coming fical year, still short of the 9% in 2002, and between Nissan's estimated 4.5% and Toyota's 6.8% in the coming year. ...